Do I need litigation insurance?
Did you know that Ontario is considered, for lack of a better term, a “loser pay jurisdiction.” This means that the party who wins at trial can recover a portion of their legal costs from the losing party.
It is no small feat taking on an insurance company. These are billion-dollar corporations with extensive resources to fight injury claims. In recent years a new product has become available called after-the-event insurance (ATE). This coverage protects a prospective client from costs consequences up to an amount agreed upon at the outset of the claim. The policy will pay for any costs or out of pocket expenses incurred by the defendant’s counsel on behalf of the client. The policy will also cover out of pocket expenses incurred by the client’s firm as well. To be clear, the policy will cover all costs of the defendant, and the expenses of the defendant and the client’s counsel up to the policy limits. The beauty of the policy is that there is only a one-time fee premium that is payable only at the end of the litigation and only if the client recovers money in the lawsuit. Thus, it the client does not recover money from the lawsuit, ATE will pay out the expenses noted above without any cost to the client.
With respect to the fee payable, it is a small sum in comparison to the coverage. Of course, the fee is discussed with the client before executing any documentation.
At my firm, we make the ATE available to all our clients for their consideration. Most of my clients accept the insurance as they appreciate the level of protection it affords them given the current climate in the personal injury field.