Canadian Lawyer

w w w . c a n a d i a n l a w y e r m a g . c o m O C T O B E R 2 0 1 8 45 O nly around for the last decade, the standards for how adverse cost insurance is used are still being ironed out in the courts, with ambiguity over its status as a disbursement and the requirement to produce it in discovery. And with some policies requiring litiga- tion progress reports, some lawyers say the insurance can compro- mise solicitor-client privilege. Adverse cost insurance, also known as "after-the-event insurance," has two main functions, says Frank Csathy, an insurance defence litigator at Stieber Berlach LLP in Toronto. It serves to protect plaintiffs in insurance liability litigation against a costs award and protect the lawyer against the cost of disbursements for things such as expert reports, private investigators or photocopying and couriers. Proponents of adverse cost insurance say it increases access to justice by allowing plaintiffs without resources to bring an action against their insurer without financial risk. David Preszler, managing partner of Preszler Law Firm LLP, who acts for plaintiffs, says it's "extremely important" to have coverage because "juries and judges are, unfortunately, fairly adverse to plaintiffs in this day and age" and are "not as receptive to making large damage awards." "It's low cost. It provides a great value and I think it's endemic in, certainly, personal injury, definitely class action law and I could see it being endemic in the commercial litigation field as well," Preszler says. James Howie, founding partner of Howie Sacks and Henry LLP, also says it is a tough time for plaintiffs in personal injury. "There's been a run of cases with not very good results for plaintiffs, particularly in chronic pain cases where plaintiffs are not doing particularly well, generally, at trial," he says. "Juries seem to be not particularly happy with plaintiffs or plaintiffs' lawyers [now], and when cases go to trial, sometimes, bad things happen." Preszler, whose firm has blanket coverage, says the premium per case ranges from around $500 for $10,000 worth of coverage to approxi- mately $1,500 for $100,000 in coverage. The product was first offered by Bridgepoint Indemnity Company in 2009. In 2016, Bridge- point was served a cease and desist order by the Financial Services Commission of Ontario because it was not licensed under the Insurance 'After-the-event' insurance can lessen financial risks for plaintiffs, but critics say it has drawbacks By Aidan Macnab ADVERSE COST INSURANCE I N S U R A N C E D E F E N C E L E G A L R E P O R T ALEXEI VELLA

• Cover