Legal Expenses Insurance is a great way to fund your Employment Tribunal Claim. However, getting a funding decision from insurers can sometimes be tricky. Read on to see how I recently helped a client overturn their insurer’s decision and obtained full funding to pursue a claim of Unfair Dismissal.
What Is Legal Expenses Insurance?
Legal expenses insurance can usually be found as a benefit attached to home insurance. Some of my clients have no idea they have this cover in place because their insurer makes no charge for it. Other insurers may only charge a nominal sum of between £10 to £30 a year. For this reason, the cover can easily be overlooked.
I always advise clients to check their home insurance to see if legal expenses cover is available. It is also important to check any other insurance policies held, such as car, contents, credit card, or even if the cover is attached as a benefit with a bank account. Don’t be deterred if you can’t immediately find the words legal expenses insurance, it could be that the cover has been termed “family legal protection” or words to that effect. If in doubt, just call your insurance provider to get a clear and definitive answer.
How To Get Covered?
If you have legal expenses insurance, there are certain steps that must be taken to access the funding. I am always happy to help clients through this process because I appreciate it can be a little daunting dealing with the paperwork. Most insurers will require a summary of the key facts of the case, copies of relevant paperwork, an assessment of the prospects of the case succeeding (in percentage terms), a valuation of the potential compensation, an estimated timeframe for the case to reach a conclusion, and the likely costs associated with pursuing the case. As I say, I am always pleased to help clients provide this information to their insurers.
If on receipt of the above information the insurer is happy that the claim has reasonable prospects of succeeding and it is proportionate to pursue, they are likely to agree to cover all reasonable legal costs and disbursements. Cover tends to be available from the point that proceedings can be issued and so this would be after any internal procedures (such as grievance or discipline) and after any ACAS early conciliation.
Potential problems in obtaining funding can arise if:
- The insurer does not agree that funding was in place at the relevant time. All insurers are different and so it is critical you check your own policy here. However, as a rule of thumb, most insurers will insist that you have held your policy for at least 30 days before you make a claim, and/or that the policy was in place before the issue arose. As I say, all insurers have slightly different terms meaning it is very important to check the policy conditions.
- The insurer does not agree the Employment Tribunal claims have reasonable prospects of success. This is where the insurer agrees you have cover in place but does not believe your claim is likely to win. For example, if you are claiming Unfair Dismissal, the insurer might disagree with your claim and believe there was a fair reason for the dismissal.
- The insurer does not agree the claims would be proportionate to pursue. Again, this is where the insurer agrees you have cover in place, you may even have a good claim, but they don’t believe the claim has sufficient value. For example, they might believe the cost of pursuing the claim would outweigh the potential compensation recoverable.
I often assist clients who have paid for their insurance cover but are met with funding resistance because of these three main issues.
Steps to Overcome the Problems
There are several steps that can be taken to try and overcome funding problems. These include: –
- Ask your insurer to provide an explanation of why the funding was refused. Their decision may be based on a simple error that you can rectify yourself once you understand their rationale. For example, I have seen client’s refused funding because their insurer has simply misunderstood the date of the relevant incident. Obtaining a written explanation may sometimes be all that is required to get the right funding in place.
- Ask your insurer for a second opinion. Most cases I assist with tend to be based on a rejection for funding because of a perceived lack of prospects of success. In this case, it is again important to have a written explanation of why the funding was refused. If you believe your insurer has misunderstood the nature of your claim, or decided too harshly against you, then you can ask for a second opinion. If your insurer agrees to obtaining a second opinion, it is always important to explain to them why you believe their initial decision was incorrect, with supporting information and evidence if possible.
A Recent Case
I recently assisted a client who I believed had an excellent claim for Unfair Dismissal. Unfortunately, when they asked their insurer to fund their claim, they refused on two specific grounds. Firstly, they did not believe the claim could succeed. They placed prospects of success well below the required 51%. Secondly, they believed the claim was worth very little and so costs would outweigh benefit.
How I Helped
I assisted my client by drafting a detailed challenge on their behalf and asking the insurer to arrange a second opinion. I set out the legal framework of my client’s claim and confirmed that based on my assessment of the papers at that initial stage, the prospects of success far exceeded the funding threshold of 51%.
I also prepared a draft schedule of loss highlighting the potentially far higher value of the claim than the insurer’s assessment. Whilst the insurers were correct that my client had found new employment very quickly, they had failed to consider other recoverable losses that formed part of the compensatory award including a) loss of bonus, b) loss of share options and c) loss of the statutory notice period.
Within just a few weeks the insurer had passed my challenge to their panel of barristers. They reviewed my assessment and agreed the claim had very good prospects of success (65%), and that the claim was proportionate to pursue. This meant the initial funding rejection was overturned and my client was able to pursue their claim in the Employment Tribunal with full funding support from their insurer.
Let Lincs Law Employment Solicitors Help You
If you are considering a claim in the Employment Tribunal and require assistance obtaining funding under your Legal Expenses Policy, call us on 01522 440512 for a free consultation. Alternatively, for more information about funding claims in the Employment Tribunal, visit https://lincslaw.co.uk/fees/employees/
Sophie Goodwill, Specialist Employment Law Solicitor
Lincs Law Employment Solicitors