Surely I am not the only landlord worried about new EPC requirements?9:44 AM, 17th February 2021
About 2 weeks ago 125
Is it possible to insist upon using my own solicitors under house legal insurance for builders breach of contract? I employed builders to extend and renovate my house and in short it is a horror story, missing truss, incorrect specifications, leaking house, failing building control etc.
I have house legal insurance for breach of contract. The insurers said they would approve my claim within, 2 days, (deadline missed) 1 week (deadline missed) 3 weeks (deadline missed) 6 weeeks – they have approved my claim!
Given my house is unstable I need URGENT progress and requested I instruct my own solicitors to progress matters going forwards.
I initially asked politely then forwarded the following article:
• by Kerry Underwood
• Senior Partner and Solicitor at Underwoods Solicitors
“The issue of whether an individual who has before-the-event (BTE) insurance is forced to use the solicitors nominated by the insurance company, or whether they have freedom of choice to instruct their own solicitor, is a vexed one about which I get a huge number of enquiries.
“The direction of travel of the courts has all been one-way; that is to give freedom of choice to clients to choose their own solicitor but to enable the BTE insurance company to set limits on the hourly rates and effectively to impose upon those independent solicitors the same terms as would be imposed upon their own panel solicitors.
“The latest chapter in this saga is a recent decision of the Court of Justice of the European Union (CJEU) which held that the freedom of choice of an insured person extends to mediation proceedings, as well as substantive proceedings. That decision was given in the case of Orde van Vlaamse Balies and Ordre des barreaux francophones et germanophone v Ministerraad.
“An insured person’s right to freedom of choice of lawyer under a legal expenses insurance policy stems from the Solvency II Directive. The key wording, which has thrown up so many cases, is contained in article 201(1)(a) of that Directive. It provides:
“(1) Any contract of legal expenses insurance shall expressly provide that:
(a) where recourse is had to a lawyer or other person appropriately qualified according to national law in order to defend, represent or serve the interests of the insured person in any inquiry or proceedings, that insured person shall be free to choose such lawyer or other person.”
Most recent cases have revolved around the meaning of “any inquiry or proceedings”.
“Here, the request was made in proceedings between the Orde van Vlaamse Balies and the Ordre des barreaux francophones et germanophone (the bar associations), and the Ministerraad (Council of Ministers, Belgium), relating to the freedom of an insured person to choose his or her representative in mediation proceedings in the context of a legal expenses insurance contract. The bar associations sought annulment of a 2017 national law as infringing the constitution when read with the Solvency II Directive.
“The CJEU concluded that Article 201(1)(a) of the Solvency II Directive must be interpreted as meaning that the term “proceedings” referred to in that provision includes judicial and extrajudicial mediation proceedings in which a court is involved or is capable of being involved, whether when those proceedings are initiated or after they are concluded.
“Previously, in a landmark decision, the European Free Trade Association (EFTA) Court held that the right to choose one’s own lawyer applied at the stage of notification of the claim, or any effort to settle a matter out of court, or any instruction of the lawyer to assess the legal and factual situation, and thus the right arose as soon as a potential cause of action arose. The judgment was a wholesale rejection of the longstanding arguments of insurance companies that freedom of choice only applied once proceedings have been issued.
“That decision was in Nobile v DAS Rechtsschutz-Versicherungs AG, where the EFTA Court considered whether provisions in a legal expenses insurance contract were compatible with the freedom for insured persons to appoint a lawyer set out in the Solvency II Directive. In reliance on its terms and conditions, the insurer had declared that it was not obliged to provide cover, as the insured person in question had instructed a lawyer without the insurer’s consent before the start of proceedings.
“The court held that article 201(1)(a) precludes terms and conditions in a legal expenses insurance contract that release the insurance company from its obligations under the contract if the insured person mandates an attorney to represent his or her interests, without the consent of the company, at a point in time when the insured person would be entitled to make a claim under the contract. It rejected the argument that the application of the freedom to choose a lawyer was limited to judicial or administrative proceedings. As a result, the court held that the right to choose one’s own lawyer applied at the stage of notification of the claim or any effort to settle a matter out of court, or any instruction of a lawyer to assess the legal and factual situation. The right therefore arose as soon as a potential cause of action arose.
