Research highlights necessity of legal expenses insurance

26 March 2015

Lawyers talking around a tableIndependent Research, carried out by Bristol-based legal insurance specialist ARAG, amongst solicitors in England and Wales reveals that since the Legal Aid Sentencing & Punishment of Offenders Act (LASPO) came into force in April 2013, access to justice has been greatly restricted and the deduction of after-the-event (ATE) premiums and other costs from compensation has reduced claimant settlements.*

These changes reinforce the need for before-the-event (BTE) legal expenses insurance, especially for those without the financial means to fund a claim.

Key findings:

  • 80% of solicitors say claimants have reduced access to justice with 64% saying it has been significantly restricted. Solicitors are now more risk averse and take on fewer personal injury cases.
  • At the same time, claimants have to pay higher costs, including the ATE premium, which will then be deducted from their award. This has a particularly adverse effect on those with lower value claims including RTAs.
  • 72% of solicitors say that the 10% increase in general damages does not fully counter the additional costs deducted from claimants' damages with only 11% believing they secure the 10% uplift introduced in LASPO, in all cases.
  • 62% of those interviewed have found that settlement times have not improved, with 11% saying that cases are actually taking longer to settle.

“Lord Justice Jackson suggested, rather rashly, that BTE cover would fill the justice gap that his reform proposals created”, comments ARAG Head of Sales, Andy Talbot. “Clearly this has not been the case and thousands of genuinely injured people are being denied access to justice. While millions of people do have the benefit of pre-paid legal protection, it is still those who could least afford to fund a legal case that are less likely to have it.

“Defendant liability insurers may be delighted that their exposure has been reduced by LASPO but claimants are being short-changed by the new system. The balance needs to be restored and, in the absence of any political will to do so, it's in the hands of brokers to make the difference”.

ARAG offers a wide range of policies for families, motorists and landlords that can be tailored to specific sectors and enhanced with unique benefits to encourage high uptake rates where cover is not included within the main policy.


* The research was conducted by independent market research consultancy MSS and comprised an initial set of qualitative tele-depth interviews with a sample of ARAG UK’s Solicitor clients, followed by a more robust quantitative sample of 100 telephone interviews chosen at random from a database of Solicitors operating throughout England and Wales. All respondents were key decision-makers, involved with personal injury and/or clinical negligence cases. The two surveys were conducted between September and November 2014, some 18 months following the introduction of the LASPO reforms.

For more information please contact

Andy Talbot Head of Sales

0117 917 1685/


David Haynes Head of Underwriting & Marketing

0117 917 1684


Rachael Wornes Marketing Manager at ARAG

0117 917 1578 /


Notes to Editors

ARAG plc is part of the ARAG Group, the largest family-owned enterprise in the German insurance industry, employing 3,600 people internationally, generating premium income in excess of €1.5 billion.

Combining the best of Assistance and ‘Before’ and ‘After’ the Event solutions, ARAG plc has developed a comprehensive suite of insurance products and services for a wide range of legal issues for businesses and private individuals.

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