Superior Court decision on costs ‘key’ for access to justice

A recent Ontario Superior Court of Justice decision on costs in a personal injury matter has “massive implications” for legal cost protection providers such as LISC Risk Management Inc. and, more importantly, will improve access to justice for plaintiffs, says John Rossos, chairman and CEO of the company.

“This is an authoritative ruling,” he tells

The decision, written by Justice David Salmers, explicitly shifts the burden of paying for legal expense insurance to the defendant, as an assessable cost where the plaintiff has a successful legal claim.

The judge wrote that he disagreed with the defence counsel submission that the plaintiffs’ disbursement for costs insurance not be allowed.

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Judge Requires Defendant to Pay LISC Legal Expense Insurance Premium

Fresh on the heels of the recent win for plaintiffs on the issue of disclosure in Jamieson v. Kapashesit1, we are pleased to announce another resounding plaintiff victory on the legal expense insurance front. In what will no doubt be a game changing decision on point, in Armstrong v Lakeridge Resort Ltd.2, Ontario Superior Court Justice Salmers rejected the existing case law, ordering the defendant to pay the LISC Legal Expense Insurance premium.

Since the introduction of legal expense insurance several years ago, the plaintiff personal injury bar has unsuccessfully sought the recovery of premiums as an assessable disbursement in successful trial or settlement outcomes. In a disappointing decision in 2015 representing the Court’s first (albeit cursory) consideration of the issue, Madam Justice Milanetti found in Markovic v. Richards3 that the premium was not payable by the defendant, noting that it was “nothing more than a discretionary expense”. Markovic has been successfully relied on by defence counsel ever since as the seminal decision on this issue.

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A Solid Win for Plaintiffs on Legal Expense Insurance

There has been great debate in recent years over the issue of disclosure of legal expense insurance (LEI) to defendants who have relentlessly pushed for full disclosure of plaintiffs’ LEI policies (also known as “After the Event” or “ATE” insurance). There have been decisions both for and against, culminating in the January 2017 decision in Fleming v Brown 2017 ONSC 1430 (“Fleming”) which held that a legal expense insurance policy must be disclosed pursuant to Rule 30.02 of the Rules of Civil Procedure. Most lawyers presumed this was the end of the debate, and with it the strategic benefit of maintaining privilege on the terms and details of their clients’ coverage.

Fortunately, Fleming was not the last word!

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Further lessons from El-Khodr

Plaintiffs with tort and Accident Benefit claims should prepare for increased reductions in their awards for damages following the recent Court of Appeal Decision in El-Khodr v Lackie, 2017 ONCA 716 (“El-Khodr”). In the decision, the Court determined that the principle established in Bannon v McNeely (1998), 38 O.R. (3d) 659 (C.A.) (“Bannon”), of matching “apples to apples” in regards to the categories of awards and reduction of the same is no longer relevant.

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Plaintiffs Take Another Hit

At long last, the Court of Appeal has spoken.

We have previously discussed changes to s. 258.3(8.1) of the Insurance Act that on January 1, 2015 reduced the pre-judgment interest rate for non-pecuniary damages from 5.0% to the bank rate at the time the proceeding commenced.

In El-Khodr v Lackie, 2015 ONSC 4766 (“El-Khodr”) the Court was asked to determine if this reduction applied to cases commenced prior to the amendment date. The trial judge determined, to the relief of all plaintiffs with personal injury actions commenced before the amendment date, that the amendment did not apply retrospectively. In the absence of express or implied intention, the Court held that the change in pre-judgment interest rate was to be enacted on a go-forward basis, and to find otherwise would be a windfall for insurance companies and cause disadvantage to insured persons. This was a welcome decision to plaintiff personal injury lawyers already battling defendant insurers on the retroactive application of the rate reduction.

As is often the case with law, however, a conflicting decision followed just months later in Cobb v Long Estate, 2015 ONSC 6799 (“Cobb”). The trial judge in Cobb exercised his discretion under s.130 of the Courts of Justice Act and set a pre-judgment interest rate at 3%.

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FSCO ruling changed third-party funding market

The third-party funding market changed because of a government ruling last year, John Rossos, Chairman and CEO of BridgePoint Risk Management Inc., tells the Law Times.

A Financial Services Commission of Ontario (FSCO) ruling transformed the market after saying that legal cost protection must be underwritten by licensed insurers and sold to clients through insurance brokers under the Insurance Act.

“Any private indemnity or legal cost protection must now be tied to a regulated insurance product,” says Rossos, the Toronto company’s founder. “Lawyers can’t provide an indemnity to their clients because they are not licensed insurers.”

He says the Omega General Insurance Company now underwrites LISC in Canada, where two leading global insurers with AA credit ratings reinsure the risk. Although Rossos says he strongly disagrees with the order, the company reconfigured its products into insurance policies to protect his clients.

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LISC, DAS battle it out with newcomers in the legal protection market

Canadian legal protection insurance is a growing – and evolving – industry sector. This year has seen a shake-up in the way things are done.

It’s a fairly unique form of insurance and, traditionally at least, there have been few players in the Canadian market. But that’s changing – Aon, ARAG, and Arch have all recently entered the space.

And between the two most established companies offering legal cost protection in Canada, there’s no love lost after recent industry change, allegedly prompted by one company to the detriment of the other.

DAS Insurance and BridgePoint Indemnity Company (LISC) are perhaps the two most prominent pioneers in this space – with DAS historically offering insurance, and LISC offering a service as indemnity protection.

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Focus: Third-party funding market diversifies

What has been a small industry to date is growing as the Canadian litigation funding market sees new entrants and the restructuring of existing players. Competitors are embracing starkly different models, which presents claimants and lawyers with the challenge of fitting the right type of funding to the right case.

“We’ve been a bit slower than England and the U.S. to get into third-party funding,” comments Paul Michell of Lax O’Sullivan Lisus Gottlieb LLP of Toronto. “We have had a few homegrown players, but now there are lots of conferences and promotional materials that show international groups are moving into the area.”

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LISC Risk Management Inc. launches personal injury litigation product

Just weeks after LISC Risk Management Inc., formerly BridgePoint Indemnity Company Inc., announced its new legal expense insurance product, LISC Legal Cost Protection™, the market has provided “overwhelming” support, says company chairman and CEO John Rossos.

“We’ve had a massively positive response from clients both converting to the new product, and those interested in purchasing new LISC insurance policies,” he tells “It has been very favourable.”

Canadian federal and provincial financial regulators have approved the legal expense insurance product, which is underwritten by Omega General Insurance Company and reinsured by two of the largest global reinsurers who have become LISC’s key strategic partners, says Rossos.

“Being in partnership with global reinsurance partners with A+ and A++ credit ratings ensures that our clients have more-than-adequate protection in place to support our coverage,” he says. “We arguably have access to more insurance capacity for legal expense insurance than any other insurer in the Canadian market.”

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