Legal protection insurers cover costs (e.g. lawyer`s fees and lawyer`s fees) incurred in the event of unforeseen circumstances. These costs usually include lawyers` and court fees, witness fees, translation costs or experts` fees. According to national legislation, legal expenses insurers also provide legal services and represent policyholders amicably or in court. The policyholder is usually protected in disputes in various areas of law such as contract law, labor law, consumer law and family law (including divorce in rare cases). The premium is normally paid annually. Legal Expenses Insurance (LPI), also known as Legal Expenses Insurance (LEI) or simply Legal Expenses Insurance, is a special line of insurance [1] that facilitates access to justice by providing legal advice and covering the legal costs of litigation, whether the case is brought by or against the policyholder. According to national law, legal expenses insurers may also represent the policyholder amicably or even before the courts. The Canadian market has grown rapidly and several companies (some domestic, some American) offer legal expenses insurance. In 2016, the gross legal expenses insurance premium was approximately C$56 million; almost twice as many as the previous year. To further promote access to justice, the Canadian Bar Association partnered with DAS Canada, a licensed legal protection insurance company in Canada, in 2013. [9] In Quebec, legal protection insurance is supported and promoted by the Barreau du Québec.
[10] Defence costs refer to all costs of defending a claim. These expenses include the cost of hiring a lawyer, court fees, investigations, fact-finding, filing legal records and other related costs. From an actuarial point of view, various liability insurances cover these costs. There are different forms of legal expenses insurance, which have developed in accordance with national case law. Traditionally, legal expenses insurance covers unforeseen events such as pre-event insurance (BTE). The event in this case is the incident that triggers the pursuit. However, in some countries (e.g. Australia, Canada, and the United Kingdom), it is also possible to get coverage called post-event insurance (ATE) after a dispute has been initiated. In the U.S. market, legal protection and assistance is often provided through legal plans or prepaid legal services, which in most cases are not insurance.
Legal expenses insurance has a history of 100 years. [2] The concept was born in 1911, when members of the Automobile Club de l`Ouest were offered several additional services, including protection in the event of fines or litigation before police courts. This basic legal protection was later extended to road accidents and led to the first legal protection insurance in France, offered by “La Défense Automobile et Sportive (DAS)”, founded in 1917. La Défense Automobile et Sportive (DAS) offered motorists and athletes legal services and reimbursement of legal costs. [3] In the United Kingdom, legal expenses insurance is mainly sold directly to the final consumer without an intermediary. The focus is on preventive dispute resolution by in-house lawyers. 80% of problems are solved internally. In its November 2017 report[12], The Law and Practical Ties of Before-The-Event (BTE) Insurance – An Information Study, the UK Civil Justice Council concludes that legal protection insurance provides many people with access to important legal assistance. To this end, LPI`s legal advice lines fill a real gap in the market and, in this regard, insurers are significantly improving access to justice in today`s landscape. The report also finds a general lack of consumer awareness of the existence of legal protection coverage as such, as well as the extent of coverage. The report highlights that all stakeholders (lawyers, brokers, insurers, bar associations and the advisory sector) can actively contribute to raising awareness of legal expenses insurance. The report thus confirms the previous conclusions of two previous reports (Thematic Review of the UK`s Motor Legal Expense Insurance industry by the Financial Conduct Authority (FCA) of 2013,[13] Report of the UK Ministry of Justice published in October 2007[14]).
The FCA found that many consumers were unable to distinguish between motor insurance cover (liability protection for liability damage) and motor legal protection insurance (pursuing claims for uninsured damage and protection from criminal prosecution). The 2007 Department of Justice report reveals that although 59% of the UK population has some form of legal protection insurance (whether they know it or not), less than one in four consumers have ever heard of BTE or ATE insurance.