Can I Change Law Firm Part Way Through a Claim?

This is a case where there was a legal expense insurance policy for the Claimants to pursue a claim before the Industrial Tribunal. There were three Claimants involved. One had instructed a firm that was not on the insurance company’s panel, the other two had instructed a firm on the panel but the fee earner who was handling their claim had moved to the law firm who was instructed by the first Claimant. These two Claimants decided that they wanted the same solicitor to keep handling their case, so requested that the law firm pass the case over.

The insurance policy dictated that the Claimant would take reasonable steps to keep any amount that the Insurers had to pay as low as possible. The Insurers would not agree for the law firm to act for all three Claimants unless the law firm agreed not to charge more than the fixed hourly rate that was stated in the Insurer’s terms of appointment for non-panel solicitors.

The Insurers said that in the two cases where the Claimant wanted to move from panel to non-panel law firm, if the new solicitors did not agree to the hourly rates stipulated in their policy, the insurance cover would end and they would not be obliged to cover their legal fees.

The Claimants argued that the Insurer’s decision to not cover their fees for the new solicitors would be in breach of Regulation 6 which states that insured (Claimant) should have a right to choose his own solicitor.

The Court held that the first Claimant who had chosen a non-panel solicitor at the onset was entitled to choose those solicitors and the insurers were in breach of regulation 6 not to allow the Claimant to choose his own solicitors to act under the policy.

More importantly, the Court decided that the choice of the Claimant to appoint a non-panel solicitor did not of itself constitute undertaking of an unreasonable step or breach of any terms of the insurance policy and that the Insurer’s claim that they were entitled to cancel the policy was in breach of Regulation 6.  The Court went on to comment that:

“The Directive and the Regulations could not be interpreted as providing that the freedom of choice of the client was limited to one selection or election at the onset. But there was implied terms of the contract of insurance that the insured would not unreasonably refuse the insurers decision to appoint a solicitor of his choice. In this case the Claimants wanted to transfer the file from panel to non-panel because the fee earner at the panel firm had moved to the non-panel firm. The Court held that on the decision by the insurers was unreasonable and the last two claimants should be allowed to change to a solicitor of their choice”.

If you want to know more about using panel or non-panel solicitors, want to switch from your current law firm, or want advice on starting a new personal injury claim, call our specialist team on 0800 389 9136 now!