The Recoverability of Indemnity Fees – The Debate is Just Beginning

Since BridgePoint Indemnity Company (Canada) Inc. (LISC) introduced LISC Legal Cost ProtectionTM to the Canadian legal market, a fundamental question posed by the personal injury bar is whether the indemnity fee charged is recoverable from the defendant. Until recently, there has been no Canadian decision addressing this issue.

The Superior Court of Justice has now addressed the issue in Markovic v. Richards et al., 2015 ONSC 6983 (CanLII) (“Markovic“) on Nov. 12, where Madam Justice Milanetti held that the fee charged for obtaining legal cost protection is not a compensable disbursement.

The plaintiff in Markovic had obtained legal cost protection against adverse costs and disbursements in an action arising from a motor vehicle accident. The judge has mistakenly referred to the product as ATE insurance purchased from DAS, a foreign insurer, when, in fact, it was a legal cost indemnity provided by LISC. Following trial, the plaintiff sought payment of the indemnity fee from the defendant as a disbursement.

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