Legal Aid, Sentencing and Punishment of Offenders Bill

Memorandum submitted by Simon Green (LA 06)

1. I write to provide submissions on Sections 41 to 44 in Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Bill, the provisions that deal with payments for legal services in civil cases.

2. I am a Fellow of the Association of Costs Lawyers, a professional body for lawyers involved with three primary tasks: the drafting of legal bills, the defence of such bills and the dispute of such bills. Membership of the Association is attained through academic qualification and experience, and I have worked in legal costs for well over a decade.

3. I head the costs department in a firm of solicitors, and my primary role is the assessment of solicitors' costs to determine their reasonableness, either through negotiation with opposing parties, or through a Court process for assessment of a bill known as Detailed Assessment and detailed in Part 47 of the Civil Procedure Rules 1998. I am also a tutor for the Association of Costs Lawyers. I may fairly be described as a salty veteran on civil costs, and I hope to offer some valuable and unbiased opinion in these submissions.

4. Prior to 1999, Legal Aid was regularly used to fund civil litigation. Plainly, its primary purpose was to give low income clients access to justice. In 1999 the Access to Justice Act extended the categories of claim which were ineligible for Legal Aid, including personal injury claims save for those relating to clinical negligence, claims for negligent property damage, boundary disputes, trust law, making of wills, company or partnership law matters, defamation claims and matters arising from the carrying on of a business (Part A, Schedule 2 of the Access to Justice Act 1999). Concurrently, Sections 27 and 28 of the Access to Justice Act permitted matters to be funded under a Conditional Fee Agreement, and permitted a "success fee" to be awarded as part of legal costs payable by an opponent, subject to the rules of the Court. Last, Sections 29 and 30 of the Access to Justice Act permitted a client to take out a policy of insurance or to use membership organisation (Union) insurance to cover non-solicitor costs and opponent costs in the event a claim was not won. The sections of the Act also permitted the recovery of that insurance premium/Union premium from opponents in addition to costs and success fee.

5. Section 58 of the Courts and Legal Services Act 1990 defines a Conditional Fee Agreement as, "an agreement with a person providing advocacy or litigation services which provides for his fees and expenses, or any part of them, to be payable only in specified circumstances". Following implementation of the Access to Justice Act, when a solicitor enters into a Conditional Fee Agreement and takes out a policy of insurance in order to offer a "no win, no fee" service, a solicitor does not get paid if a claim is not won, and the insurance premium (which is normally self-insured) gets written off. The client walks away without having to fund a penny of their litigation.

6. The Act proved to be a windfall for membership organisations such as Trades Unions, who previously funded their member's claims without prospect of recovery of a pseudo insurance premium (a sum no more than the value of commercially available "after the event" legal expenses insurance).

7. If the claim is won, a client is liable to pay their solicitor's normal basic costs, a success fee calculated as an extra percentage of costs and dependent upon the solicitor's own assessment of difficulties in a claim, and the cost of any insurance premium taken out/Union premium. (They may also be liable for other costs, such as expert's fees and barrister's fees, though there is not need to consider this point here). If an Order for costs is made against an opponent, a client is normally entitled to be indemnified for the cost of "reasonable and proportionate" legal services, a "reasonable" success fee and the "reasonable" cost of insurance (Part 44.3(2)(a) of the Civil Procedure Rules 1998).

8. The fundamental problem with this current system is there is not sufficient control over the cost of "reasonable and proportionate" legal services, nor the calculation of a "reasonable" success fee, nor the commercial cost of insurance. Generally, a client has no liability for any costs if the claim is lost, and they receive a refund of costs from the opponent if the claim is won, walking away with 100% of their compensation. The solicitor is free to enter into a Conditional Fee Agreement with success fee up to 100% of costs incurred, and is free to "clock up" as many hours on a claim as he is able, knowing that their client will not dispute their bill, and the sole tool at the Defendant's disposal to dispute costs incurred is Part 44.5(3) of the Civil Procedure Rules, which provides:

The court must also have regard to –

  (a) the conduct of all the parties, including in particular –

  (i) conduct before, as well as during, the proceedings; and

  (ii) the efforts made, if any, before and during the proceedings in order to try to resolve the dispute;

  (b) the amount or value of any money or property involved;

  (c) the importance of the matter to all the parties;

  (d) the particular complexity of the matter or the difficulty or novelty of the questions raised;

  (e) the skill, effort, specialised knowledge and responsibility involved;

  (f) the time spent on the case; and

  (g) the place where and the circumstances in which work or any part of it was done.

