Legal Expenses Insurance in UK Law

Waiver would never operate if "full facts" meant each and every detail of factual information which diligent digging can produce. Full facts relevant to the decision to be taken must be confined to the essential facts. What is important is that the litigant should understand the nature of the case rather than the detail. It is sufficient if there is disclosed to him all he needs to know which is invariably different from all he wants to know.

A second aim was to improve access to the courts for members of the public with meritorious claims. It was appreciated that the risk of incurring substantial liabilities in costs is a powerful disincentive to all but the very rich from becoming involved in litigation, and it was therefore hoped that the new arrangements would enable claimants to protect themselves against liability for paying costs either to those acting for them or (if they chose) to those on the other side.

This decision demonstrates a proposition that Mr Hillier has not sought to challenge. Funding alone will not justify an Order against the funder under Section 51. I do not consider that an Order under Section 51 will normally be appropriate where a disinterested relative has, out of natural affection, funded costs of a claim or a defence that is reasonably advanced.

That very evidence leaves me uncertain what the effect on the availability of such cover would be if legal expense insurers were exposed to costs orders under Section 51, but I do not believe that that question is critical to the answer in this case.

An Order under Section 51 that a non-party pay costs will only be justified when exceptional circumstances make such an Order reasonable and just. In this judgment I have explored some of the categories of exceptional circumstances that may justify such an Order. I have reached the conclusion that the existence of legal expenses insurance with a limit of cover that has been exhausted does not make it reasonable or just to order the insurer to pay the costs of the adverse successful party.

By the same token that Phillips LJ in Murphy found legal expenses insurance to be in the public interest (see paragraph 26 above) so too in my judgment the pure funding of litigation (whether of claims or defences) ought generally to be regarded as being in the public interest providing only and always that its essential motivation is to enable the party funded to litigate what the funders perceive to be a genuine case.

It was therefore able to market the cover as its own product and had a developed a large following among solicitors who regularly acted for clients under conditional fee arrangements. Towards the end of 2004 Europ Assistance indicated its intention to withdraw from the market when its binder expired and accordingly on 1 st December 2005 Temple entered into a binder with QBE which came into effect on 1 st January 2006. QBE had no previous experience in the writing of legal expenses insurance.