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This is a trend that shows no signs of reducing in the coming months, according to our Chief Legal Officer Rebecca Conway, who recently took part in an in-depth analysis of the legal expenses industry conducted by Insurance Post.
We have already seen an increase in calls to the legal helpline, particularly from commercial legal expenses customers, and we also expect to see an increase in claims levied against businesses that can no longer meet contracts as a result of Covid-19. However, this is unlikely to have a catastrophic effect on costs, Rebecca explained:
“It’s highly unlikely that there will be sufficient prospects of the claim being successful in these cases, a key condition of legal expenses, meaning the claim cannot be pursued. Where the business has ‘gone bust’, in these instances the prospects of success assessment will be based on the likelihood of achieving a successful outcome from an insolvent business.”
When looking ahead at the impact of Covid-19 on the industry, Rebecca urged that we cannot merely take into account the number of claims as indicative of the costs, we must consider how many of these claims proceed to full representation, which at this stage is unknown.
One thing that is clear is that Covid-19 is raising the profile further on the value of legal expenses. Rebecca commented: “Legal expenses does have a high profile with consumers where compared to other ancillary products available. We do expect awareness to increase.”
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