Legal cover or legal protection are terms used for legal expenses insurance
Legal expenses insurance is designed to allow you to bring a compensation case without worrying about having to pay legal costs. I think of it as allowing the client to sleep at night not worrying about legal fees.
Legal costs are the fees of your own solicitor and the solicitors who represent the Defendant, plus the expenses the solicitors incur such as medical fees, police report, and barrister fees amongst others.
Many people have bought legal expenses insurance as an add-on to another policy. It is worth taking the time to understand how it works.
You may have legal expenses insurance, trade union support, or be a member of an association which includes legal expenses insurance. Personal injury solicitors call these policies “before the event” insurance, as you have arranged them before an accident or legal issue has arisen. The same protection can be arranged after an accident, the insurance policy being an after the event policy. In this situation it is usual for your solicitor to work on a no win no fee basis, properly called a conditional fee agreement. In each of these situations you are liable to pay your own solicitor’s legal costs, and in the case of a no win no fee agreement only liable in the event of success. The other side will usually pay those costs if your case succeeds, either by agreement or by order of a Court. For those costs to be payable by the other side you must be liable to pay your own solicitor charges, as the other side are covering your bill rather than paying your solicitor direct. Most solicitors will be satisfied to accept the legal costs they can negotiate in settlement, so you should not have to pay your own solicitors anything if you win. Do watch out for this as not all solicitors follow this practice.
If you lose your case you are liable to pay your own legal costs plus those of the other side. It is now that you need some form of insurance to rely on. Losing a case at a full trial can produce legal costs greater than the compensation sum you were seeking.
You can succeed with your case, but sometimes be ordered to pay some or all of the legal costs of the other side. This can happen where you achieve a result in your favour, but the result is less than you were offered at an earlier stage in the case. You might have been offered £5,000 by the other side but only receive £4,000 from a Judge. The other side will pay your legal costs up to the date of the £5,000 offer, but you will have to pay the legal costs of both sides beyond that offer. It is here that support from a legal expenses insurance policy or a trade union is very helpful.
Please be clear that legal expenses insurance is an unusual insurance policy as the insurer has the right to review your case as it runs along. The insurer will support your case so long as the case has reasonable prospects of success, but if those prospects change the insurer can withdraw. You then have to decide how strongly you feel about the case, because you may end up paying the bill.
A clear explanation of all these issues must be given at the outset by an experienced personal injury solicitor. A client should not be left to worry.