When you have just lost your job and face an uncertain future, the last thing you need is to have to find money to pay any legal bills incurred in connection with a potential Employment Tribunal claim.
If you are unable to meet the ongoing cost of paying for legal representation, you are then faced with the prospect of either risking a substantial sum of your own money by initiating tribunal proceedings, or taking a smaller settlement that you would otherwise be entitled to, or worse still be forced to abandon your claim altogether.
What many people don’t appreciate is that often you do not need to make such unpalatable choices because you may have the benefit of a legal expense policy. Such policies are usually purchased in conjunction with domestic contents insurance policies, for a nominal additional sum.
The policy, subject to its conditions, will normally provide cover for up to £50,000 to £100,000 of legal expenses. These legal expenses would normally include all solicitors’ fees, VAT and disbursements such as tribunal and barristers’ fees.
Provided that your claim is accepted by your insurer as having reasonable prospects of success, then the fundamental point for you to remember is that under The Insurance Companies (Legal Expense Insurance) Regulations 1990 you are entitled at the point of the start of proceedings or when proceedings have actually started to choose your own solicitor. You are not obliged to use the insurer’s panel firm of solicitors.
However, most insurers insist upon their panel solicitors conducting the initial merits assessment of your claim, which tends to be quite a slow process. For this reason, it is advisable to notify your insurer and get a claim form as soon as you become aware of issues at work.
You should be aware that even if your legal expense insurance policy provides a 24 hour legal helpline, it is very rare for an insurer to agree to fund preliminary work on your matter. You will usually have to wait until proceedings become necessary and in the interim, any legal fees that you incur would be your own responsibility. Insurers tend not to backdate payments.
There are still debates going on as to whether it should be the panel solicitors who takes the initial step of issuing the proceedings, or whether you have the right to insist that it is your own solicitors that does so. On balance the latter scenario seems to have prevailed.
Furthermore, you may not be able to insist that the insurer meets the full hourly cost charged by your preferred choice of solicitor. Recent guidance states that the insurer can only be compelled to pay the “going rate” in your area. However, even with this small limitation, it still gives you the opportunity to choose your own solicitor and pay a modest “top-up” amount. This may be preferable in terms of the service and accessibility provided by your own choice of solicitor.
Overall therefore, having the benefit of such a policy can enhance your bargaining position in any negotiation as well as giving you the opportunity to pursue your rightful claims. For those reasons alone, it is well worth the small additional cost of the policy.