Defence panel solicitor

Category: Claims and policy principles · Reviewed by the Apex broking team · Last reviewed 2026-08-22 · ~4 min read

Definition

Liability policies — professional indemnity, public and products liability, employers’ liability, directors’ and officers’ — almost always give the insurer the right to take over and conduct the defence of a claim. In exercising it the insurer instructs a firm from its panel: a pre-agreed list of solicitors who handle that insurer’s work at negotiated rates under a service agreement. The panel firm is instructed by the insurer, but its client for professional purposes is normally the insured, which is why conflicts arise and are managed formally.

Where the insurer’s right comes from

It comes from the wording, not from the general law. The relevant clauses are the claims control clause, which gives the insurer conduct of the defence and settlement, and the claims cooperation clause, which obliges the insured to assist. Between them they mean the insured does not run its own defence at the insurer’s expense. Whether the insured may settle, admit liability or instruct anyone independently is a matter of what those clauses say.

The limited right to choose your own lawyer

Policyholders frequently believe they have a legal right to choose their own solicitor. That right exists, but in a different product. The Insurance Companies (Legal Expenses Insurance) Regulations 1990 provide at regulation 6 that where under a legal expenses insurance contract “recourse is had to a lawyer… to defend, represent or serve the interests of the insured in any inquiry or proceedings, the insured shall be free to choose that lawyer”, and also free to choose one “whenever a conflict of interests arises”. The application provisions carve out activities carried out by an insurer providing civil liability cover where it defends or represents the insured and simultaneously serves its own interest. So on a professional indemnity or public liability policy, the regulation-6 freedom does not apply; on a standalone legal expenses policy it does.

Where an insured can still influence the choice

Three routes are available in practice. First, negotiation at placement or renewal: many PI wordings will accept a named firm on the panel, or a bespoke arrangement, if it is raised before inception rather than after a claim. Second, the conflict route: where the insurer reserves rights or the interests of insurer and insured genuinely diverge, separate representation for the insured is often appropriate and sometimes agreed. Third, consent-based wordings: some policies require the insurer’s consent to the insured’s choice, with consent not to be unreasonably withheld, which is a real, if softer, right.

Why panel rates matter

Panel firms act at rates below their commercial rates. That has two consequences for the insured. It preserves the limit of indemnity, because on most professional indemnity policies defence costs erode the limit — every pound of defence spend is a pound less available for damages, which is the point covered under defence costs inside vs outside the limit. And it constrains the alternative: an insured who insists on its own firm will often be asked to fund the difference between that firm’s rates and panel rates, so the practical choice is rarely free.

Working with a panel firm

The relationship works best when the insured treats the panel firm as its own lawyers, because for most purposes they are. That means giving full and early disclosure, including documents that are unhelpful; being clear about commercial sensitivities such as an ongoing client relationship with the claimant; and raising concerns about strategy through the broker and the insurer rather than unilaterally. Where the insured wants its usual commercial solicitors involved for context, that is often accommodated at the insured’s own cost alongside the panel firm.

Why it matters

Panel appointment is the point at which a policyholder discovers how much control it has actually bought. The time to shape that is at renewal — asking who the panel firms are for your sector, whether a named firm can be agreed, what happens on a reservation of rights, and whether consent to an alternative is qualified by reasonableness.

Frequently asked questions

Can I insist on using my own solicitor under my liability policy?

Usually not. The claims control clause gives the insurer conduct of the defence and the right to appoint. The statutory freedom to choose a lawyer sits in the legal expenses insurance regulations, which carve out civil liability insurers defending the insured where doing so also serves the insurer’s own interest.

Who is the panel firm’s client — me or the insurer?

The panel firm is instructed by the insurer but normally acts for the insured in the proceedings. Where the interests of insured and insurer diverge, that is a conflict to be addressed openly, and separate representation may be appropriate.

Why do panel rates matter to me if the insurer is paying?

Because on most professional indemnity policies defence costs come out of the limit of indemnity. Lower rates leave more of the limit available to meet the claim itself.

Related entries

• Claims control clause
• Claims cooperation clause
• Defence costs inside vs outside the limit
• Insurer’s panel adjuster
• Expert witness

This entry is part of the Apex Insurance Wiki. Last reviewed 2026-08-22. Next review: 2027-02-22. It is general insurance information, not legal advice, and it describes UK market practice and law as at August 2026.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.