“The court also held that it was not necessary for the insured to notify the BTE insurer in advance. A BTE insurer has no right to deny coverage for the potential proceedings in issue because it deemed such proceedings to be unnecessary, or disproportionate or premature. Such a right could motivate the insurance undertaking to reject coverage, which could deprive the insured person of the protection afforded by the legal expenses insurance contract. If DAS’s contract was to be upheld, then the insured person’s right freely to choose a lawyer would consist solely of the possibility of suggesting a lawyer, the acceptance of whom would be, ultimately, at the discretion of the insurance company.”
I recieved the following reply
As a result of the Eschig case the Financial Services Authority (“FSA”) have asked insurers to confirm that their legal expenses policy wordings are compliant with the Directive on Legal Expenses insurance and are not, therefore, in breach of the UK Regulations. The 1990 Regulations, with which our policy wording is compliant, have not been changed and those Regulations make it clear that freedom of choice arises where recourse is had to a lawyer to defend, represent or serve the interests of the insured in any inquiry or proceedings.
We have in fact had a decision from The Financial Ombudsman Service in relation to this issue.
They have stated that the FSA amended their original letter of 12 August 2010 relating to the Eschiq case with two footnotes which clarified that the ECJ in this case dealt specifically with the question of whether an insurer is entitled to select the legal representative of all insured persons, where a large number of insured persons suffer losses as a result to the same event. In effect, the ruling only applied to class action lawsuits.
The FSA have also provided clarification that a policyholder only has the freedom to appoint his or her own choice of solicitors when it becomes necessary to issue proceedings or where there is a conflict of interest.
We are aware of and have considered the 2012 Court of Appeal judgment in the case of Brown-Quinn and Webster Dixon v Equity Syndicate Management Ltd. You will also be aware that that decision has not overridden the above and that it was based on the policy wording applicable to that claim not being compliant with the 1990 Regulation. We can confirm that our wording is compliant with the 1990 Regulations.
Notwithstanding, the Court of Appeal has confirmed that it is not a breach of the Insurance Companies (Legal Expenses Insurance) Regulations 1990 (“the Regulations”) if it is only the non-panel rate as set out in standard terms and conditions that a non-panel solicitor is entitled to recover. The fact that they may seek to charge you over this sum is a matter between you and your solicitor.
We advise that if they are not able to accept our standard terms of appointment then we are happy to refer the matter to the panel firm.
Whilst we accept that you have an unqualified right to choose your own lawyer, the Court of Appeal confirmed that insurers can seek to limit the costs for which they are liable to you provided that the freedom of choice guaranteed by the 1987 Directive is not rendered ‘meaningless’. The onus is on you and your solicitor to provide evidence that the costs covered are so insufficient as to render your freedom of choice of solicitor meaningless.
We, therefore, maintain our stance as outlined in our previous correspondence that there is no cover for non-panel firms prior to the issue of court proceedings
Attached to an email stating the following:
Please see the attached letter in response to the “Rights to choose own lawyer” document you sent across.
You state that you are open to proceed with Lyons Davidson, but only on the basis they “commit to very strict timescales going forwards”. Can you provide some clarity on this? What timescales would you be expecting Lyons Davidson to adhere to?
Please ensure our claim reference number is clearly quoted in the subject of all emails sent to us.
As a non lawyer I am given to understand that I have to use the insurance recommended panel solicitors yet I can insist upon some timescales.
The panel solicitors are still failing to give any timescales, they have had my matter for 3 months now and have failed to write a single letter to the other side.
Questions: Am I able to insist upon using my own lawyers? (Even if the insurers paid 1/2 – 3/4 of their fees I need some progress and this option would be acceptable
The panel solicitors still will not commit to any timescales, and tonight whilst chasing timescales as the insurers recommended I received an auto-reply that the solicitor handling my matter is away (he does not state for how long)!
1/ May I legally insist upon using my own lawyers and the insurers pay the panel rate prior to proceedings (currently I am at the stage of writing an LBA)
2? If I cannot legally insist upon instructing my own lawyers initially, what experienced/advice can you offer to insist the panel solicitors act upon my instructions and write letters to the other side within reasonable timescales?
Currently, I am living with my family in an unstable house that leaks… I have confirmation that I have a good claim and legal insurance – how can I insist the panel solicitors will progress my claim.
I would much appreciate any help and assistance.
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