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Insurance Law and the Financial Ombudsman Service

15 LEGAL EXPENSES INSURANCE DEFINITION 15.1 Legal expenses insurance, defined in FSMA 2000, 1 is a before-the-event insurance against the costs of litigation. Typically, it covers the legal expenses that a policyholder may incur in an action and for any award against him of the other party’s legal costs. It is relatively new, but increasingly used. There is little case law on the topic, other than relating to the possibility under section 51 Supreme Court Act 1981 of insurers having to pay costs above policy limits, but there is no FOS material on that.

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