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DAS attacks Consumer Focus report on legal expenses insurance

18 April 2011

Legal expenses insurer DAS has strongly attacked a Consumer Focus report on BTE insurance, saying the authors of the report have “no better understanding” of the market than Lord Justice Jackson.

The report claimed that of the 25 million UK households with some kind of BTE cover, 43 per cent of people said they knew little or nothing about it.

Consumer Focus said that the legal expenses market would be improved if there was freedom of choice of solicitor and an independent appeals system.

However, Paul Asplin, chief executive of DAS, said that giving consumers a completely free choice of solicitor would cause legal costs to escalate dramatically.

He said the suggestions made by Consumer Focus would lead to a “massive decline in the number of people who are insured against the cost of common legal disputes at the very time that the government is doing its best to cut off avenues through which ordinary people can afford to access the justice system”.

Asplin said the German BTE insurance market, where most consumers buy stand-alone legal expenses insurance policies, typically cost at least ten times the price of a UK policy.

“We have been arguing for some years that the UK will inevitably move towards a stand-alone model as awareness and usage of the policies grow,” he said.

“But such a market would take many years, if not decades, to reach even a fraction of the population covered by add-on policies today, and those on lower incomes would be even less likely to enjoy the cover that, arguably, they need the most.”

Asplin said it was unfortunate that Lord Justice Jackson had created the “myth that BTE legal protection could simply fill the justice gap that his proposed reforms are going to create.

“The suggestion was never substantiated or elaborated on by either Jackson or the government, and it’s certainly not something that anyone who actually understands legal expenses insurance has ever agreed with.”

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