New work for solicitors?

A High Court ruling on the powers of insurers to veto a policy holder’s choice of lawyer could open up new avenues for solicitors, says the Association of Costs Lawyers.

In Brown-Quinn & Anor v Equity Syndicate Management Ltd & Anor [2011] EWHC 2661 (Comm), Mr Justice Burton held that before-the-event (BTE) legal expenses insurers cannot stop policy holders instructing non-panel firms because the lawyers’ rates are higher than the prescribed rates set by
the insurer.

The case involved three employment and discrimination claims. The insurers contended that policy holders could instruct non-panel solicitors as long as they did not charge more than their prescribed rates of £125 and £139 per hour. However, the policy holders instructed Webster Dixon, which charged £274 for a partner or associate, £210 for a solicitor and £105 for a trainee.

Iain Stark, chairman of the Association of Costs Lawyers, says the ruling will give solicitors new opportunities to tender for work.

“The judgment doesn’t provide clarity [on what rates will be paid] but it does provide an opportunity,” he says.

At the same time, solicitors who discount the use of BTE because of the rates on offer and instead put clients on conditional fee agreements will have to change their approach and give the BTE option more consideration, he adds.