9. Even if costs significantly exceed client damages, they may be justified on the basis of CPR 44.5(3) as costs "reasonably" incurred. I will come back to this point at paragraph 28, below, when I suggest alternative solutions to controlling costs.

10. There are three primary methods of funding costs in civil litigation cases: paying privately, using pre-existing legal expenses insurance to cover legal costs, and using a "no-win, no-fee" service.

11. It is fair to say that government departments are often paying parties in civil litigation cases, substantially as a result of claims against the NHS Litigation Authority or claims against local authorities following slips and trips.

12. From a paying party's point of view, there is an inherent unfairness in the "no-win, no-fee" system. If a claim is lost, they must pay solicitors' base costs, and solicitors' success fee and the cost of an "after the event" insurance policy. If the claim was privately funded, or funded under the terms of a pre-existing legal expenses policy, the paying party would not be liable for a success fee nor "after the event" insurance policy. A "no win, no fee" funded case is, then, substantially more expensive to pay than a case funded by another method. In a calculation of every routine case I have dealt with for the last 4 months, I conclude that such a case is, on average, 33% more expensive than a case paid for privately or funded by pre-existing legal expenses insurance.

13. In 1999, "Access to Justice" meant that the extra burden of a success fee and insurance premium on the Defendant was a necessary evil. Plainly solicitors cannot be compelled to work for free. If a client cannot afford to pay privately and they do not have any legal expenses cover, then in the absence of legal aid, recovery of a success fee and insurance premium from opponents in addition to base costs was the only viable solution to protect vulnerable clients who, in the absence of financial means, would be denied access to justice.

14. The proposals in Sections 41 to 44 in Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Bill seek to fundamentally change this proposition.

15. In Section 41 of the Legal Aid, Sentencing and Punishment of Offenders Bill, Section 4 seeks to provide that a, "costs order made in proceedings may not [emphasis added] include provision requiring the payment by one part of all or part of a success fee payable by another party under a Conditional Fee Agreement". Section 43 of the Act provides that a, "costs order made in favour of a party to proceedings who has taken out a costs insurance policy may not include provision requiring the payment of an amount in respect of all or part of the premium of that policy [save in clinical negligence matters, when an insurance policy is permitted to cover the cost of medical services].

16. It is clear that these proposed changes to primary legislation are advanced in line with proposals made by Lord Justice Jackson in his Review of Civil Litigation Costs. The reason why these proposals were made are clearly set out in paragraph 2.3 of his report:

‘Access to Justice entails that those with meritorious claims (whether or not ultimately successful) are able to bring those claims before the courts for judicial resolution or post-issue settlement, as the case may be. It also entails that those with meritorious defences (whether or not ultimately successful) are able to put those defences before the courts for judicial resolution or alternatively, settlement based upon the merits of the case.’

17. Lord Justice Jackson fears that Defendants feel forced into settling unmeritorious claims in order to save costs, particularly when faced with a potential liability for "success fees" and "insurance premiums" in Conditional Fee Agreement funded cases. As noted above, I calculate these additional sums total an average 33% of a solicitors' bill. He also fears that there is an unjustified advantage in Claimants being able to pursue their claim risk free: it can give rise to satellite litigation and can lead to unjust results.

18. I agree with these sentiments unreservedly.

19. Unfortunately, I do not agree that the proposals in Sections 41 to 44 in Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Bill will properly redress the position while protecting the needs of vulnerable clients. Since the protection of vulnerable clients is paramount, the proposals fail. Sections 41 to 44 must be struck from the bill.

