The Productivity Commission wants to know if insurers are prepared to write legal expenses insurance (LEI).

The commission has investigated LEI during its inquiry into access to justice, and says it might improve middle income-earners’ access to legal representation.

LEI is common in Europe, where it is often an add-on to home and contents or motor policies.

Policies typically cover legal costs for civil matters such as employment, tenancy, neighbourhood disputes and some driving offences, but not family law. 

Adverse selection, uncertainty over legal costs, lack of knowledge about risk and a lack of appetite for the product may be challenges to its introduction, the commission’s 891-page draft report says.

“Whether there is a viable market for LEI in Australia is largely up to the insurance market to decide.”

The commission has asked for feedback on whether insurers are interested in providing the cover and whether there are any laws or regulations preventing them from doing so.

The Law Foundation of NSW and GIO operated a scheme between 1987 and 1995 but it was not viable. The report says better information is now available for calculating premiums.

The previous federal government ordered the inquiry to address “widespread concerns that Australia’s civil justice system is too slow, too expensive and too adversarial”.

The commission will deliver its final report in September.