Aphra claims for legal expenses under her landlord insurance policy

What happened

Aphra was renting out a property. Her tenant left owing rent, so she made a claim under her landlord insurance policy which offered legal expenses cover.

The insurer wanted to know whether they should give Aphra legal assistance to pursue the tenant, so they referred the claim to a panel law firm. The panel firm got back to the insurer advising that Aphra’s prospects of success were less than 51%. For that reason, the insurer declined the claim.

Aphra felt the insurer’s preferred law firm’s assessment was wrong and complained to the insurer.

The insurer explained that the law firm hadn’t been able to contact the tenants. However, it had carried appropriate searches to find a new address or contact details for them, but without success.

The law firm had told the insurer this was one of the reasons why it was unlikely Aphra would be able to recover the money. Because, without contact details, they wouldn't be able to serve proceedings on the tenants,

What did we do?

We looked at the terms of Aphra’s policy. It said that a claim must have ‘reasonable prospects’ of success – that is, greater than a 50% chance – to be accepted. That included reasonable prospects of recovering the unpaid rent.

We studied the panel solicitor’s advice and didn’t see any obvious flaws, or anything that might look incorrect to someone outside the legal profession. We were satisfied the advice was from a suitably qualified lawyer and that the panel solicitor took reasonable steps to trace the tenant and assess the financial position.

We were satisfied the insurer was entitled to rely on the legal advice it obtained from its panel solicitor. Insurers aren’t lawyers. It’s fair and reasonable for them to rely on the advice of qualified lawyers, as long as that advice isn’t obviously incorrect to someone from outside the legal profession.

For those reasons we didn’t uphold the complaint.