stuballs

I would do two things:

1. Demand to speak to a manager because you want to start a formal complaints procedure if they still refuse to honour your legal cover. Tell them that you are considering complaining to to the financial Ombudsman but want to try to resolve it with them first. You will probably have to write a letter outlining your discontent. They will reply to your letter and if it's not good news then take it up with the Ombudsman. From the clause you posted above it looks like they really do only cover your defence. so if you have a claim against a third party you have to use your own solicitor. What would normally have happened here is that her claim against you and your claim against her would have been handled at the same time by the same solicitors and an agreement would have been reached. But as your insurer just paid her and left you hanging out to dry it's probably up to you to use your own solicitor. But fear not. You're not out yet...

2. Talk to White Dalton as fubber suggests. They are excellent. They may even work on a "Conditional Fee Agreement" (CFA) which is also sometimes known as a "no win no fee". These arrangements get a bad name becasue of all the ambulance chasers out there. But they are a good way of making a claim if you don't want to end up with a lawyers bill you can't afford if the claim goes wrong (which I don't think this one would). They can explain to you how it would work as there are many different varieties. I really think you will get something if you make a claim.

Another option would be to make a claim yourself. Get her details and write a "letter of claim". This is the first stage in the civil litigation process and does not necessarily have to be written by a lawyer. You will probably find templates online. Be warned. The stage after the latter of claim if you don't get a positive response is filing a claim with the court (probably small claims court as below £5k). This requires some knowledge and will cost around £100 to file the claim at your local County Court. There are excellent guides for private individuals to do this themsleves as the courts are keen to make the litigation process simpler for the man on the street. Have a look at http://www.justice.gov.uk/index.htm if you are keen on doing this. Specifically look here: http://www.justice.gov.uk/civil/proc...ic.htm#IDADXOQ You will find everything you need to make a claim yourself.