Millions of UK families have legal protection - so why aren't some using it?

ARAG CEO, Dave Haynes, speaks to Insurance Business about why legal expenses insurance is often overlooked.

Legal expenses insurance is widely available but sometimes overlooked - here’s why

This article first appeared on Insurance Business

Access to legal support shouldn’t be determined by social standing - it’s an intrinsic human right. That’s the mission global insurance firm ARAG has been championing since its founding in Germany in 1935. And today, in the UK, that mission continues in earnest.

ARAG recently partnered with The Purpose Coalition to raise awareness of legal expenses insurance, launching the Insuring Justice social impact report to highlight ways to improve social mobility and access to justice for all.

Speaking at the launch of the report at the House of Commons in June, ARAG CEO David Haynes discussed the significant role that the legal expenses insurance sector plays in the wider civil justice system - and why there’s a lack of awareness around the resources out there.

“Firstly, there are over 100,000 people who choose to use the resources available to them,” explained Haynes. “So we do have usage. But, clearly, the way in which certain products are sold means they’re often embedded into wider products, sold by insurers or brokers. And, as such, sometimes the awareness of the smaller coverages is not as high as it could be.”

Hidden in home insurance: ‘That’s the biggest drawback’

Say, for example, an individual is buying home insurance. Within that product somewhere is likely a clause granting them access to a legal advice line or legal protection - but it’s not the primary reason for buying the product so can sometimes be overlooked.

“That’s the biggest drawback,” added Haynes. “It’s often sold as an integral part of another product, meaning the person or the SME isn’t always aware of what they might have access to.”

According to ARAG’s Insuring Justice report, more than 10 million households and millions of organisations across the UK have some form of legal expenses policy that will typically give them access to advice over the phone on almost any legal issue, as well as protection from the costs of some of the most common legal disputes.

Despite this, as Haynes told IB, many SMEs simply don’t know this lifeline exists. Legal protection policies aren’t going to solve the huge case backlogs in the justice system, but they certainly keep some cases out of the civil courts and employment tribunals by providing access to legal advice to promote early resolution.

“We’re seeing first dates available for employment tribunals set for 2030,” revealed Haynes. “Imagine you're an employee and you've had a falling out with your employer - then you get a date for 2030? Where do you go from there? The employee is going to be stuck in a legal battle, the employer is going to have it hanging over their head - both parties want to move on [but can’t]. Having early access to advice can resolve that problem quicker.”

‘Every individual should be able to assert his or her rights, not just those who can afford it’

At the crux of this issue is something that goes beyond the intricacies of insurance - it’s a question of social mobility. Having access to legal advice shouldn’t be determined by wealth or social status, instead Haynes believes it’s a case of reducing inequalities and ensuring all parties are on an even footing.

“If somebody has legal protection, say they have £100,000 at their disposal, that puts them on an even footing with [an employer],” added Haynes. “They can’t be brushed aside by somebody who's got the means. Also, this means if a small business goes head-to-head with a bigger business… they’ll have the legal means to be able to fight the case. Legal protection absolutely gives people that right, it puts them in a position where they’re on an equal footing with an employer or a bigger business. Because reducing that inequality and enabling people to assert their rights is very much what we’re about at ARAG - it was actually part of our mission that we set way back in 1935.”

And for over 90 years ARAG has stayed true to that mission, that “every individual should be able to assert his or her rights, not just those who can afford it”. In order to help fight the good fight, however, Haynes would like to see even more engagement from government.

“When we spoke at the Commons recently, we met quite a lot of people including the Chair of the Justice Select Committee. We were having good chats with them around how legal protection can help reduce the justice gap. I don't think there's a lot of money swishing around to fund legal protection for everyone, but what we do want is a voice to be able to say: ‘Look, there is a justice gap, you’ve got access to legal support here’.”

At ARAG, it’s all about raising awareness. Haynes wants to partner further with local government bodies to raise awareness of legal protection, help check if people have it in order to put them on an equal footing with the big guys and to, essentially, help them resolve legal issues without breaking the bank.

“We’ve already spoken to a number of MP’s who deal with hundreds of enquiries a month, from their constituents, some relating to legal problems, and suggested they ask them very simple questions – have you got home or motor insurance, and if so, do either of these policies include legal advice or legal expenses insurance? More than ten million families have got it - but they’re not always aware they do.”

‘We've got work to do with all our business partners’

Insurers, brokers and even employers need to play a key role in raising awareness here too - before people reach that crisis point.

“We've got work to do with all our business partners - insurers, brokers and MGAs who distribute our products - to build awareness of the cover,” added Haynes. “It was great to see so many of them at our House of Commons event because it reinforced that we're not just selling an insurance policy, we're providing a product that helps people through difficult situations, solving their problems, ideally before they escalate and become complex.”

For Haynes, he’d like to do more in helping explain what the product does, how it helps people, and support their partners in promoting it to their customers.

“Alongside this, we've been investing in marketing to build awareness of ARAG. In Germany, ARAG is a household name and people immediately associate it with legal protection. In the UK, we still have work to do. Our priority is to build awareness of who we are, improve understanding of the product, and help customers know what they have and how to use it. And that supports better customer outcomes and fair value.”

Disclaimer: all information in this article was correct at time of publishing.

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