A new report from the Association of Consumer Support Organisations (ACSO) the trade body for companies which represent consumers in the civil justice system, concludes that legal expenses insurance (LEI) should play a vital role in maintaining access to justice for citizens.
Matthew Maxwell Scott, ACSO's executive director, said that the UK has slipped from 13th to 20th in the World Justice Project’s ranking of countries with the most accessible and affordable civil justice system, “after years of swingeing budget cuts and legislation that has made life harder for [injured] people to seek redress.”
“When the Civil Liability Act became law in 2018, the government said that LEI would provide citizens with the safety net they needed to cover them for the cost of making a claim, yet it has done nothing to promote the product. People are in the dark about the benefits LEI brings, both to their individual rights and the civil justice as a whole.”
He explained that as well as paying for litigation, policyholders can access legal and tax helplines, digital legal services (including wills and legal letters), and counselling. LEI providers can also advise whether a claim has merit, saving the courts and individuals time and money, and also ensure that customers are represented by regulated lawyers who’ve been properly vetted by the insurer.
Maxwell Scott said: “LEI gives some fundamental protections to the average UK household. During the pandemic, LEI providers saw increases in employment law enquiries, landlord and tenant issues, property and contract disputes. LEI policies also generally provide cover for the whole family, rather than individuals, and premiums are highly competitive.”
He said the report, which is sponsored by LEI insurer ARAG and law firm Lyons Davidson, comes at a time when civil justice has never been under so much pressure.
The Law Society found in 2021 that the number of civil legal aid providers starting work had almost halved over the previous decade, with the number of new matters started dropping from close to a million in 2009 to just over 100,000.
At the same time, the national network of law centres and other not-for-profit services, through which people can get legal advice on almost any issue, halved between 2013/14 and 2019/2020, as budgets were slashed by more than 40 per cent, forcing many to close.
The UK market for LEI is worth £450m and approximately 25 million people (have the cover, which is normally sold as an add-on to a home or motor policy. Maxwell Scott said: "We want to see more LEI sold as a standalone product, with citizens supported by government awareness programmes to boost take up.
"This is undoubtedly a product whose time has come. Providers have re-booted LEI cover for the post reform world, and we urge the industry and the government to get behind it and make sure that people understand the value LEI can bring if they find themselves needing to make a claim."
The LEI report can be found in the members' area of the ACSO website.