Kerry Underwood


with 8 comments

In Massar v DAS Nederlandse Rechtsbijstand Verzekeringsmaatschappij NV (Case C-460/14) and Buyuktipi v Achmea Schadeverzekeringen NV and Stichting Achmea Rechtsbijstand (Case C-5/15) (7 April 2016)


the European Court of Justice on questions referred by the courts of the Netherlands provided guidance on the proper construction of “inquiry” in Article 4(1) of Council Directive 87/344/EEC on the co-ordination of laws, regulations and administrative provisions relating to legal expenses insurance.

The 11th recital of the directive states that:-

“…the interest of persons having legal expenses cover means that the insured person must be able to choose a lawyer or other person appropriately qualified according to national law in any inquiry or proceedings and whenever a conflict of interests arises”.

Article 2(1) reads:-

“This Directive shall apply to legal expenses insurance. Such consists in undertaking, against the payment of a premium, to bear the costs of legal proceedings and to provide other services directly linked to insurance cover, in particular with a view to:

–              securing compensation for the loss, damage or injury suffered by the insured person, by settlement out of court or through civil or criminal proceedings,

–              defending or representing the insured person in civil, criminal, administrative or other proceedings or in respect of any claim made against him.”

Article 4(1) provides:-

“1.          Any contract of legal expenses insurance shall expressly recognize that:

  • where recourse is had to a lawyer or other person appropriately qualified according to national law in order to defend, represent or serve the interests of the insured person in any inquiry or proceedings, that insured person shall be free to choose such lawyer or other person;
  • the insured person shall be free to choose a lawyer or, if he so prefers and to the extent that national law so permits, any other appropriately qualified person, to serve his interests whenever a conflict of interests arises.”

In the first case, the insured asked his insurer (DAS) to cover his lawyer’s costs relating to a procedure in which his employer sought authorization from a public body to make him redundant. DAS refused, arguing that the procedure was not an “inquiry” or “proceedings”.

The ECJ concluded that “inquiry” includes a procedure at the end of which a public body authorizes an employer to dismiss an employee.

“Inquiry” must be read in opposition to “proceedings”.

Attempting to limit the scope of “inquiry” to legal proceedings before a court would deprive the term of its meaning.

When interpreting EU law, it is necessary to consider its context and objectives. The general scope and “obligatory nature” of the insured’s right to choose his lawyer militate against a restrictive interpretation.

The ECJ also said that the Directive did not distinguish between the preparatory stage and the decision-making stage of the inquiry and the definition of “inquiry” covers both stages.

The ECJ referred to its previous decision in Sneller (C) – 442/12,EU:C:2013:717 and confirmed its decision there, that is that the exercise by the insured person of the right to choose his or her representative does not rule out the insurer restricting the costs to be paid to that representative.

Adopting the same reasoning, in the second judgment, the ECJ held that “inquiry” covered the “objection stage” before a body responsible for authorizing medical care requests, which allows unsuccessful applicants to seek a review.

It was “indisputable that the insured person has need of legal protection during a procedure that constitutes the indispensable preliminary stage for the bringing of an action before the administrative court”.

Although the decisions relate to the procedure in the Netherlands, nevertheless it is clear that the European Court of Justice has ruled that it is obligatory for a client to have the right to choose a lawyer and that the ECJ will protect the interest of the insured.

Given the facts of these cases it is now impossible for Before-the-Event insurers to argue successfully that in the United Kingdom the right to choose a lawyer only arises once proceedings are issued.

In portal cases very clearly the right arises as soon as a Claim Notification Form is lodged on the portal and that right covers all work done in “the preparatory stage” and that must include attending the client and taking instructions.

Thus in portal cases at least any person living in England and Wales with BTE insurance has an absolute and unqualified right to choose a solicitor under that BTE policy.

No ifs, no buts.


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Written by kerryunderwood

May 17, 2016 at 9:56 am

Posted in Uncategorized

8 Responses

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  1. Hallelujah. Maybe.

    But as I know, BTE may mean nothing more than cover for disbursements, if that.



    May 17, 2016 at 10:09 am

  2. But if that is the case it still helps. These are key decisions.


    May 17, 2016 at 10:51 am

  3. Hello Kerry very interesting read yet again I do like your posts unfortunitly the insuriance company’s even when in writing about this subject is agreed they still stick to there side and will not stand bye all of this would like more information on this as I feel a fight in the near future Kerry what is your opinion on a law firm that made a misrepresentation to get there client to sign a conditional fee agreement knowing that there client had already legal expenses cover but choose to not disclose that fact to the client for some months on by mistake hmmm

    John fairhurst

    May 17, 2016 at 9:18 pm

  4. These are decisions of the European Court of Justice, the highest court as far as UK law is concerned. If solicitors have not got the guts to take on insurance companies then they should not be practising.


