Not upheld: unfair withdrawal of insurance cover complaint against ARAG Legal Expenses Insurance Company Limited

Decision detail

Summary

Miss M complained that ARAG unfairly withdrew cover for her legal expenses insurance claim after she dismissed her appointed solicitor in 2025 and requested a new one. ARAG relied on a policy condition stating that if a policyholder dismisses their representative without good reason, cover ends. The ombudsman found that Miss M's dismissals of two previous solicitors were motivated at least partly by disagreement with their legal advice and strategy, not by genuine conflicts of interest or inability to represent her. The ombudsman concluded ARAG fairly applied the policy condition to withdraw cover, though acknowledged a delay in communicating the decision and upheld ARAG's offer of £150 compensation for that delay.

The Ombudsman's reasoning

The ombudsman found that the policy condition allowing ARAG to end cover when a policyholder dismisses their representative without good reason was validly triggered. The dismissals of both F (2024) and C (2025) were found to be based at least partly on disagreement with legal advice and strategy, not on genuine conflicts of interest or inability to represent. While the condition's purpose is to limit costs from repeated representation changes, ARAG acted fairly in applying it. The delay in communicating the decision was acknowledged but did not affect the fairness of the underlying decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website