20. I offer a worked example in support of this assertion.

21. While there are often ancillary issues involved, there are two key elements involved in any civil litigation case: liability and quantum. First, it must be decided whether the opponent has breached his duty to the client and is therefore liable for any losses. Second, a value must be placed on those losses.

22. A typical low-value claim concerns a man who relied upon a surveyor's report when making a decision to purchase his first home for its full market value. That surveyor's report negligently failed to identify obvious structural defects in the property. The property requires £10,000 of structural repairs, and the house was worth £10,000 less than the price paid as a result. In order to determine liability, the client needed to obtain expert evidence on the matters which a reasonable competent surveyor would have picked up. Next, he needed expert evidence on the value of those losses. Such experts' reports themselves cost £1,500 in this case. The client had no pre-existing legal expenses insurance. The client could not afford to fund expert evidence himself. He needed insurance. The client could not afford legal costs. He entered into a Conditional Fee Agreement.

23. The surveyor admitted negligence and the claim settled for £10,000. The £10,000 was used to pay for structural repairs, and the client's legal costs were paid by the opponent in addition. The client was in the position he should have been in had there been no negligence. Justice was done.

24. Under the proposals in the Legal Aid, Sentencing and Punishment of Offenders Bill, a client would have to pay for a policy of Legal Expenses insurance himself to cover the experts' costs. Even assuming one way costs shifting is implemented in accordance with Lord Justice Jackson's proposals and insurance is not needed for adverse costs, the cost of such insurance is never going to be £0. For that reason, a client of limited means with inability to secure credit may be unable to bring his claim at all. There would be no access to justice.

25. Under the proposals, if the client has sufficient means to continue, and the claim is won, that client will liable to pay the cost of insurance (say £300 in this case to cover £1,500 of expert's report and having regard to prospects of success). He will also be liable to pay his solicitors' success fee our of his damages. In this case, his solicitor's base costs were £3,000, and the success fee was 25%, being £750. Under the new proposals then, the vulnerable client would pay £1,050 our of his £10,000 damages. His remaining damages will be insufficient to pay for repairs to the property. He will continue to live in s structurally defective house which cannot be re-mortgaged and which he cannot sell. Justice will not be done. Justice cannot be done unless the client is left in the same position he would have been in had the negligence not occurred: this is the whole basis of the law of negligence.

26. If, on the other hand, the client had sufficient means to pay for his claim, or if he had the benefit of pre-existing legal expenses insurance, he would have the £10,000 he needed to pay for repairs and his full legal base costs paid in addition.

27. Plainly we cannot have a system which may prevent a client of limited means from bringing a good claim, or which prevents a client of limited means from obtaining proper redress.

28. I now return to the primary objective of Sections 41 to 44 of the Legal Aid, Sentencing and Punishment of Offenders Bill: the control of legal costs.

29. I carried out an analysis of non-litigated, fast track, personal injury claims I worked on in the last 4 months. The average damages settlement achieved was 10% less than solicitors' costs EXCLUDING success fee. Put another way, solicitors' base costs were, on average, 10% higher than damages recovered. Clearly such costs are "disproportionate" in its ordinary literal meaning, but such costs are "reasonable" and permitted by the Civil Procedure Rules 1998.

30. Clearly solicitors' bills must include a significant element of profit, since they are able to pay for, amongst other things, purchase of more claims from claims management companies who widely advertise "no win no fee" services and are clearly the prime motivator behind clients seeking a "no win no fee" service in respect of unmeritorious claims.

31. If solicitors cannot recover a success fee from their opponent, they will seek to maximise base costs in other ways: by increasing their hourly charging rate, by obtaining extra evidence, by using more experts and by uncovering every stone. The more costs solicitors incur, the more they can also potentially claim from their own client by way of success fee: of course, vulnerable clients are unlikely to oppose their solicitors' success fee in the same manner as professional opponents. In reality, there is a significant danger that the proposals in Sections 41 to 44 of the Legal Aid, Sentencing and Punishment of Offenders Bill will do no more than penalise vulnerable clients.

32. There are better ways to control solicitors' costs and prevent unmeritorious claims than to prevent vulnerable clients from recovering a success fee from their opponent.

