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Notes of Meeting of the All Party Parliamentary

Group on Public Legal Education

July 19th, 5-6pm Room C, 1 Parliament Street.

Note - this is joint meeting with the APPG on Insurance and Financial Services
Chair: Tom Tugendhat MP
Meeting held in Conjunction with APPG on Financial Services.
Discussion on Legal Expenses Insurance
Eddie Coppinger, Director of East London Legal Advice Centre (LAC), opened the
discussion, drawing on LACs experience of using legal expenses insurance to fund
employment tribunal work and some housing cases. He argues that LEI is an
underused resource. He pointed to the YouGov survey the Legal Ombudsman (LEO)
which found that at least 40% of people surveyed had LEI; however only 74% of
which did not fully understand the financial coverage they were entitled to, and only
11% of those surveyed understood the legal services excluded under their policy
terms and conditions. 27% of people stated though that they would pay for LEI if the
cost was between 50 and 100 a year. Some other Countries jurisdictions/legal
systems such as Germany have much wider coverage levels.
Cathy Gallagher from the LSBs Legal Services Consumer Panel addressed the
issue of consumer choice, and how consumers use - or are introduced to - legal
services, drawing from the LSBs tracker survey. From this survey only 8% of
consumers said that they actually had a legal expenses insurance policy; however
this needed to put into context of consumer choice and knowledge. A fifth (20%) felt
that they did not have much of a choice, and one in ten (8%) felt they had no choice
at all when deciding on a legal services provider, with family recommendations stand
out as the main factor in choosing a provide. A summary of the full research can be
reviewed here.
Muara McIntosh from the Civil Justice Council briefly flagged up the work that the a
CJC working group beginning to undertake on the role which BTE insurance might
play in improving access to justice.
Finally, Lesley Atu from Arag addressed current issues in the market. She pointed out
that the UKs distribution model is through "add-on sales," and for BTE LEI this is in
conjunction with an insurance product or embedding LEI within a primary insurance
product such as motor liability, home buildings/contents etc. There is also a market
for distributing through affinity groups and BTE Products have a limited reach due to
this method of sale however there is limited appetite within the LEI industry to
produce stand-alone products and market them directly to the general public as in
continental Europe (200). ATE is typically sold by lawyers who act under a
conditional fee agreement. The FCA's market study of add-on insurance found that

consumers have a poor understanding of insurance products in general and that a

lack of awareness resulted when products were sold as add-ons; consumers lacked
confidence when faced with a decision about whether to opt-out of an add-on
purchase, and often ended up with products that they did not need.
From 1st April the manner in which add-on products are sold has become more
highly regulated. In respect of Government policy, the LASPO Act rules on cost
recovery has effectively required ATE products to be redeveloped, and premium
income has contracted the new regime has led to change of behaviours, and
abandoning more cases. This was now a difficult market, especially for clinical
negligence with NHSLA ATE premium challenges etc. Many small law firms have
withdrawn from personal injury. Employment tribunal fees, enhanced court fees, and
changes to recoverability rules in criminal cases for small businesses have all added
to costs. The proposed small claims court limit increase will affect price of motor LEI
as 90% < 5,000 and costs will not be recoverable.
Key points from discussion and policy issues raised from the floor including by
Robert Bourne (law Society), Peter Holland (DEF), Tom Jones (Thompsons), and
Amanda Finlay covered the following
Both distributors and intermediaries including trade unions, affinity groups
etc - play a key role in how products are explained and consumer knowledge
The importance of information clarity and standards, converting the small print
into better communications to consumers.
Need to reduce the distance travelled between insurer and end-user
The market needed to adapt better to the new recoverability and cost-shifting