Legal Expenses Insurance – The Key To Funding An Employment Claim?
The Law Of… Getting The Most Out Of Your Insurance Policies
David Hession, Solicitor in Employment Law, based in Manchester, answers key questions employees have about legal expenses insurance (LEI) and how it can be used to fund employment law claims.
What Types Of Claims Is My Home Insurance Policy Likely To Cover?
As a lot of home insurance policies will cover employment law claims, it will depend on the type of policy you have. If cover is available, then typically this will include the most common types of claims like unfair dismissal, breach of contract and discrimination claims.
As a general rule, most insurance policies will take effect once you are at the point of issuing your claim. This means that legal costs in relation to pursuing an internal grievance or conducting settlement negotiations with your employer may not be covered under your policy.
How Do I Find Out Whether The Terms Of The Policy Cover My Potential Claim?
As a first step, we always recommend checking the terms of your policy carefully. Usually, the wording of your insurance policy should make it fairly clear as to whether it covers your potential claims. If you are still unsure after this point then you may want to query this with your insurer directly. The insurance company will usually conduct their own checks before confirming whether you are covered under the terms of your policy.
What Steps Do I Have To Take To Make Sure Cover Is In Place?
Once you have spoken to us and contacted your insurance company, your insurer will ask you to provide them with details of your solicitor. Once you have done so, the insurer will usually contact us and ask us to provide a case assessment.
Most (if not all insurance policies) will require any potential claims to have a reasonable prospect of success. This means that any potential claims should have more than a 50% chance of succeeding if they are issued at tribunal.
What Happens After A Case Assessment Is Given?
If a negative case assessment is given and your claims have no reasonable prospects of success, then the terms of your policy are likely to dictate that insurance cover is not available.
On the other hand, if a positive case assessment is given then it is likely that insurance cover should be confirmed and you are free to issue your claim.
Remember that before issuing a claim, you are now required to engage in the ACAS early conciliation process before a claim is filed. If early conciliation is not successful and a certificate has been issued then it is at this point that you can bring a claim against your former employer.
Will The Insurance Policy Cover All My Legal Costs?
The policy wording will usually cover expenses such as court fees and your barrister’s costs. Insurers will offer to cover your solicitor’s costs based on a set hourly rate, for example £125 per hour plus VAT or £150 plus VAT per hour.
It is then up to your solicitor to decide on whether to agree to this rate. If the rate is considered too low, your solicitor may ask you to pay a top-up balance payment. Alternately, you could appoint an alternative solicitor who may be agreeable to the hourly rate.
It's also important to remember that most insurance policies will contain a limit on the overall amount of cover, such as £50,000 or £100,000. We will be able to advise you on whether this limit is likely to cover all of your legal costs.
Can The Insurer Decide Which Solicitor I Use?
If you are seeking advice before issuing a claim, then your insurance company may direct you to a panel solicitor. This is a solicitor who has been specifically appointed by your insurer. This could happen if you are pursuing an internal grievance or entering into settlement negotiations with your employer.
Once you are at the point of issuing your claim, you can decide which solicitor you want to use. You should keep in mind that your insurance company can't tell you which solicitor to choose at this point.
How Can Simpson Millar's Employment Solicitors Help Me?
We have considerable experience in acting for clients under legal expenses insurance arrangements, and will be able to support you through the process.
Our expertise covers all areas of employment law such as unfair dismissal, redundancy, discrimination, TUPE and breach of contract claims.
If you have any questions, please contact a member of our Employment team on 0345 357 9200.