    May 17, 2016 at 10:13 pm

  5. Hi Kerry. Much as I would like you to be right, I just don’t see how your conclusion follows from what precedes it. The types of “inquiry” that you refer to lead, eventually, to a hearing of some sort. The portal does not inexorably lead to a hearing, and stages 1 and 2 are obviously easily separated from stage 3 which clearly would constitute ‘proceedings’. I’m not entirely sure that you believe that your conclusion follows either, as opposed to wanting this to be tested so that we can have a decison that is actually directly on the point?

    Paul Davis

    May 18, 2016 at 11:30 am

    • Could not be clearer. Inquiry OR proceedings. Disjunctive. Does not need to be any prospect of proceedings. I am 100% certain and I find it offensive that you think that I am lying.

      Tested- what on earth do you mean? These are decisions of the UK’s highest court.

      I have never lost on this point, but then I am prepared to take any of my cases to the European Court of Justice. I suspect you are not.

      This is one of the most ill-informed comments that has ever been posted on any of my blogs- and as the old saying goes that is against some pretty stiff opposition.

      I am afraid that is the major problem with many claimant personal injury lawyers- they seem frightened of going to court.



      May 18, 2016 at 8:44 pm

  6. A couple of years back, I persuaded a BTE insurer to reverse a refusal to instruct me, in what is an Untraced case (and so as such never could be the subject of any proceedings). It’s my view that this problem, which goes back many years, is caused simply by a poor English version translation of the relevant European provision, hence the word “inquiry” popped up in the English language version. (Lawyers are all very familiar with what is generally indicated, in modern English, by an “Inquiry”; it would be baffling to suggest any ATE insurer would offer to pay costs of representation that sort of “inquiry” – as of the population, what percentage is ever likely to be remotely in need of legal representation in such) and so the word “inquiry” clearly can’t mean that, but then what?

    I pointed out that the French version has the term “procedure administrative” which is obviously “administrative procedure”; the German version has “Verwaltungsverfahren” which translates as “administrative procedures”; and the Polish version uses “Dochodzenie” which has the principal meaning in Polish of “investigation”.
    I went on to make the point that in the 2014 European Court decision in Damijan Vnuk –v- Zavarovalnica Triglav d.d., a purely literal interpretation of one or more language versions of a multilingual text of European Union law, to the exclusion of the others, cannot prevail since the uniform application of European Union rules requires that they be interpreted, inter alia, in the light of the versions drawn up in all the languages (see, to that effect, Jany and Others, C-268/99, EU:C:2001:616, paragraph 47 and the case-law cited, and Commission v Spain, C-189/11, EU:C:2013:587, paragraph 56 and the case-law cited). Where there is divergence between the language versions of a European Union text, the provision in question must be interpreted by reference to the general scheme and purpose of the rules of which it forms part. Therefore I argued that it is not permissible to isolate the English version “any inquiry or proceedings” and ignore the other versions, as doing so would create a fundamental restriction in the English version which does not exist in other versions.

    I closed by referring them to Brown – Quinn (2) Webster Dixon LLP v (1) Equity Syndicate Management Ltd and (2) Motorplus Ltd [2012] EWCA1633 in which case the Court said in its judgment:-
    “The facts of this case have revealed that the insurers exhibit an insouciance to their obligations under the Directive and the Regulations which leaves one quite breathless”. The Regulations (and the Directive) make it entirely clear that the insured’s freedom to have the lawyer of his choice is to be expressly stated in the contract made with the insured. What the contracts in the present case provide in General Condition 2.3 is almost the opposite…”
    At Paragraph 13 the Court of Appeal said:
    “It is very difficult to view all this conduct as the conduct of a reasonable and responsible insurers…” and that it viewed the insurer’s behaviour with “distaste”.
    And lastly at Paragraph 33
    “It is quite wrong that, despite the warning shot delivered to legal expenses insurers by this court in Sarwar v Alam [2002] 1 WLR 125 para 44, insurers should many years later be issuing policies which do not comply with the Regulations, General Conditions 2.3 and 5 are in breach of the Regulations in the ways I have explained and must be either deleted or comprehensively re-drafted.”

    The BTE insurer in that case backed down, but I sadly assumed that the general try-ons to allow freedom of choice would continue unabated, and they did.

    • Ed

      Many thanks for this which I have now considered in detail and that is a very interesting point about the problem being caused by a poor English version translation of the relevant European provisions.

      I agree that BTE insurers are still trying it on but in a sense I do not blame them as it is up to claimant solicitors to challenge them and take them on.

      Like you I have never had a problem in persuading a BTE insurer to indemnify my clients, although we have never been on any BTE panel. Like you we point out the relevant cases, set out by you in your reply.

      However I am afraid that most solicitors acting for claimants in personal injury work just do what the BTE insurers tell them.

      Many claimant personal injury firms are not really litigators at all now; everything is done on paper, they do not see clients, they do not market for work and the slightest issue is sent off to counsel.

      In those circumstances it is unsurprising that insurers think they can get away with it.

      Once again, many thanks for your thoughtful and detailed comment.



      July 5, 2016 at 1:12 pm

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