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Standard of care evolving to include ATE indemnity advice

For personal injury lawyers launching a lawsuit, the standard of care is evolving to include advising clients of the availability of legal cost protection, or as European insurers operating in this market refer to it, ‘after-the-event’ (ATE) insurance, BridgePoint Indemnity Company chairman and CEO John Rossos tells Law Times.

As the article notes, Ontario courts are currently considering the treatment of ATE legal cost indemnities and insurance, which allow litigants to protect themselves from the risk of a cost order and can also be provided as a blanket guarantee for a law firm that needs protection for its disbursements.

As Rossos explains, in 1999 in the U.K., “the Access to Justice Act mandated a situation that where ATE insurance, as it is known in the U.K., is purchased, a defendant had a duty to pay the premium. It then became ubiquitous in the legal community and evolved to be a standard of care. If counsel is not advising their clients that it is available, they are negligent.”

Rossos tells Law Times that a similar phenomenon is likely occurring here with the evolution of legal cost indemnities.

“It is becoming the standard of care for personal injury lawyers launching a lawsuit to advise claimants of the products’ availability. If an unprotected client subsequently finds out about protection, the next question to the lawyer will be, ‘Why didn’t you advise me about it?’”

As Law Times notes, some indemnities will cover adverse costs, including defence legal fees and the plaintiff lawyers’ disbursements, but not the plaintiff lawyer’s legal fees. As Rossos explains, legal fees are on a contingency basis, and in a downside case, the client could say that a contingency fee should not be paid, because the lawyer has essentially borne no risk.

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