­­Due to a recent decision by the Financial Services Commission of Ontario, some indemnity contracts are no longer available.

Nudorra Capital is promoting the use of ATE Insurance products through a strategic relationship we have with an Insurance Broker. The overwhelming advantages of costs, security, and protection, for both lawyer and plaintiff, speak for themselves.

THE BOTTOM LINE: Insurance companies are licensed and regulated, their capital is protected, and they have decades of global experience. The Insurance product gives you Delegated Authority. And courts in Ontario are finding After-The-Event (“ATE”) insurance is a strong weapon against Security for Costs.

Court cases

Two recent Ontario cases show the additional security arising from ATE Insurance:

  • In the case of Brent Grotz v. 1392275 Ontario Inc. o/a Hilton Garden Inn Toronto/Markham et al the plaintiff’s lawyer was able to use ATE Insurance to defeat a Security for Costs motion.
  • In the case of Alary v. Brown, 2015 ONSC 3021, the Ontario court found the Indemnity product to be weaker than Insurance and thus not able to defeat a Security for Costs order.

Globally, ATE insurance is a mature mainstream product, developed primarily in the United Kingdom where it is now mandatory. Recovery of ATE insurance premiums as disbursement was proven in Callery v Gray

[2001] EWCA Civ 1117 which led to ATE insurance being mandated by the Solicitors Regulatory Authority (part of the Law Society of England & Wales).

Product summary

Insurance is offered by a licensed Canadian insurer, who is subject to strict rules and regulations under the Insurance Companies Act, which requires rigorous capital requirements and practices, including access to an Ombudsperson.

If an Insurance company goes under, their capital base is protected via the government-approved, industry-funded Property and Casualty Insurance Compensation Corporation (PACICC). You can contact the federal Office of the Superintendent of Financial Institutions (OSFI) to discuss the benefits of using a licensed and regulated insurer, and the potential ramifications to your firm of not doing so.

The Insurance product does not have a set-off clause, so the policy pays immediately and on top of the damages, which results in your client keeping their win.

Insurance has these additional benefits:

  • Covers both Disbursements and Adverse costs
  • Gives Delegated Authority to the lawyer, giving you surety when speaking to clients.
  • If the plaintiff loses the case, Insurance always covers the premium.
  • For unsuccessful claims, Insurance allows the plaintiff to keep the awarded damages and pays out adverse costs or disbursements on top.
  • If the client changes lawyers, the Insurance product is portable (i.e., transferrable by the client) in some circumstances.
  • Protection amount and Pricing: The Insurance product has a minimum $100,000 policy. The premium starts at $1,350 and is set when the application is made.

Additional features

  • No upfront cost
  • No insurance premium is due if the case is discontinued or abandoned.
  • Approval is automatic for early-stage cases.
  • In the application, lawyers must state that, in your opinion, the case has at least a 51% chance of success.
  • The company providing protection does not manage, control, or direct the litigation in any way.
  • Arbitration costs are covered.
  • Interim cost orders are covered.

Nudorra Capital is promoting the use of ATE Insurance products through a strategic relationship we have with an Insurance Broker.  For further information or to set up an appointment please contact Jeffrey Gottheil at Nudorra Capital at 416-342-9590 ext. 101 or email jgottheil@nudorra.com at your earliest convenience.