Court cases and high solicitor fees make legal expenses insurance a precaution worth taking for tradespeople.
No self-employed tradesperson sets out in business thinking they will end up in court to defend their interests. But it happens – sometimes for reasons you can’t envisage or even understand.
Contract disputes and debt recovery are common arguments to take the form of legal action, but health and safety failings or personal injury which a tradesperson is held responsible for are also risks that can easily end in legal proceedings.
Of the circa 1.4 million cases and petitions brought to the county courts every year in the UK, somewhere between 40,000 and 50,000 require a hearing. In the vast majority of cases, the court finds in favour of the claimant without a hearing because the defendants don’t end up representing themselves.
Apparently, small claims hearings for under £10,000 in England and Wales take 31 weeks on average to settle. For anything over £10,000, you’re looking at just over a year. If you’re a busy tradesman, for example, who is trying to fit in your usual workload and pay your way it’s the last thing you want to be involved in.
But sadly sometimes things go wrong, even with the most professional approach to work. When they do, and you feel you have to defend your position, then the legal process can be the only course of action. The same goes for when you’re owed money – you might need to defend your interests with the force of legal action.
When it comes to small claims, tradespeople do often defend themselves, although judging by the above statistics they don’t follow through very often. When the claim is more substantial, rarely is it wise to defend without a solicitor acting on your behalf. If you dispute a personal injury claim against you, either because you do not believe you’re responsible or the claim is too high, then representing yourself in court is considered a risk.
So, like it or not, if your decision to is to fight a claim against you or take an issue to court to recover payment then you are faced with legal expenses – almost certainly a new overhead that you didn’t see coming.
It’s worth looking at the Government guidelines for the hourly rates for solicitors in court cases. It makes frightening reading. In London, experienced solicitors are roughly between £300 to £400 per hour, and nationally around the £200 mark. The least experienced solicitors are still over £200 in London and over £140 nationally. Take a moment to think about the time involved in preparing a case and perhaps even going to court, and the issue of legal fees become very real indeed, however strongly you feel about being in the right.
But if that is what you are – right – and your reputation and your financial future might depend on proving it, well then it is a moment of truth. You dig into your savings and hope that the other side will back off or gamble on winning in court and being awarded the legal costs too.
Or you relax, and congratulate yourself for having taken out a tradesman insurance policy. Thousands of tradespeople now buy legal expenses insurance as protection which they see as a ‘must have’ because their work exposes them to many different risks that can result in legal proceedings.
At the end of the day, it’s tough enough running your own show and doing all the work yourself. But to go about that knowing if you need a solicitor, they are a phone call away and you are covered for their costs, means you have one less thing to worry about.
Rhino Trade Insurance provides a range of tradesman insurances to protect self-employed and small business owners against uncertainty and risk – from legal expenses insurance to tax enquiry insurance and tool insurance.