Webster Dixon wins legal expense insurance case

The decision was handed down by Mr Justice Burton last week following a hearing earlier this month in a case brought by Holborn firm Webster Dixon against Lloyd’s of London insurer Equity Red Star and ULR Norwich.

Webster Dixon instructed Colin Wynter QC of Devereux Chambers to lead Thomas Cordrey of the same set for the claimants while Horwich Cohen Coghlan instructed Kings Chambers’ Dr Mark Friston for the defendants.

The claim was launched by three policyholders who had instructed Webster Dixon with the agreement that their fees would be paid using the before-the-event (BTE) insurance they had in place. However, the underwriters of those policies refused to pay the rates because the policyholders had not used lawyers from the underwriters’ legal expense panels.

Ruling, Burton J held that insurers cannot reject policyholders’ choice of solicitor on the basis of price alone.

“The correct approach is […] to conclude that the choice of his own lawyer by an insured shall not of itself constitute the taking of an unreasonable step,” the judge said.

Nevertheless, he added, it was “inevitable and right” that the reasonableness of the fees charged by non-panel members was comparable with those charged by panel members.

The insurer would also need to consider the specialism of the lawyer, their location and the availability of other lawyers before rejecting the fees claim, the judge said.