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REAL ESTATE defence costs Lawyers entitled to Court ruling confirms duty of title insurance companies to defend lawyers in title- related matters, where a title insurance policy is in place. BY KEV IN MARRON T he risk of being sued by clients for alleged errors and omissions has always loomed large for real estate lawyers, who account for a large portion of the claims against law society indem- nity insurance plans. Now lawyers in Ontario and the lawyer-owned program that insures them can breathe a little eas- ier in light of a recent court ruling that confirmed the duty of title insurance companies to defend lawyers in title- related matters, where a title insurance policy is in place. "This is a very important case — some- thing that will affect real estate lawyers for some time," says Gavin Tighe, a partner with Gardiner Roberts LLP in Toronto, who represented lawyer Enio Zeppieri and Zeppieri & Associates in respond- ing to an application by Stewart Title Guarantee Co., which asked the Ontario Superior Court to declare it should not be held responsible for paying the lawyer's defence costs in a suit brought by clients. In January 2009's Stewart Title Guarantee Co. v. Zeppieri, Justice David M. Brown did not grant the declarations requested by the title insurer, instead he made a declaration that Stewart Title is required to fund, on an ongoing basis, reasonable defence costs not only in this case but for any Law Society of Upper Canada member against whom a claim is made arising under a title insurance policy issued by Stewart Title, except in cases of the member's gross negligence or willful misconduct. Why is it important to lawyers whether their costs are paid by the title insurance company or the Lawyers' Professional Indemnity Company (LawPRO)? To begin with, as Tighe points out, there is the simple matter of the $5,000 deduct- ible lawyers must normally pay when making a claim under LawPRO's errors and omissions insurance policy, whereas there is no deductible for lawyers to pay if their defence costs are being picked up by a title insurer. Potentially, more important is the fact the coverage under LawPRO policies is typically limited to $1 million and is what is known as a "burning limits policy" in which defence www. C ANADIAN Law ye rmag.com M AY 2009 17 PIERRE PAUL PARISEAU