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 BICO 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 AdvocateDaily.com.
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.
“In this case, the costs of advancing even the claims on which the plaintiffs were successful were extremely large,” he said.
“Also, in general, even the strongest claim of a plaintiff may not be successful depending on how the evidence comes out and how it is perceived by a trier of fact.
“Without costs insurance, the fear of a very large adverse costs award would cause many plaintiffs of modest means to be afraid to pursue meritorious claims. It is in the interests of justice that plaintiffs be able to pursue meritorious claims without fear of a potentially devastating adverse costs award.”
The judge ordered that the plaintiffs’ disbursement for costs insurance be paid for by the defendant in this matter.
“Additionally, I am satisfied that it was reasonable for the plaintiffs to have advanced their claims as they did because there were genuine triable issues on all claims that were advanced. Accordingly, the claim for the costs insurance premium will be allowed,” he said.
Rossos, in the interest of full disclosure, says BICO, provided the litigation insurance in this matter.
He says the Superior Court decision means that for BICO clients who have purchased legal cost protection insurance, they will no longer have to pay for it so long as they have a meritorious claim.
Rossos says litigation insurance levels the playing field in personal injury cases so that plaintiffs no longer have to settle for low ball offers or fear losing everything if they aren’t successful in a claim.
“Our legal system is a ‘loser pays’ system, which means if you bring forward a legal claim and lose you must pay the winner’s costs,” he says.
“The insurance we sell protects people by stipulating that if they lose their case we will pay the costs they owe to the defendant while also paying for the disbursements that they owe their lawyers for out of pockets costs incurred on their behalf.”
From an access to justice perspective, Rossos says, this decision is great news because “the courts are recognizing that people involved in litigation have to incur a cost to protect themselves, and therefore the defendant is responsible for those costs if they choose to litigate.
“In simple terms – the successful plaintiff gets protection for free,” he says.
“This really is a key decision.”