Canada: Everything You Need To Know About Trial Insurance

Security Against Bad Outcomes at Trial For Sale!

After the Event Insurance ("Trial Insurance") is a type of insurance that protects personal injury plaintiffs against their own disbursements incurred and opposing counsel's costs if they are unsuccessful at trial. Generally, unsuccessful parties bear the responsibility of paying a, sometimes significant, portion of the successful side's legal costs in addition to their own. The availability of Trial Insurance changes the landscape of personal injury litigation for everyone involved. While the concept of Trial Insurance is relatively new in Ontario, it is already rapidly evolving and becoming more prevalent.

How it Works

Trial Insurance can be purchased at any point in the litigation after a claim has been filed. Coverage is typically around $100,000 but can range anywhere between $25,000 and $250,000 in personal injury cases, depending on the projected cost of litigation. Insurers and underwriters evaluate the file's potential to succeed before issuing a policy. Given the sums involved in such policies, coverage is generally limited to litigation that is considered highly likely to succeed and where the defendant has sufficient funds to pay costs.

The policyholder is always the plaintiff, and as with any type of insurance, the plaintiff pays a premium. While insurers set their own premium rates, generally, premiums are set according to risk. Therefore, the higher the risk involved in taking the case to trial, the higher the premium will be. Risk (and therefore, premiums) may increase as the parties get closer to trial. If a plaintiff accepts a pre-trial offer to settle, they lose their premium and walk away. Policy terms can vary from case to case, and from insurer to insurer. Some policies will cover adverse costs for motions, whereas others will strictly insure within the confines of litigation during trial.

If the plaintiff loses at trial, Trial Insurance covers costs payable to the winning side (including defence legal fees) and the plaintiff's own disbursements, up to the limit that has been selected. However, Trial Insurance does not cover the plaintiff lawyer's legal fees. If the plaintiff wins, the insurer receives a predetermined amount. In Ontario, insurers do not typically obtain a percentage of the winnings, but rather, collect the premium agreed upon at signing. In some cases, plaintiffs can choose to pay the premium up front.


While Trial Insurance only entered the Canadian market recently, it has been around for quite some time in the United Kingdom.

The Access to Justice Act was brought into effect in the United Kingdom in 1999. One of its purposes was to offer an alternative to the traditional funding of litigation. It introduced Trial Insurance, among other changes.1 Given that Trial Insurance has been around for 18 years, the market and underwriting for Trial Insurance is therefore more developed in the United Kingdom.

Trial Insurance entered the Canadian market through class-action litigation around 2009.

Trial Insurance entered the Canadian market through class-action litigation around 2009. Firms sought out insurance for their clients to protect them from the significant financial risks of class-action litigation. Personal injury lawyers began to seek similar protection for their clients after witnessing how such insurance empowered representative plaintiffs in class actions to maximize the value of their claims—and thus, a market was born.2

While some insurance providers offer Trial Insurance across the country, Ontario and British Columbia have the most developed jurisprudence on issues surrounding its use.

The Good

Trial Insurance provides a clear benefit to plaintiffs, as they receive protection from the sting of having costs ordered against them if unsuccessful at trial. In general, plaintiffs that may have previously been inclined to accept a lower settlement in order to avoid trial and risk incurring a loss can now purchase the security to refuse inadequate settlements and proceed to trial with little risk of adverse costs. The availability of Trial Insurance can, therefore, increase access to justice to those with limited financial means.

Lawyers acting for plaintiffs often run the risk of being out of pocket for unpaid disbursements if an action fails and their clients are unable to pay. Therefore, lawyers acting on behalf of plaintiffs may also benefit if their clients purchase Trial Insurance, as they stand to receive protection for disbursements incurred. With protection for their disbursements, lawyers acting for plaintiffs may feel empowered to take on more clients, retain appropriate experts, and adopt tougher positions in negotiations.

Surprisingly, defence lawyers and their clients may also benefit from the security that Trial Insurance offers plaintiffs and their counsel. For instance, judges may no longer hesitate to award costs, particularly on a substantial indemnity basis, where a plaintiff is insured. If an order for costs is made, defence counsel and their clients can be more certain they will recover their costs, as they know an insurer will pick up the tab. Recovering payment for costs can be difficult, if not impossible, when the plaintiff does not have the means to pay.