33. First, pre-existing legal expenses insurance could be made more widely available and legislation could be enacted to ensure it is appropriate to use. At this time, many insurers refuse to indemnify clients in respect of costs incurred pre-proceedings despite the fact that evidence needs to be gathered pre-proceedings. I attach to this submission reasons why AA, Churchill, Co-Operative Insurance Services, Direct Line, RBS, Prudential, Norwich Union, Acromas, Sage, Allianz, Brit, DAS and MSL all offer policies of insurance which are not suitable for clients, such that they are better served by solicitors acting under Conditional Fee Agreements. If legislation forced the insurers to offer better terms, and forced insurers to indemnify their client's entire reasonable claims, the policies would be used in favour of more expensive Conditional Fee Agreements.

34. Second, no thorough analysis of solicitors' charging rates appears to have been carried out since 1999. Even in Band 3 deprived areas, the SCCO permit solicitors with 8 years' experience to claim £20.10 plus VAT for dispatching a routine letter, and an office trainee with no legal experience to charge a client £111 per hour plus VAT for working on their file.

35. Third, steps need to be taken to prevent people bringing of certain types of unmeritorious claim, as proposed by Lord Young in his report titled, "Common Sense, Common Safety". It would appear fairly simple to introduce legislation to protect good Samaritans, or to protect against claims for tripping on defects in pavements which are less than 1 inch. Legislation could also be introduced to ban referral fees and prevent "no win no fee" advertising, so that only meritorious clients will seek legal help.

36. Last but perhaps most importantly, the procedural steps contained within the Civil Procedure Rules themselves need significantly amending to reduce unnecessary costs. Under the current system in normal civil claims, if an opponent fails to comply with the pre-action protocol in even a routine matter, a solicitor is entitled to obtain liability evidence, to make an application to the Court for disclosure and to seek Counsel's opinion on liability, all of which can likely be justified as "reasonable" costs at conclusion, and all of which will be completely unnecessary if the opponent then admits liability out of time.

37. Low value road traffic accident cases are now governed by a separate procedure, detailed in Part 45 of the Civil Procedure Rules, which prescribes specific steps to be taken in cases, with specific fixed costs payable in respect of those steps. It is an extremely simplified procedure that stands on its own, and has significantly reduced costs in this area.

38. Clearly it would be impossible to formulate a fair system of fixed costs in all civil litigation matters in exactly the same way as Part 45 operates. Indeed any attempt to do so would prevent access to justice in cases which may demand a little more work than others, but may have a low value. Such cases such as occupational deafness claims, RSI claims or building disputes instantly spring to mind as low value claims which necessitate considerable work and involve vulnerable clients.

39. Nevertheless, amendment to the Civil Procedure Rules to significantly simplify the steps to be taken in a claim, to place more stringent time limits on matters, and to introduce specific prescribed steps which must be taken in default, will very significantly reduce solicitors' costs. This has worked with low value RTA claims and there is no reason it cannot work on a larger scale.

Summary

Access to Justice for clients of limited means must always be a priority. The current system protects vulnerable clients, but it is not perfect. It encourages unmeritorious claims and it fails to control legal costs. Sections 41 to 44 of the Legal Aid, Sentencing and Punishment of Offenders Bill seek to reduce legal costs payable by opponents, but this is done at the expense of access to justice for vulnerable clients. If vulnerable clients cannot receive 100% of their compensation, they may not achieve a just remedy. Further, the proposals may fail to reduce solicitors' costs at all. Solicitors' costs can be much more rigorously controlled by alteration to the Civil Procedure Rules and review of Solicitors' charging rates for different types of work. Unmeritorious claims can be better controlled by "common sense" primary legislation such as that proposed by Lord Young, and also by legislation to control referral fees and claims management companies. Steps need to be taken to enable clients to benefit from pre-existing legal expenses insurance policies such that Conditional Fee Agreements will be far less prevalent. The proposals in Sections 41 to 44 of the Legal Aid, Sentencing and Punishment of Offenders Bill should be struck out.

