Legal expenses insurance may help 'forgotten middle'

Greater uptake of legal expenses insurance (LEI) could increase access to justice for the ‘forgotten middle’, an International Bar Association (IBA) report suggests.

LEI allows individuals to obtain legal assistance from a private provider with some or all of the expenses covered by an insurer.

The report, Legal Expenses Insurance and Access to Justice, found that of the nine jurisdictions studied, England and Wales had “a limited LEI market jurisdiction”.

The report’s findings suggest that the ‘forgotten middle’ – those without disposable income to spend on private legal services, but whose earnings or assets prohibit qualification for legal aid or pro bono assistance – could benefit enormously from LEI.

However, three key barriers to increased implementation and uptake of LEI policies are identified in the report, including lack of awareness among consumers; limits of indemnity; and perceptions of conflicting interests of legal representation appointed by the insurer or in-house lawyer employed by the insurer.

The availability of information and promotion of LEI as a purchasable product is generally poor, the report found, and not widely advertised. Broader LEI coverage is also often only available through higher premiums and the option can become too costly to the ‘forgotten middle’, potentially restricting its purchase.

IBA access to justice and legal aid committee co-chair, Andrew Mackenzie, commented: “It is our duty as a profession to ensure that all who need access have it. However, the legal community cannot achieve this in isolation. I urge others, including the insurance industry and policy-makers, to play their part.”

IBA access to justice and legal aid committee co-chair, Mark Woods said that no-one should be left behind in the fight for justice for all, including the ‘forgotten middle’, but there is no easy solution.

He added: “However, that should not stop us from effecting change where we stand. We could begin with the report’s proposals to increase individuals’ awareness of LEI as a purchasable product; improve information given to existing policy holders regarding coverage; improve data gathering to measure the spread and impact of LEI and encouraging bar associations and law societies to establish and maintain panels of legal practitioners who meet predetermined qualifications and are prepared to act based on a set scale of fees.”

Anna McNee (pictured), the report’s chief researcher and commercial lawyer in the IBA’s legal policy and research unit, said that in addition to a multi-disciplinary approach, a multi-pronged tactic could be employed to ameliorate the situation around LEI.

She added: “This would include removing the limitations on an individual’s ability to choose their own lawyer; dispensing with panel lawyer schemes, which will assist with removing the perception of conflicting interests; and expand LEI coverage to include family law disputes.”

The research can be viewed here. 

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