Kerry Underwood


with 16 comments

In my blog earlier today – DIRECT LINE OR DIRECT LYING? – INSURERS AT IT AGAIN (7) I set out paragraph 14 of the Terms of Business sent by DLG Legal Services, a firm of solicitors and part of the Direct Line Group, to  clients.

That purports to limit liability in negligence to 200% of the amount of their fees for the individual matter or £100,000.00, whichever is the lesser.

Several people, including Richard Moorhead and my own business partner Robert Males have pointed out that this appears to be a  breach of the Solicitors Code of Conduct.

Outcome 1.8 of the Code of Conduct states that clients have the benefit of compulsory professional indemnity insurance “and you do not exclude or attempt to exclude liability below the minimum level of cover required by the SRA Indemnity Insurance Rules 2013 which require a minimum cover of £2 million for a partnership or £3 million for an incorporated firm.”

Outcomes are compulsory and are designed to achieve the principles which in this case would be:-

  • Act with integrity
  • Act in the best interest of each client
  • Behave in a way that maintains the trust the public places in you and in the provision of legal services.

I am not holding my breath that the Solicitors Regulation Authority will take any action. Of course if it was any ordinary firm of solicitors they would be down on us like a ton of bricks.









Written by kerryunderwood

October 23, 2015 at 1:02 pm

Posted in Uncategorized

16 Responses

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  2. I wonder how often they have relied upon this to limit their payout on a negligence claim? Surely no-one represented by a solicitor would let them get away with it, but an LiP might. Am happy to represent anyone affected, it would be rather fun!

    Julian Evitts (@Julestri)

    October 23, 2015 at 1:18 pm

  3. Julian

    The danger is not just that Litigants in Person will be unaware of their rights. It may be CAB advisers etc.; on fact anyone who is not a qualified solicitor familiar with the Solicitors Code of Conduct.



    October 23, 2015 at 1:25 pm

  4. so I assume you have reported them, then?

    claire hodgson

    October 23, 2015 at 1:28 pm

    • What is the point? They know about it. Need legislation not regulators. Look at all the ABS’s – what did the SRA do about any of them?



      October 23, 2015 at 1:32 pm

  5. Surely the terms is contrary to the Consumer Rights Act 2015 as an unfair contract term?


    October 23, 2015 at 2:50 pm

    • Stephane

      I would have thought so. Certainly seems to breach Solicitor’s Code of Conduct, which is more serious as quasi-criminal.



      October 23, 2015 at 2:53 pm

  6. […] DLG Legal Services and Solicitors Code of Conduct […]


  8. So Kerry if you had a client who had been dealt with in such a terrible way how would you advise them

    John fairhurst

    July 18, 2016 at 2:11 pm

    • As you will have seen from my various blogs in relation to certain insurance companies there are various different things going on and I now set out some of the scenarios:-

      1. The other side’s insurance company contacts the injured person direct and seeks to persuade them to deal direct with the insurance company themselves rather than instructing a solicitor to do so.

      There is nothing legally wrong with that approach, although most of us think it is morally and ethically wrong. As solicitors, which of course insurance companies are not and they are not governed by the Solicitors Code of Conduct, we are obliged when writing to the other party to advise them to take independent advice from a solicitor.

      In my view that should be the law for insurance companies in these circumstances. The advice to the injured person is always to see a solicitor. Virtually all solicitors dealing with this type of work do an initial free first interview and so nothing is lost.

      2. The insurer contacts the client, even though solicitors are acting.

      In my view this is far worse than scenario one and would be a serious disciplinary issue for a solicitor, but appears, remarkably, to be both legal for insurance companies and not in breach of what appears to be almost meaningless regulation of such companies. In my view it should be made a criminal offence.

      The practical advice to the client is to report the matter immediately to their own solicitors and to ask those solicitors to report the insurance company to its regulatory body and the client and solicitor should both write to their Member of Parliament and also to the local and national press. Any use of social media should also be made.

      3. The insurance company is not acting for the other side but seeks to “capture” the injured person by writing direct to them and offering to refer them to their pet panel of solicitors.

      This is less serious but the client is always best advised to choose their own solicitor and agree their own terms with that solicitor.

      4. The client/injured person has legal expenses insurance, often known as Before-the-Event insurance, and the insurance company seeks to push the client to their panel solicitors.

      This is perhaps the least objectionable of the scenarios as the individual has knowingly, normally, taken out legal expenses insurance at a low cost and must be assumed to know that “you get what you pay for”.

      The client still has full freedom of choice of solicitor but the legal expenses insurance company is free to impose reasonable terms on those solicitors.

      I say that the client knows that they have taken out such insurance.

      This used to not be the case as it was often included, supposedly at no extra cost, on for example motor insurance policies, household insurance policies etc.

      That is no longer the case as customers/clients must not be given such insurance without positively opting in, and this has led to a dramatic reduction in the number of people having Before-the-Event insurance. Also the insurers must state the cost of that apparently free insurance, and on a typical motor policy that is £60.00 or £70.00.

      5. The client has Before-the-Event insurance/legal expenses insurance and the legal expenses insurer seeks to prevent that client from instructing their own solicitors.

      This is illegal, although apparently not a criminal offence, but I will return to that point.

      The European Court of Justice, the United Kingdom’s highest court, has time and time again ruled that such conduct is unlawful and has been highly critical of it, but unfortunately insurers still try it on.

