Hi Finny,
I suppose the first thing is not to worry, as Brendan has said.
The legal proceedings will (with some very limited exceptions) always be against the driver and possibly the owner of the motor vehicle. The insurer solicitor is keeping you advised of the situation and just wants to be sure that you/driver are on board. There would not be much point in solicitor filing the Defence if you did not agree with it! It is very probable that you/driver will have to swear an Affidavit confirming that whatever if in the Defence, is true. Again, whilst in theory these can worry people, in practise they shouldn't.
Given that driver accepts that he is at fault, even if the case proceeds to Court, it is unlikely that he would be giving evidence or need attend at all.