Legal Expenses Insurance as a tool for Citizen Empowerment

Legal Expenses Insurances (LEIs) are among the tools experienced in many countries to increase citizens' access to justice; however, Iran is one of the countries without such experience. LEI means the arrangements that distribute the risk of failure in judicial cases.  LEI  transfers the costs of litigation, administration of case and enforcement of the judgment from citizen who is involved in the proceedings, and therefor makes it an option for citizen to go to court. In a such way financial obstacles are removed from the citizen's litigationproject.
This article is a comparative library study using descriptive and legal critical methods. The purpose of this study is to investigate the features of LEIs which remain unusual in Iran's legal system. This article attempts to introduce legal requirements for the formation of LEIs in Iran. For this goal,firstly we'll introduce legal expenses insurance and alternative methods that are not insurance in fact, but formulated on the basis of the distribution of heavy costs of judicial services.
Judicial cases are based on a variety of different types of risks, including speculative or pure ones; therefore, the current insurance is used to cover pure risks and not to cover cases that have a speculative risk due to the heavy costs that such files can impose on insurers. These types of insurance are also subject to 'moral hazards'. One of these hazards is the purchase of a policy for an existing conflict, or raising the risk of conflict by citizens who have bought a policy. Insurers, of course, are also in charge of the growth of false claims, but foreign experiences show that failure in insured demands is not more than the other demands. In other words, the growth of existing cases for the growth of insurance represents an increase in access to justice, not the abuse of the possibility created by insurance.
The review of this article shows that the non-transparent and unregulated market of lawyering services is a huge obstacle to the growth of LEIs in Iran. The prevalence of LEIs needs regulating the market of lawyering. In countries where the market is free, these insurance policies have not been redeemed. At the same time, it should be noted that lawyering services in Iran are offered in a free market in spite of the monopoly of bars. The supply side of the market is monopolized; therefore, the market formed in Iran around the lawyering is not really free, and it still offers free pricing for the monopolized side. However, it is one of the market failures in which the intervention of government is justified. In the United States of America, lawyering services cost hourly by convention, but in Iran, we do not have even this level of regulation. In such situation, insurer can't assesses the risk and therefor pricing of these policies become impossible. This major weakness is the main obstacle to the spread of legal expenses insurance in Iran.
This article briefly presents the alternatives designed in the literature as the legal expenses insurance. Such methods are not necessarily insurance, because of the underlying element of insurance, that is, the distribution of risks, but these tools just make it easy to pay the costs of the proceeding. These include: "group buying of lawyering services", "helping employees by employers and with facilities available to businesses," "Founding the claim by bank loans," and "After the Event Insurance." Of these, after the event, could means knowing the insurance. These insurance products are sold after a lawsuit and are priced higher, because they cover the larger risk.
In this paper, the merits and demerits of LEIs from the perspective of legal empowerment are also examined. In addition to being able to increase citizens' domination over their lives, legal insurance is able to reduce their domination on their cases. LEIs may not reduce the domination of customer or opt-out him from choosing appropriate services. Such actions may be imposed on the insured as a contractual term and force him to choose a lawyer, strategy for the court, or anything else that reduces the degree of autonomy of the insured party. Therefore, we need regulation-making for such situations.