      Insurers do this generally because their panel solicitors will work for much lower rates than they would have to pay other solicitors. In my view if an insurance company knowingly states the law incorrectly in order to seek to achieve this objective then they are committing the criminal offence of obtaining a pecuniary advantage by deception.

      Again the client in those circumstances should report the matter, and get their solicitor to report the matter to all the regulatory bodies and to the police.

      6. The client has legal expenses insurance/Before-the-Event insurance and instructs the solicitors recommended by that insurance company without protest.

      There is little wrong with this, although I would prefer there to be a law that the insurer in those circumstances must point out to the client/injured person that they have freedom of choice of solicitors.

      Having said that a person who knowingly takes out obviously cheap legal expenses insurance and then, without protest, goes to the solicitors recommended by those insurers has little ground for complaint. Adults of full capacity must be assumed to know what they are doing.



      July 26, 2016 at 2:11 pm

  9. Interesting post, as I am not happy with the service I have received from them and will be making a complaint. It isn’t clear from the post though, who I should complain to about the Solicitors Code of Conduct.

    However I don’t agree with your last statement. I would have expected both the insurer and solicitors to have a duty to provide a competent service in the best interest of the client regardless of whether or not they were recommended.

    I must say though that with the government changing the law to reduce the cost of whiplash claims it will be much harder for the self-employed or owner-managers of small companies to receive any fair recompense for non-fault accidents. I was off work on and off for over a month and estimate lost revenue at over £25,000 and was offered £150 loss of earnings. It is very hard to prove loss of earnings in such cases, and is made much harder when the solicitor does not provide the correct information to facilitate collecting the required proof.

    A D Woodrow

    January 29, 2017 at 5:52 pm

  10. Hello Kerry
    Just read your reply with great interest .sorry it’s been along time since I asked the question sadly I feel in to the bracket of not being aware of the legal expencies added to my home insuriance policy but knew it existed on my car insuriance as you are aware . Even the best solicitiors make mistakes and miss the obvious well as regards DLG and directline I have now rode that train to its conclusion.the end was truly disgraceful
    The professional neglect and the loss of complaints and the Undersetteled value of my claim is a joke
    Here is a riddle for you Kerry when is a insuriance company a law firm
    When it’s directline
    They choice to stop proceedings on the last day before the court hearing which I was furious about sighting that a barrister had given advice that the offer of the third party had offered was fair those enabling DLG and directline to withdraw legal funding on the eve of trial ?
    I was prevented from going to trial because I couldn’t afford the barristers or lawyers fees
    Although a judge had said in is opinion the case was worth £70.000
    It was settled for much less because of this action of DLG and directline
    Needless to say Kerry a very sad sad day
    I never thought in my life I would see such injustice
    Keep informing the masses and one day I will come to one of your gatherings if only to have a drink with you

    John fairhurst

    February 28, 2017 at 10:55 am

    • John

      Thank you for letting me know the outcome, and I am sorry to hear that.



      March 13, 2017 at 9:51 am

      • I am in the process of making a complaint the legal ombudsman in relation to DLG, I am a little deflated regarding your comments about people who use legal expense insurance, as I did, Churchill insurance appointed DLG, I asked if I could use my own and was told, possibly but DLG was very experienced in these matters and in their opinion the best firm to use, having not heard from DLG foe 4 months following their initial contact, I sent a number of emails before receiving a letter from them informing me that they beleived I did not have a case and would not be processing my claim. This was a mistake , which Churchill pointed out and made them pay me £150 comp. I asked again to change solicitor, and was told that the case was approaching a time limit and best to stay with DLG, the file was now with the correct people and I should expect no further issues. again I heard nothing for weeks, I contacted them again as we were approaching 3 years,, incredibly they asked me for all the documents I had previously sent, the medical report from the other parties cons. was sent registered mail, and signed for but still went missing, anyway realise I am long winded here, so gist is, Churchill, are direct line , the other company Prestige ( uk insurance) is also direct line, as is DLG and apparently the accountants, Toppings have some connection to Direct line. Incredibly I was never asked what my actual losses were, believing I would be having a meeting to explain, I was shocked when I received a statement to sign, claiming around 25% of my actual losses, and told I had just 24 hours to get it back to them, or run out of time, I sent them a copy of my actual losses which they did not acknowledge, they said they were limited by my injuries and medical report as to the lenfgth of time I could claim, yet they were a full 12 months out, the barrister at the hearing, advised me to settle, as an offer had made 5 months previously, DLG never informed of the offer. She said allthough it was clear DLG had got it so wrong, and even failed to reduce the claim by Tax and NI. the corrected amount was now below that of the offer! they have since offered me £200.00 in acceptance of the fact that they could have done better, they completely ignore the fact that they wrongly calculated the losses in the first place, but admit they used figures from Toppings to calculate, despite that Toppings were hired by the other side. As a non legal person, I believe it is acceptable to follow the advice of your insurer, regarding which legal firm to use, they did say they were the “best”, just failed to say who, they were best for.

        Martin Roberts

        December 12, 2019 at 11:48 am

      • Thank you for commenting. Anyone is always well-advised to carry out their own research as to the quality of any particular law firm. The best recommendation is that of existing clients of that firm.


        December 13, 2019 at 3:55 pm

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