Reasons why BTE insurance is inappropriate with the following companies:

AA

· The terms of appointment permit AA Home Insurance Legal Services to pay you an amount equal to the value of the claim, and permit AA Home Insurance Legal Services to take over the claim in your name and settle any claim in your name. This potentially compromises your ability to bring a successful claim against your opponent.

· The terms of appointment impose onerous reporting requirements, including a requirement to provide a monthly update on the progress of the claim. The cost of this cannot be recovered from your opponent on an inter partes basis.

· The terms of appointment require a detailed report and an estimate of costs to be provided at various stages of the claim, the cost of which cannot be recovered from your opponent on an inter partes basis.

· The terms of appointment require you to seek authorisation before incurring the cost of any disbursement over £250, which authorisation may not be granted. This potentially compromises our ability to act in your best interests.

· Authorisation must be sought before incurring Counsel's fees, which authorisation may not be granted. This potentially compromises our ability to act in your best interests.

Churchill

· Your legal expenses insurer reserves the right to apply a reserve on costs which is the maximum amount of indemnity that they will provide. Reserve increases must be expressly agreed in advance of incurring further costs, and the legal expenses insurer reserves the right to refuse to pay any costs over and above that reserve irrespective of any costs estimates provided. Such a restriction potentially compromises our ability to act in your best interests.

· Your legal expenses insurers will not indemnify you in respect of disbursements over £500 without prior express authority, which authority is not guaranteed, and this potentially compromises our ability to act in your best interests.

· The terms of appointment impose onerous reporting requirements, the cost of which cannot be recovered from the legal expenses insurers if the matter is lost, and the cost of which cannot be recovered from your opponent on an inter partes basis if the claim is won.

Co-Operative Insurance Services

· Your legal expense insurer has refused to allow us to act on your behalf in this matter until the issue of proceedings, and you wish to retain us as your solicitors.

· Your legal expense insurer has confirmed that if you use the benefit of that legal expense insurance prior to the issue of proceedings, you will be referred to one of their panel solicitors outside the area who you have no guarantee of ever meeting to discuss your claim.

· The terms of appointment impose restrictions upon the choice/use of experts who we will be allowed to use in the conduct of your claim, which potentially compromises our ability to act and advise you in accordance with your best interests in dealing with your claim.

· The terms of appointment require the insurers' direct access to solicitors, and they impose onerous reporting requirements, the cost of which will not be payable by your opponent, and will have to be met by you.

· The terms of appointment impose restrictions upon the use of Counsel to provide opinion or advice, and require authority to be sought before incurring specified disbursements in excess of £250, which potentially compromises our ability to act and advise you in accordance with your best interests in dealing with your claim.

· The terms of appointment do not allow for recovery of costs incurred in research or consideration of letters received despite the cost of these items, in certain circumstances, being recoverable from your opponent. The cost of this work, if incurred, will therefore fall to be payable by you in any event.

· The terms of appointment impose a maximum charging rate of £120 per hour plus VAT, which is lower than the guideline hourly rates for work done by the conducting fee earner. The difference between indemnity provided by the insurers, and the retainer rate for work done, may therefore fall to be paid by you.

Direct Line

· Your legal expense insurer has refused to allow us to act on your behalf in this matter until the issue of proceedings, and you wish to retain us as your solicitors.

· Your legal expense insurer has confirmed that if you use the benefit of that legal expense insurance prior to the issue of proceedings, you will be referred to one of their panel solicitors outside the area who you have no guarantee of ever meeting to discuss your claim.

· The policy of legal expenses insurance only provides indemnity in respect of costs incurred on the standard basis, yet the terms of appointment impose onerous reporting requirements, the cost of which cannot be recovered on the standard basis. In the circumstances, the cost of complying with onerous reporting requirements will fall to be payable by you.

· Your legal expenses insurer will not fund any disbursements which you may need to incur in excess of £500 without their prior express authority, which potentially compromises our ability to act and advise you in accordance with your best interests in dealing with your claim.

· Your legal expenses insurers will not permit the issue of Court proceedings without their prior authority, which potentially compromises our ability to act and advise you in accordance with your best interests in dealing with your claim.

