Adverse Costs Insurance: How to protect yourself when entering a lawsuit

The current system in Ontario entices parties to settle outside of court to prevent the risks that are involved with Jury trials. The major risk is that the unsuccessful party to a lawsuit may be expected to pay the successful parties’ legal costs. These legal costs of a Jury trial can go as high as $100,000.00 or even more. Insurance companies feel less of the financial strain when it comes to going to trial, but the average Plaintiff finds this risk unsettling.

Adverse Costs Insurance, also known as After The Event insurance, can assist Plaintiffs taking this risk. If the trial is unsuccessful for the Plaintiff, not only is the Plaintiff responsible for some portion of the Defendant’s legal costs but they are potentially also responsible to pay their own lawyer’s disbursements. Disbursements are hard expenses that the lawyer pays during the course of your lawsuit. Disbursements include photocopying, faxes, filing fees, expert medical reports, courier costs, etc. Adverse Costs Insurance protects unsuccessful Plaintiffs from having to pay the Defendant’s legal costs or their lawyer’s disbursements.

In personal injury matters, the typical coverage amount is $100,000 and the premium costs $1,350 plus 8% provincial tax. This amount does not require payment upfront. In the event the Plaintiff is successful, the cost for the insurance gets paid from the settlement amount. In the event the Plaintiff is unsuccessful, the Plaintiff is covered up to $100,000 and does not have to pay the premium.

Adverse Costs Insurance allows Plaintiffs to bring a legal action against insurance companies without as much financial risks.

If you or a loved one have been injured in an accident, you may be entitled to receive the help you deserve. Contact us at JEWELL RADIMISIS JORGE LL.P. and a member of our team will be happy to assist you.