Not upheld: unfair claims handling - solicitor hourly rate cap complaint against AmTrust Specialty Limited

Decision detail

Summary

Mrs P complained that AmTrust treated her unfairly by limiting the hourly rate for her own choice of solicitor to £150 per hour plus VAT for a complex employment dispute involving disability victimisation. She argued no competent solicitor with relevant expertise would accept that rate. AmTrust consulted panel firms and increased the rate from £100 to £150 per hour plus VAT based on their feedback. The ombudsman found the rate was reasonable and did not render Mrs P's freedom of choice meaningless, as evidence showed other solicitors were willing to work on similar cases at that rate. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the principle that a contractual hourly rate cap is not unfair provided it does not render the policyholder's freedom of choice meaningless. The key test is whether other panel and non-panel firms are able to take on similar cases at the specified rate. Evidence showed that both panel and non-panel solicitors were willing to work on similar employment law cases at £150 per hour plus VAT, demonstrating that Mrs P's freedom of choice was not fettered. The fact that her specific chosen firm declined the rate does not mean AmTrust acted wrongly, as alternatives were available.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website