RBS/NatWest

· Your legal expense insurer will not indemnify you in respect of solicitor-own client costs.

· Your legal expenses insurer will not indemnify you in respect of disbursements in excess of £500 without prior express authority, which may or may not be forthcoming. This potentially compromises our ability to act and advise you in accordance with your best interests in dealing with your claim.

· The legal expenses insurers impose onerous reporting requirements. Costs we must incur in complying with onerous reporting requirements set out by your legal expenses insurers will not be paid by the insurers.

· The legal expenses insurers will not be responsible for the cost of preparing a bill at conclusion of the claim.

Prudential

· Your legal expenses insurer reserves the right to apply a reserve on costs which is the maximum amount of indemnity that they will provide. Reserve increases must be expressly agreed in advance of incurring further costs, and the legal expenses insurer reserves the right to refuse to pay any costs over and above that reserve irrespective of any costs estimates provided. Such a restriction potentially compromises our ability to act in your best interests.

· Your legal expenses insurers will not indemnify you in respect of disbursements over £500 without prior express authority, which authority is not guaranteed, and this potentially compromises our ability to act in your best interests.

· The terms of appointment impose onerous reporting requirements, the cost of which cannot be recovered from the legal expenses insurers if the matter is lost, and the cost of which cannot be recovered from your opponent on an inter partes basis if the claim is won.

ULR/Norwich Union

· Your legal expense insurer has refused to allow us to act on your behalf in this matter until the issue of proceedings, and you wish to retain us as your solicitors.

· Your legal expense insurer has confirmed that if you use the benefit of that legal expense insurance prior to the issue of proceedings, you will be referred to one of their panel solicitors outside the area who you have no guarantee of ever meeting to discuss your claim.

· Your legal expenses insurer will not fund any disbursements which you may need to incur prior to the issue of Court proceedings nor the cost of issuing Court proceedings, and you will have to bear the cost of these disbursements yourself if your claim does not ultimately succeed.

· The terms of appointment provide that ULR reserve the right, "to pay only such proportion of the profit costs or other costs as we consider to be reasonable in each particular case", and therefore, if ULR themselves consider an item to be unreasonable, you will have the bear its cost if the claim does not ultimately succeed.

· The terms of appointment by ULR limit recoverable costs to £125 per hour plus VAT, which is a lower hourly rate than the guideline rate prescribed by the SCCO for work done on the matter, and you will have to bear the cost of the difference if the claim does not ultimately succeed.

· The terms of appointment by ULR limit travelling and waiting to 2/3 the hourly rate, and you will have to bear the cost of the difference if the claim does not ultimately succeed.

· The terms of appointment by ULR place onerous requirements on conducting solicitors to, "produce to us any documents, information, or papers in your possession" on request. The cost of complying with these requests will have to be met by you if the claim does not ultimately succeed.

Acromas/Saga

· The terms of appointment impose onerous reporting requirements. Inter alia, at issue stage, allocation stage, listing stage and pre-trial the legal expenses insurers require a "detailed report" to be produced, the cost of which cannot be recovered from your opponent nor the legal expenses insurers.

· The terms of appointment impose restrictions upon the use of Counsel, such that prior to instructing Counsel, "you must contact us [the legal expenses insurer] with detailed reasons for your request and obtain our [the legal expenses insurer's] prior authority". Such conditions potentially compromise our ability to act and advise you in accordance with your best interests in dealing with your claim. The costs of complying with these conditions cannot be recovered from your opponent nor the legal expenses insurers.

· The categories of work which the legal expenses insurers will not indemnify include, inter alia, the cost of preparing long letters, photocopying, research and preparing costs breakdowns, the cost of which may have been reasonably incurred in the course of the claim.

Allianz

· Your legal expense insurer has refused to allow us to act on your behalf in this matter until the issue of proceedings, and you wish to retain us as your solicitors.

· Your legal expense insurer has confirmed that if you use the benefit of that legal expense insurance prior to the issue of proceedings, you will be referred to one of their panel solicitors outside the area who you have no guarantee of ever meeting to discuss your claim.

