The President’s Podium gave a very misleading impression of the position regarding the question of free choice of lawyer under a legal expenses insurance policy.

The right of free choice, when it arises, was introduced by the 1987 European Directive and has nothing to do with preserving ‘freedom to choose’.

Of course, the mere fact that Lord Justice Jackson thinks that legal expenses insurance is a good idea will have no impact whatsoever on the availability of the cover. It is also misleading for the Law Society president to suggest that ‘cover tends to be restricted to initial advice and representation’. This is not correct – LEI deals with a very wide range of complex and expensive cases as well as more routine matters. Likewise, it would be unthinkable that a serious regulator such as the Financial Services Authority would allow any insurer to issue a policy without terms and conditions and financial limits, as this would be completely irresponsible.

It is also wrong to claim that ‘current legislation provides that where an individual becomes engaged in litigation, they are entitled to a free choice of lawyer’. The applicable law (both the directive and the 1990 regulations) requires ‘free choice’ to be offered only when proceedings are commenced (most insurers also accept an ET1 in the same way) and that view is confirmed by insurers, the European Commission, the Financial Ombudsman Service and the FSA alike. The Eschig case has no impact on already compliant insurers and the letter to which Linda Lee alludes (sent by the FSA) was subsequently amended to reflect this.

Ms Lee’s complaints about referral fees are something of a side issue, but if the Law Society really object to them, why did they permit them in the first place?

The truth is that the biggest threat to access to justice comes not from LEI insurers who handle hundreds of thousands of successful cases every year, but from those solicitors who try to overcharge at the expense of insurers and therefore policyholders. If a free choice ‘utopia’ became a reality, the cover that millions currently have would simply become unaffordable and access to justice would plummet.

Finally, the FOS statistics Ms Lee quoted are years out of date; the fact is that of all insurance complaints received in the year ended March 2010, less than 1% related to LEI and far fewer still were upheld.

Kathryn Mortimer, head of Legal Services, DAS Group