For plaintiffs who might not otherwise be able to risk an adverse costs award by going to trial, the advent of after-the-event (ATE) insurance in Ontario has levelled the playing field, Toronto personal injury lawyer Darryl Singer tells Law Times.
As the article notes, several companies in Ontario are now offering ATE insurance or indemnities that can be purchased once a case has been instigated. These products allow litigants to protect themselves from the risk of a cost order, and can also be provided as a blanket policy for a law firm that needs protection for its disbursements.
Singer explains that the importance of the product weighs in at the negotiation stage, as “cases which would not settle at mediation because the plaintiff would be intimidated by potential costs consequences now stand their ground and get the case resolved. In addition, cases that would get dropped on the eve of trial by the plaintiff can now proceed to trial.”
In a typical scenario, before companies like legal expense insurer DAS Canada and BridgePoint Indemnity Company came on the scene, Singer says the insurer, the mediator or the judge would tell clients that they might win, but if they don’t, a two-week trial could cost $100,000.
“The clients would fold like a pack of cards. This allows me as a lawyer to sit there, slap the certificate on the table, and say, ‘You don’t care if you lose and have to pay costs. Well, neither do we.’ Now the single biggest leverage they’ve got is off the table. It has taken a major weapon away from the defence side.”
Singer currently has a blanket policy that covers every personal injury file he opens.
“I pay $200 to cover up to $10,000 in disbursements with a rider that allows me to increase coverage to $50,000 without any review. If I decide that I am going to trial in a couple of weeks and the $50,000 is not enough, I can increase it to $100,000 or higher,” says Singer, who has chosen to use the indemnity product from BridgePoint.
Singer tells Law Times that he knows of firms with a higher blanket policy. “My practice has a high volume of small files. Some firms have blanket coverage of $50,000 to $60,000.”
The indemnity covers adverse costs, including defence legal fees and the plaintiff lawyers’ disbursements, but not the plaintiff lawyer’s legal fees.