· Your legal expenses insurer will not fund any disbursements which you may need to incur prior to the issue of Court proceedings nor the cost of issuing Court proceedings, and you will have to bear the cost of these disbursements yourself if your claim does not ultimately succeed.

· The terms of appointment impose restrictions upon disbursements, for example Counsel's fees, which cannot be incurred without prior authority from Allianz. The cost of seeking such authority cannot be recovered from your opponent.

· Allianz will only indemnify "reasonable costs", which are costs which were incurred in progressing the claim. Costs reporting to Allianz/seeking authority from Allianz must therefore be met by you.

· The Allianz policy requires you to pay the first £250 of every claim where they agree to appoint a legal representative of your choosing, the cost of which must be met by you.

Brit

· Your legal expense insurer has refused to allow us to act on your behalf in this matter until the issue of proceedings, and you wish to retain us as your solicitors.

· Your legal expense insurer has confirmed that if you use the benefit of that legal expense insurance prior to the issue of proceedings, you will be referred to one of their panel solicitors outside the area who you have no guarantee of ever meeting to discuss your claim.

· Your legal expenses insurer will not fund any disbursements which you may need to incur prior to the issue of Court proceedings nor the cost of issuing Court proceedings, and you will have to bear the cost of these disbursements yourself if your claim does not ultimately succeed.

· The policy of legal expenses insurance requires us to enter into a Conditional Fee Agreement to govern the financial arrangements between us and yourself and there is no benefit in terms of my liability for my own solicitors' costs.

· The policy allows the insurers to pay an amount equal to their reasonable estimate of the claim instead of providing cover for costs, and is therefore unsuitable in allowing you unfettered choice to proceed against your opponent.

· The policy places onerous reporting burdens on the insured, including the requirement to keep the insurers fully updated on the progress of the claim, the cost of which will not be recoverable in proceedings.

DAS

· Your legal expense insurer has refused to allow us to act on your behalf in this matter until the issue of proceedings, and you wish to retain us as your solicitors.

· Your legal expense insurer has confirmed that if you use the benefit of that legal expense insurance prior to the issue of proceedings, you will be referred to one of their panel solicitors outside the area who you have no guarantee of ever meeting to discuss your claim.

· The policy of legal expenses insurance requires us to enter into a Conditional Fee Agreement to govern the financial arrangements between us and yourself and there is no benefit in terms of my liability for my own solicitors' costs.

· Your legal expenses insurer will not fund any disbursements which you may need to incur prior to the issue of Court proceedings nor the cost of issuing Court proceedings, and you will have to bear the cost of these disbursements yourself if your claim does not ultimately succeed.

· The terms of appointment impose restrictions upon the choice/use of counsel and experts who we will be allowed to use in the conduct of your claim, which potentially compromises our ability to act and advise you in accordance with your best interests in dealing with your claim.

MSL

· Your legal expense insurer has refused to allow us to act on your behalf in this matter until the issue of proceedings, and you wish to retain us as your solicitors.

· Your legal expense insurer has confirmed that if you use the benefit of that legal expense insurance prior to the issue of proceedings, you will be referred to one of their panel solicitors outside the area who you have no guarantee of ever meeting to discuss your claim.

· Your legal expenses insurer will not fund any disbursements which you may need to incur prior to the issue of Court proceedings nor the cost of issuing Court proceedings, and you will have to bear the cost of these disbursements yourself if your claim does not ultimately succeed.

· The MSL policy only provides £25,000 of legal expenses cover, which may not be enough to cover potential liability in the event the matter proceeds to a contested trial.

· The MSL policy provides that the insured person is responsible for the first £75 + VAT of every claim, such that the insured person will be out of pocket if the claim is not won.

· The MSL policy reserves the right to demand that the insured person, at their own expense, obtain an opinion from Counsel on the merits of legal proceedings, the cost of which may not be recoverable from any other party.

· The MSL policy places onerous reporting burdens on the insured, such as requirements to report on any offer to settle and requirements to deliver documents to MSL at their own expense, the cost of which will not be recoverable in proceedings.

July 2011

Prepared 14th July 2011