Litigation costs and their amounts are an important elements in an individual’s decision whether they to seek judicial protection to exercise or defend their rights. Various ways of financing litigation costs allow an individual to allocate their risk of having to cover litigation costs to other subjects that are not parties in the proceedings. An important method of covering the litigation costs is insurance for litigation costs, also called legal expenses insurance.
This master’s thesis presents litigation costs and various ways of covering litigation costs. This is followed by a presentation of the basic characteristics of insurance contracts and a discussion of legal expenses insurance as a funding mechanism, taking into consideration current regulations that are in force in the EU which are transferred into the Slovenian legal system. Then there follows a review of the case law of the Court of Justice of the European Union, which focuses on the insured's free choice of lawyer. Furthermore, this thesis discusses the right to access to court and the related institutes of legal aid and legal expenses insurance, which have an important role in facilitating such access. Emphasis is given to the mutual exclusivity of legal aid and legal expenses insurance. As examples of legal systems which take into account this exclusivity of legal aid and legal expenses insurance, the Swedish and the Norwegian systems are presented. The last part of the thesis consists of an overview of the legal expenses insurance offered by one of the insurance companies in Slovenia.
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