Consumer complains after being told by her insurer that she had to pay for the legal costs

Legal Expenses Insurance

Paula complained her insurers wouldn’t cover the legal costs for a claim she was making.

What happened

Paula was making a claim against her builder about some work on her house. She wanted her insurer to cover the legal costs on her policy. Panel solicitors were appointed to assess the claim.

The solicitors told Paula she’d need to mitigate her losses first. They told her to pursue the matter through the National House-Building Council guarantee scheme. Paula didn't agree that she should have to do this, but did carry out their advice.

The National House-Building Council asked Paula’s builder to do some remedial works. But unfortunately matters stalled.

The panel solicitors asked for funding for an independent surveyor to do a report on the defects. They also said that Paula would need to get three quotes for the remedial works. Her insurers said that they wouldn't fund the report. They said that Paula hadn’t shown her case was likely to succeed or that the claim was proportionate.

Paula didn’t think this was right, so she got in touch with us to investigate.

What we said

We found that the insurer’s request for Paula to first go through the National House-Building Council was reasonable. This would be a cost-free route to resolve the dispute and would keep the legal costs down.

In the insurer’s file there was a report from the panel solicitors. This report said that the claim had reasonable prospects of success. This was because of a National House-Building Council report that said there were defects in the property. Their report also stated that Paula’s claim was proportionate to pursue.

We didn’t think it was reasonable to ask Paula to get an expert report. She’d already established that she had a valid claim under her policy. We thought the insurer should fund the expert evidence needed.

We decided that Paula’s insurer should meet the claim for legal expenses. This would also include paying for the expert’s report.