Money: Where going to court costs not a sausage: The Germans have ways of making legal action less painful, reports Iain Jenkins

Had Gillian Taylforth been German she would not be facing financial ruin. Instead, an insurance company would have picked up her pounds 500,000 bill for the libel case that was lost by the EastEnders actress.

Recently a television presenter, Birgit Schrowange, took a number of German newspapers to court over allegations that she was a lesbian. The case even involved a video, similar to the one of Ms Taylforth playing with a sausage which is deemed to have destroyed the EastEnder's case.

Where the two cases differed markedly is that Ms Schrowange was not paying for her expensive lawyers. Her legal bill was picked up by an insurance company as she, like nearly all Germans, had a legal insurance policy.

Reg Brown, head of R Brown, the Lloyd's of London underwriters which specialise in legal insurance, said: 'In Britain Taylforth couldn't have got cover as legal expenses products are not well developed. Her case only serves as a reminder of how people can be spectacularly ruined by a court case.'

Most people will draw the conclusion from the Taylforth case that legal action, even to protect their rights, leaves too much to chance. After all, is it worth paying a solicitor pounds 120 an hour and still risk having to pay someone else's costs?

Most people who have paid for a holiday that promises a 'sea view' but discover that they need binoculars to catch a glimpse of the ocean decide that legal action is more trouble than it is worth.

'People won't take anything to court if there is any uncertainty,' says Steve Jones, marketing manager of Bristol-based DAS, whose parent company is in Munich.

'They are terrified of being liable for someone else's costs if they lose. As a result they often fail to protect their legal rights.'

Legal insurance in Germany is big business, making up almost 5 per cent of the non-life market, and the industry has been accused of clogging up the courts with frivolous cases.

More than 6 million people now have legal insurance in Britain. Most of it is fairly rudimentary, accompanying household insurance.

It can cost from pounds 8 for simple personal injury protection up to pounds 15, which will cover anything from unfair dismissal to payment of a full salary if someone is called up for jury service on a long case.

This kind of 'add-on' policy is offered by DAS, Hambro Legal Protection and CareAssist, a subsidiary of Royal Insurance. Many people are not aware that they have this cover as it is often tucked away in the small print of a policy.

Only Legal Protection Group, a subsidiary of Sun Alliance, offers 'stand alone' legal expenses cover. It is a much more comprehensive policy with fewer conditions, but it is also more expensive.

Other firms have offered 'stand alone' cover but pulled out after huge losses. 'Initially legal insurance attracted a disproportionate number of people who were highly litigious or who faced legal action,' says James Painter, of Legal Protection Group.

As a result tough conditions have been imposed and the small print should be read carefully. For example, it often does not cover criminal cases and the first 10 per cent of costs are paid by the individual.

Furthermore, legal proceedings will start only if there is 'a reasonable prospect' of winning a case. This decision is made by the insurance companies, and there is a suspicion that they will be unnecessarily cautious in assessing cases.

This charge is fiercely denied by Martin Wiggins, manager of Hambro Legal Protection. 'For us reasonable prospect is not necessarily when our client has only a 50-50 chance of winning,' he says.

'Sometimes we will go ahead and pay for legal action if our client has a much slimmer chance.'

(Photograph omitted)