Legal expenses insurance (until November 2012)

The Directive aims to coordinate national requirements for insurance against legal costs.

ACT

Council Directive 87/344/EEC of 22 June 1987 on the coordination of laws, regulations and administrative provisions relating to legal expenses insurance.

SUMMARY

Legal expenses insurance covers the costs of legal proceedings and other services relating to settlement of the claim. This Directive does not apply to risks in connection with sea-going vessels.

Obligation on insurance undertakings to provide for a separate contract or a separate section of a single policy for legal expenses insurance.

Obligation on insurance undertakings either:

• to have separate management for legal expenses insurance;
• to entrust the management of claims in respect of legal expenses insurance to an undertaking having separate legal identity; or
• to afford the insured person the right to entrust the defence of his interests, from the moment that he has the right to claim from his insurer under the policy, to a lawyer of his choice. In all cases the insured must have the right to choose his lawyer where recourse is had to a lawyer.

In the event of a conflict of interest or a disagreement over settlement of the dispute, the insurer must inform the insured person of his right to choose his lawyer freely and of the possibility of using the arbitration procedure.

This Directive is repealed by the Directive on the taking-up and pursuit of the business of insurance and reinsurance as of 1 November 2012.

Last updated: 25.10.2011