Greater uptake of legal expenses insurance (LEI) could increase access to justice for the "forgotten middle" – individuals whose means exclude them from legal aid or other assistance but without the means to afford private legal services – according to a report presented to the Internatinal Bar Association this week.
The findings, based on research conducted by the IBA’s Legal Policy & Research Unit under the auspices of the Access to Justice & Legal Aid Committee, were launched at the 2019 IBA Annual Conference in Seoul, South Korea.
Titled Legal Expenses Insurance and Access to Justice, the report presents an analysis of nine jurisdictions where the LEI market is either widespread or limited, and explores whether certain factors act as barriers to greater implementation, uptake and use in jurisdictions with a limited LEI market. Germany, Japan and Sweden are analysed as widespread LEI market jurisdictions. Australia, Canada, England & Wales, the Republic of Korea, Scotland and South Africa are analysed as limited LEI market jurisdictions.
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.
Regarding consumer awareness, the availability of information and promotion of LEI as a purchasable product is generally poor. In widespread LEI jurisdictions, coverage is commonly automatically included in insurance products, often unbeknown to the consumer; and in many limited jurisdictions, LEI is not widely advertised.
With regard to limits of indemnity, broader LEI coverage is only available through higher premiums. The option can become too costly to the "forgotten middle", potentially restricting its purchase. Further, the widespread exclusion of coverage for family law and criminal law – two practice areas in which people commonly find themselves needing legal advice and representation – is problematic.
IBA Access to Justice & Legal Aid Committee co-chair, Andrew Mackenzie of Scotland, commented: "Access to justice is a pressing concern for all jurisdictions, regardless of legal system or socio-economic status. Justice simply cannot be served without timely, robust legal representation. 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 policymakers, to play their part."
Anna McNee, the report’s chief researcher and commercial lawyer in the IBA’s Legal Policy & Research Unit, said: "In addition to a multi-disciplinary approach, a multi-pronged tactic could be employed to ameliorate the situation around LEI. 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 expanding LEI coverage to include family law disputes."