Welcoming yesterday's (9 December) very positive comments by the Lord Chancellor on his discussions with the legal expenses insurance market in the House of Lords debate on legal aid and civil justice reforms, Mark Boléat, ABI's Director General, said that the legal expenses insurance market is looking forward to meeting the new opportunities and challenges from the proposed reforms. It is intended to abolish legal aid for cases involving money or damages, replacing it with no-win, no-fee agreements, backed by insurance.

Mark Boléat said:

"The changes to legal aid will have an important impact on the development of the legal expenses insurance market. The wholesale and radical reform of legal aid will mean that legal expenses insurance, through its diverse products, will become one of the main means of providing affordable access to justice. We will be working closely with the Lord Chancellor's Department to ensure that the market can develop to provide as wide-ranging and affordable cover as possible."

Currently around 18 million people have some form of legal expenses cover. Policies fall into two main types. "Before-the-event policies" cover events which have not occurred. These include motor insurance on insured loss recovery, policies provided in conjunction with household contents insurance and commercial policies. "After-the-event polices" provide cover for legal expenses for legal actions which have not occurred. These include conditional fee arrangements.

Mark Boléat added:

"The insurance industry is extremely competitive and has an enviable track record of developing new products to meet changing consumer needs. Insurers will be looking to develop new policies to meet any changes in the legal justice system, enabling as many people as possible to have access to legal expenses cover when taking legal action."

Notes

1. In the House of Lords debate "Legal Aid and Civil Justice Reforms" the Lord Chancellor said:




"The insurance industry is competitive. It is already developing the products that will be needed...

"The innovative capacity of the industry to match insurance cover to need should not be doubted. The industry has told me that they expect to move sufficiently quickly to develop and launch new products..."




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