Freedom of Choice – Legal Expenses Insurance
The Insurance Companies (Legal Expenses Insurance) Regulations 1990 provide (Regulation 6) that the insured is free to choose the lawyer he/she wants to act, even if the Insurer would prefer that a panel firm was instructed.
In Brown-Quinn, the legal Insurer could choose not to accept the solicitor chosen by the insured "only in exceptional circumstances".
It was also a term of the policy that a non-panel solicitor had to work for the rate laid down by the Insurer which was a fixed hourly rate that took no account of the importance or difficulty of the work or the experience of the solicitor.
Three insured Claimants wanted to use a particular firm of solicitors who charged more than the rate the Insurers were prepared to pay.
The Claimants went to the High Court asking for a declaration including that:
– the appointment of their own choice of solicitor was valid; and
– the Insurers could not refuse the Claimants' chosen solicitor on the basis that the rates were higher than the Insurers wanted to pay.
The High Court found in favour of the Claimants.
While this decision does not open the door to allow solicitors to charge Insurers exactly what they want, it does make it clear that insured litigants have more freedom to instruct a solicitor of their choice than they are sometimes led to believe.