When a lawsuit goes to trial, the general rule is that the successful party will have at least some of its costs (legal fees) paid by the unsuccessful party. This can be a significant risk for a Plaintiff who does not have the money to pay.
In the last several years, there has been a growing trend of Plaintiffs obtaining a product known as “adverse cost insurance”. This is a product which reimburses a Plaintiff for legal fees awarded against him or her following an unsuccessful trial. It has helped to level the playing field between Plaintiffs and insurance companies.
Courts in Ontario have recently been grappling with the issue of whether a Plaintiff has to disclose that they have purchased this type of policy at the discovery stage and whether the policy itself has to be produced to the Defendant. The disclosure of the policy could have a significant impact on how the case is conducted.
There have been several cases where judges have determined that the existence of the policy has to be disclosed but the policy itself does not have to be produced. However, in a recent endorsement in Fleming v. Brown, a motion judge decided that the Rules of Civil Procedure require a Plaintiff to produce the policy to the Defendant.
Now that there are conflicting decisions at the trial court level, we can likely expect the Court of Appeal to weigh in before long.
For more information on the use of adverse cost insurance, or if you have any questions regarding the points outlined above, please feel free to contact me directly.
Associate – Personal Injury and Litigation Group
Disclaimer: This article is provided as an information resource. This article should not be relied upon to make decisions and is not intended to replace advice from a qualified legal professional. In all cases, contact a legal professional for advice on any matter referenced in this document before making any decisions. Any use of this document does not constitute a lawyer-client relationship. Please note that this information is current only to the date of posting. The law is constantly changing and always evolving.