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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 47 Justice Dan Cornell decided that, as the policy covered clients in other cases, exposing its contents raised the issue of solicitor- client privilege and that the policy "does not lie within the pos- session, control or power" of the plaintiffs themselves, only the firm representing them. "I think it's wrong myself," says Csathy. "I think the plaintiff is probably the name insured on that policy and has access to that, is in control of that policy and can produce it. So, I ques- tion the facts that the judge was presented with in that case." But the issue with solicitor-client privilege does not just arise in a policy-holder's disclosure to the court. According to Short in Abu-Hmaid v. Napar, certain policies require "routine reporting" to the insurer, which, without proper authorization, could amount to a breach of solicitor-client confi- dentiality. Mandel says he's seen policies where the insured lawyer is required to report to the insurer on how the case is progressing. "I'd be very concerned that reporting letters, memos or discus- sions between the adverse cost insurer and the lawyer might be something that the defendant or his insurer might want to get a hold of. I think that's a big problem," he says. "I am not sure the client wants you telling some adverse cost insurer the upside and downsides about their case and all their personal information." Buying adverse cost insurance on a blanket basis is a new development and less expensive way to be covered. To seek a policy on the verge of trial will mean the insurance companies take a close look at the case "and probably charge three times as much for a premium" than the plaintiff would pay on a blanket basis, Csathy says. While making the trial option more enticing for plaintiffs, cost insurance policies usually have a limit of $100,000, which puts a damper on that incentive because most cost awards are more than $100,000, says Csathy. "The plaintiff will maintain a personal exposure to anything over that limit," he says. The courts have produced conflicting rulings on whether the premium paid for adverse cost insurance is a compensable disbursement. In Markovic v. Richards, the only example Justice Jane Mila- netti could find of this disbursement being allowed was a U.K. case. This event followed a "substantial overhaul of the system for financing the cost of personal injury litigation" in that coun- try, the decision states. Because the insurance has "not been the subject of legislative reform" in Canada as it was in the U.K., Milanetti said, it should not be compensated. "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. I do not think it fair and reasonable that an insurer be expected to cover the disbursement for this payment of premiums," Mila- netti wrote. The same conclusion was reached in the 2016 Ontario Supe- rior Court case of Valentine v. Rodriguez-Elizalde. In 2014, in MacKenzie v. Rogalasky, Justice David Harris wrote that costs are recoverable if they "arise directly from the exigencies of the proceeding and relate directly to the management and proof of allegations, facts and issues in litigation." Harris found the insurance did not fit the description. Preszler would disagree, saying a disbursement "by defini- tion is an amount that is spent in order to further litigation." "It is a disbursement. I don't think there's any question," he says. Exceptional advocacy. Great people. Honoured to be one of Canada's Top 10 Insurance Defence Litigation Boutique Firms. www.ztgh.com | 416-777-2811 | reception@ztgh.com As voted by Canadian Lawyer Magazine ntitled-2 1 2018-09-06 2:45 PM

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