The Bad

Triggers invalidating coverage may include:

Generally, plaintiffs have less decision-making autonomy with Trial Insurance as they are required to adhere to the terms and conditions of the policy. Triggers invalidating coverage may include: failing to take plaintiff counsel's advice, failing to cooperate with counsel, or parting with counsel.3 Even more problematic, the stipulations of the policy may put a strain on the solicitor-client relationship, as plaintiff's counsel is responsible for updating the insurer regarding the status of litigation. Where a breach occurs, it is up to counsel to advise the insurer, who may then terminate the policy.

Regardless of whether the claim is successful, plaintiffs in Ontario and British Columbia will lose their premium as it is not recoverable as a disbursement.4 While increasing access to justice is the intended effect of Trial Insurance, plaintiffs pay out of pocket for premiums. As these premiums are set in accordance to risk, plaintiffs may be unable to afford trial insurance entirely. Where a claim succeeds, coverage is not guaranteed as payment is subject to the insurer's investigation.5

Where a claim is unsuccessful, lawyers acting for plaintiffs may not get paid for their time, as only disbursements and the opposing counsel's costs are covered by Trial Insurance. Where a claim is abandoned and coverage is consequently invalidated, lawyers acting for plaintiffs may be in the unfortunate position of having to pay out of pocket for disbursements in addition to not getting paid for their time.

Defence counsel and their clients face the greatest loss of all—their leverage. Plaintiffs without Trial Insurance may be more amenable to settling early and accepting a less-than-ideal settlement, simply in order to avoid incurring the costs associated with going to trial. Since plaintiffs with Trial Insurance have little to lose by proceeding to trial, defendants are no longer able to use the threat of trial to facilitate a settlement on their terms when plaintiffs have Trial Insurance. The long-term effects of this may lead to fewer settlements, costlier settlements, and/or deferred settlements. Regardless of the outcome, insurers should expect a slower turnover of cases.

The advent of Trial Insurance may also have a broader impact on the justice system in Ontario. Although insurers aim to only underwrite claims with a good chance of success, plaintiffs with Trial Insurance may overvalue the merits of their case and push to have their day in court—regardless of whether that day is necessary. As such, mediators and judges may encounter difficulty persuading the parties to settle and avoid going to trial.

A Strategy for Insurers

While insurers have no say in whether a plaintiff obtains Trial Insurance, they can control their knowledge and response to it.

For insurers defending claims, it is important to determine whether the plaintiff is insured early on, as this can affect the settlement process. The Examination for Discovery and Pre-Trial Conference are the best times to ask, in order to compel disclosure and frame settlement offers accordingly. If plaintiffs have Trial Insurance, then they must disclose that they have it.6 It is well-established, and has been re-affirmed in a recent legal decision in Ontario, that parties are also required to provide a copy of their policy if asked, as defendants have a broad legal right to inspection.7

It is in the plaintiff's best interests to disclose that they have Trial Insurance, as doing so would show the plaintiff has nothing to lose, and would then likely facilitate a favourable settlement. However, if plaintiffs refuse to answer whether they have Trial Insurance, defence counsel may bring a motion and/or application for an order compelling the plaintiffs to answer, and also to produce the policy itself.8


Trial Insurance is a novel concept in Ontario and in Canada. While its future and impact remain to be seen, it is certain that it will evolve as litigation parties gain more experience with it.

Those in the business of providing Trial Insurance should welcome the opportunity for new business. For insurers defending a claim, the only benefit is the certainty in knowing the plaintiff will be able to pay costs, which translates into a lower legal bill for the insurer. While this is an important advantage, it may not be worth the disadvantage of losing considerable leverage in the settlement process.


1 Box Legal, History of ATE Insurance

2 John Rossos, Legal Cost Protection Indemnities Versus ATE Insurance Advocate Daily.

3 Daigneault v Canjet, 2016 ONSC 78, 2016 CarswellOnt 105 [Daigneault].

4 Markovic v. Richards, 2015 ONSC 6983. 2015 CarswellOnt 17302, Foster v Durkin, 2016 ONSC 684, 2016 CarswellOnt 2096, Valentine v Rodriguez-Elizalde, 2016 ONSC 6395, 2016 CarswellOnt 16267, Wynia v Soviskov, 2017 BCSC 195, 2017 CarswellBC 334.

5 Daigneault, supra note 3.

6 Rules of Civil Procedure, RRO 1990, O Reg 194, s 30.02(3), Abu-Hmaid v Napar, 2016 ONSC 2894, 2016 CarswellOnt 6769 [Abu-Hmaid].

7 Fleming v Brown, 2017 ONSC 1430, 2017 CarswellOnt 2957.

8 Ibid, Abu-Hmaid, supra note 6.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Miller Thomson LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Miller Thomson LLP
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions