Not upheld: claims handling, freedom of choice of solicitor, pre-litigation costs coverage, service standards complaint against ARAG Legal Expenses Insurance Company Limited trading as DAS

Decision detail

Summary

Ms M complained that ARAG treated her unfairly in handling her legal expenses insurance claim for an employment dispute. She objected to the £100 per hour rate offered for her chosen solicitor, claimed pre-litigation costs should be covered, and raised service issues. The ombudsman found that ARAG's policy terms were fair as other firms were willing to act at the specified rate, pre-litigation costs were explicitly excluded under the policy, and ARAG's service standards were acceptable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the principle that policy terms restricting freedom of choice of solicitor are fair provided the specified hourly rate does not render that freedom meaningless. The ombudsman was satisfied that ARAG's evidence demonstrated other panel and non-panel firms were willing to act at the £100 per hour rate on similar cases, meaning Ms M's freedom of choice was not fettered. Regarding pre-litigation costs, the policy explicitly stated ARAG would not pay costs incurred before they agreed to fund legal representation, and Ms M had instructed a solicitor before ARAG's formal confirmation. On service issues, the ombudsman found ARAG's handling fell within expected standards, with only a minor delay that was not impactful. The ombudsman also considered Ms M's vulnerabilities but found ARAG's communication style and engagement were appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website