Analyses: Legal Protection Insurance in the Context of Liability Insurance: Possible Solutions in English Law?

• Jurisdiction: South Africa
• Published date: 25 May 2019
• Date: 25 May 2019
• Pages: 464-475
• Author: Wenette Jacobs

Legal Protection Insurance in the Context of

Liability Insurance: Possible Solutions in

English Law?

WENETTE JACOBS

University of South Africa

1 Introduction

Liability insurance policies in South Africa generally include the insurer’s

contractual duty to indemnify the insured under the insurance contract, and

the insurer’s contractual right to conduct the insured’s defence against the

third-party plaintiff, or to negotiate a settlement on behalf of the insured with

the third party in the name of the insured. (See JP van Niekerk ‘Liability

Insurance: Successive but Overlapping ‘claims-made’ Policies and a Question

of Quantum’ (2006) 18 SA Merc LJ 382 (‘Van Niekerk Liability Insurance’) at

382–3 where he comments on the complex multiple relationships involved in

liability insurance; and see in general as regards South African law on liability

insurance, MFB Reinecke, Schalk Van der Merwe, JP van Niekerk & Peter

Havenga General Principles of Insurance Law (2002) (‘Reinecke et al’)

¶¶ 9–10, 12, 53, 55, 63, 75, 77, 79, 100, 129, 299–380, 398, 451 and 582;

Norman Atkins Are You Covered? A South African Guide to Short-term

Insurance (1984) (‘Atkins’) 105–13; N Benetton The South African Guide to

Short-term Insurance (loose-leaf) (‘Benetton’) at 3-60–7; Gordon and Getz on

The South African Law of Insurance 4 ed (1997) by DM Davis (‘Gordon and

Getz’) at 482–3; and Wenette Jacobs ‘Liability Insurance in a Nutshell:

Simplif‌ied Complexities or Complex Simplicities?’(2009) 21 SA Merc LJ 202

(‘Jacobs’).)

The rise of consumer awareness promoted, for example, by the Consumer

Protection Act 68 of 2008 which was implemented recently, and a growing

‘claims culture’ add to the expanding importance of liability insurance. As its

importance increases, so does the need for legal protection (or ‘legal

expenses’) insurance. This may be explained by the fact that liability

insurance which provides cover against an insured’s legal liability towards

third parties almost invariably involves legal proceedings that are accompa-

nied by legal costs and expenses.

Most of the text books on South African insurance law do not yet cover

legal protection insurance or address it in passing only (see, for example,

Benetton at 3-64; and Atkins at 113 for brief references to legal costs and

expenses in liability insurance). In other legal systems, legal expenses

insurance has received close attention in the scholarly literature (see, in

English law, eg, MacGillivray on Insurance Law Relating to all other Risks

than Marine 11 ed (2008) by Nicholas Legh-Jones (gen ed), & John Birds &

464

(2011) 23 SA Merc LJ 464

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