Freedom Of Choice

Litigation can be expensive. Many litigants are increasingly turning to legal expenses insurance to fund their legal costs. In the case of Sneller v DAS (C442/12) the Court of Justice of the European Union ("CJEU") has given a preliminary ruling on an insured's right to choose a lawyer under a legal expenses insurance policy.

Facts:

Mr Sneller was dismissed from his job and sought to raise an unfair dismissal claim against his employer using his DAS legal expenses insurance. He wanted to instruct a lawyer of his own choosing, but DAS preferred to keep the matter in-house. The insurance contract provided that DAS's own staff would deal with cases unless DAS decided that the matter should be delegated to external lawyers. Mr Sneller brought a claim against DAS to try to force it to indemnify him in relation to the costs of using his chosen lawyer to pursue his claim.

Decision:

The Netherlands Supreme Court referred Mr Sneller's claim to the CJEU. The CJEU had to consider the terms of Council Directive 87/344/EEC on the coordination of laws, regulations and administrative provisions relating to legal expenses insurance.

The CJEU decided that the contractual requirement that only an insurer could decide if external lawyers were to be instructed or not was too restrictive on the insured and therefore incompatible with the Directive. They held that a Claimant's freedom to choose a lawyer should not be dependent upon an insurer's view on whether it is necessary to instruct lawyers.

However, the CJEU noted that...