The Non Banking Financial Institutions Regulatory Authority (NBIFIRA) has been accused of favoring Legal Guard, a subsidiary of insurance giant Botswana Insurance Holding Limited (BIHL) in its dispute with a client over claims for legal cover. NBFIRA stands accused of failing to take action against Legal Guard, BIHL’s short term legal insurance division, after the client reported the short term legal insurance company for failing to provide him with appropriate legal expenses cover.
The client, Kathata Setshwantsho said in an interview that he wrote to the Regulator, NBIFIRA requesting it to investigate the conduct of Legal Guard and its attorneys. In his letter dated 24 March 2014, addressed to NBIFIRA, Setshwantsho states that he holds a policy with Legal Guard and in 2013 he submitted a claim for assistance in litigation with a third party and they referred him to an external attorney.
“I had to terminate the external attorney’s services because of her unethical conduct. I later requested Legal Guard to avail me her billing statement because there were some fraudulent documents that she filed with the court that I did not want to be part of the billing,” he said.
However, in a response letter dated March 4th 2014, Legal Guard’s legal advisor, a certain Ramatebele notified Setshwantsho that they could not provide him with the attorney’s billing statement as the information was privileged. This prompted Setshwantsho to seek advice from NBFIRA. He wondered how a client would know if he or she had exhausted his or her cover if he or she is not availed a billing statement.
“Is this a normal procedure? Who is the information privileged from? Am I not the client? That is the question I want answers to,” he said.
In another letter dated 19 March 2014, written by Legal Service Manager Allan Manyeneng, Legal Guard informed Setshwantsho that: “after careful analysis of your matter, which was handled by attorneys we appointed on your behalf who eventually withdrew as attorney of record, it became apparent that there was a need for us to afford you an opportunity to appoint your own attorney to deal with matter.”
The letter also states in part that: “Due to limitation of cover in your policy, we have taken the decision to cover your matter at a rate of P750 per month. Note that should your appointed attorney’s rate exceed the amount stated above you will be liable for the difference.”
In response, Setshwantsho reminded Legal Guard of a clause in his policy that states that the legal insurer will pay up to P100, 000 in respect of his valid case. The clause also states that Setshwantsho will be liable for the difference if the legal expenses exceed P100, 000.
“Because of your incompetence you have precariously and perilously put my matter in jeopardy of being dismissed and that is prejudicial to me. As such I have lost all faith and trust in you and this is no wonder that I have seen and heard people dejected and disgruntled about your services,” said Setshwantsho in his letter to Legal Guard.
He further revealed that his case was struck out of the roll on 27 June 2014 because of failure to attend hearing by the attorney that Legal Guard had instructed to represent him.
“But you never took action to see that the case was reinstated until I made the application myself. This makes you liable for neglect and be informed that I will use all avenues available to me for seek redress,” said Setshwantsho.
Approached for comment, NBFIRA’s spokesperson Tapologo Kwapa accused Setshwantsho of failing to exhaust available channels in handling the matter before he could take up the matter with the Regulator.
“We understand that Legal Guard was still willing to engage him on the matter but he decided to approach us before he could exhaust all the channels,” he said.
Responding to Sunday Standard queries, Legal Service Manager at Legal Guard, Allan Manyeneng said they usually engage other attorneys to investigate cases in which a client lodges a complaint relating to the conduct of appointed attorneys.
“In this case, upon assessment of the complaints and response from the attorneys, it became apparent that the client-attorney relationship had ended. We thus saw it fit, and in the best interest of our client, to have his matter re-directed to a different attorney,” he said.
During the material time, Manyeneng said, their agreement with the attorneys they engaged to assist their clients was through a Retainer Fee Model.
“This means that our attorneys handled various matters for our clients during the month and were remunerated at an agreed fee on a monthly basis ÔÇô thus a Retainer Model. Due to the nature of a retainer model, it was not possible for us to produce a billing statement that concerned a particular client because such model encompasses all clients served by a law firm on behalf of Legal Guard per month,” he said.
Manyeneng added: “We can confirm that the sum insured in the client’s policy is P100 000. However we wish to add a clarification with regards to the information proffered from client regarding the P750 per month mentioned and state that this is incorrect. When client approached us requesting permission to have his matter handled by his own personal attorneys, permission was granted.”
He added that Legal Guard went out of its way, not only to let client utilise his own personal attorney, but also to negotiate payment cover with the said attorneys at the rate agreed with them.
“In the ordinary cause of business, Legal Guard would go out to negotiate fees on behalf of each client with the attorneys appointed. And in this particular case there was no exception. We confirm that Mr. Setshwantsho’s appointed attorneys were paid the full amount for the services rendered,” said Manyeneng.
He explained that the issue in this particular matter was not how much Legal Guard expended against the client’s entitlement, but rather, an issue of the position of the law, which precluded the case from proceeding as advised by the attorneys. He further said that Setshwantsho should have talked to Legal Guard first to address issues related to their services, saying the legal insurer has a highly competent client services team which can assist all of its clients.
“In instances where a client wishes to speak to a supervisor concerning their matter, this is also a viable course of action. We are better positioned to help resolve challenges, as for instance in this occasion where we assisted client in identifying an attorney he was comfortable with. We further ensured that the client continued to receive the value of legal services that their policy covered,” said Manyeneng.
He said clients who are not happy after exhausting all avenues at Legal Guard may raise their complaint with NBFIRA which is their regulatory body. Similarly, Manyeneng said, clients also have an opportunity to complain to the Law Society pertaining to the conduct of the attorneys.