Adverse Cost Insurance

Transcription

1 Adverse Cost Insurance Susan Gunter Dutton Brock LLP Naomi Horrox LSUC Ian Hu LAWPRO Rikin Mozaria McLeish Orlando LLP Oatley McLeish Guide 2017 March 30, 2017

2 What is Adverse Cost Insurance?

3 Nature of the Coverage

4 Types of Providers & Regulation

5 How the purchase works Information provided to client Information provided to insurer Documents/contract Premium payable at successful outcome (settlement or judgment)

6 New Relationships Lawyer Client Insurer

7 How much is enough?

8 Do I need to disclose client s adverse cost insurance policy?

9 Rule 30.02(3) A party shall disclose and produce for inspection any insurance policy under which an insurer may be liable, (a) to satisfy all or part of a judgment in the action; or (b) to indemnify or reimburse a party for money paid in satisfaction of all or part of the judgment, but no information concerning the insurance policy is admissible in evidence unless it is relevant to an issue in the action.

10 Disclosing the Agreements Abu Hamid v Napar (2016), ONSC 2384 Cobb v. Long Estate (2015), ONSC 7373 Fleming v. Brown (2016), ONSC

11 Delayed Disclosure Late disclosure of the existence of an adverse costs protection plan was taken into account in dismissing a plaintiff s cross motion to vary a costs order Stamp v Sun Life Assurance [2015], OJ No 2324

12 How a claim works

13 Exclusions that may apply Fails to accept settlement recommendation Changes counsel without insurer s consent Self represented Fails to attend a defence medical examination Fails to advise of adverse costs award within 15 days Plaintiff s counsel s opinion that the case is more likely to fail than succeed Misleads insurer Fails to instruct counsel

14 Is adverse cost insurance adequate Shah v Loblaw (2015), ONSC 5987 Alary v Brown (2015), ONSC 3021 Yazdani v Ezzati (2015), ONSC 7262 security for costs? Markovic v Richards (2015), ONSC 6983 Foster v Durkin 2016 ONSC 684 Grotz v Ontario Inc ONSC 2688

15 Is the premium a recoverable disbursement? Adverse costs insurance policy (or After The Event) is not an assessable disbursement to be paid by the defendant Markovic v Richards (2015), ONSC 6983 Followed in: Foster v. Durkin 2016 ONSC 684

16 Not a recoverable disbursement Milanetti J: Existence of the policy may well provide comfort to the plaintiff, it is however an expense that is entirely discretionary, does nothing to advance the litigation, and may in fact even act as a disincentive to thoughtful, well reasoned resolution of claims Markovic v Richards (2015), ONSC 6983

17 What should you discuss with your client?

18 Relevant Facts for Purchasing Coverage Liability chances of success Damages assessment value Plaintiff s personal assets Number of defence counsel Litigation guardian Options on the market various products offered

19 Who is your client? Failing to instruct counsel Client wants a trial, lawyer advises settle, policy cancelled Change of counsel without insurer s consent Plaintiff becomes self represented Insurer can tell the client to the instruct the lawyer

20 Confidentiality Contract agrees to disclose client s information to insurer (facts, instructions) Material misrepresentation voids the policy What if client instructs the lawyer not to disclose fact to insurer?

21 Is there a Conflict of Interest?

22 Possible Conflicts of Interest Exclusivity provisions only referring to one insurer Global firm policy with standard premium per file (doesn t consider liability slam dunk files) Managing a difficult client can become worse disagreement with client; opinion of better than 50% chance of success Disincentive for lawyer to increase disbursements in meritless case

23 How does adverse costs insurance affect the courts? Pre trial conference with adverse costs Should the adverse costs insurance claims handler be in attendance at the pre trial? Disbursement only policy forcing cases to verdict? Are lawyers assessments being affected by the need to recommend a 50% chance of victory?

24 What s the Standard of Care?

25 Industry in Developing Phase