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ATE insurance a risk mitigation strategy for plaintiffs

Personal injury plaintiffs facing opponents who would rather play hardball than settle can level the playing field with after-the-event (ATE) insurance, says Nick Robson, vice-president and general counsel in the Toronto office of the TheJudge Global.

Plaintiffs are sometimes desperate to take almost any offer that is presented by defendants, who are often insurance companies with deep pockets, Robson tells

"When an offer comes along, it's quite scary for a client," he says.

Robson says defendants will low-ball a settlement offer and, if a plaintiff wants to challenge it, they risk losing the lower offer along with a potentially lengthy and costly battle in court.

But plaintiffs do have a chance to bolster their efforts by considering ATE insurance, he says.

"With ATE, a client can say, 'It's not a reasonable offer, I'm protected and I'm going to push this to trial,’" Robson says. "It really mitigates the client’s risk.

"In B.C. and Ontario, lawyers are using ATE to push back at the financial strength of the insurance companies.”

TheJudge is a global company that provides litigation finance and litigation risk-sharing insurance that helps law firms and their clients manage their financial risks, Robson says.

"Someone who’s hit by a drunk driver thinks they're suing that drunk driver. But they’re not, they're suing the insurance company," he explains. "The insurance companies are paying the settlements."

Personal injury lawyers are often able to mount a challenge based on the finances they can muster whereas insurance companies "for all intents and purposes have unlimited funds," Robson says.

"Some people think personal injury lawyers are money hungry, but in reality, they're trying to take on this massive company and they don't have the same financial strength," he says. "This is where our products really help the plaintiff and their lawyer establish an even keel. Ninety-nine per cent of the people aren't going to have the financial means or the courage it takes to fight a battle against a wealthy adversary.”

Robson cites a Global News story involving an 84-year-old woman who was rear-ended in a traffic collision and offered nothing as a settlement from the insurance company. An Ontario Superior Court ordered the company to pay $237,000 in legal costs and found in favour of the plaintiff, awarding her $20,000. 

"That's the sort of strategy these insurance companies are using, which is why ATE insurance exists," Robson says. "It’s a good example of the insurer defendant trying to bully the plaintiff into walking away from her good claim using the financial impact rather than the merits of the case.”

Clients involved in cases against insurance companies should discuss ATE with their lawyers to understand what it offers and the differences between various types of policies, Robson says.

They should ask about the strength of the insurance and whether the ATE insurer will have any influence on the lawyer's practice, he adds.

"It should not have any influence," Robson says. "We have absolutely nothing to do with the lawyer."

Another important discussion is whether the ATE policy fully covers the client, as not all policies are equal, he says. Smaller brokers may not be able to provide the same coverage as some of the bigger players.

"Some people buy ATE for the price, not the coverage," Robson says. "The lawyer should know whether their client has absolute full coverage, or at least tell the client they don't have full coverage."

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