A landmark decision for access to justice in Ontario has paved the way for plaintiffs to recover the full cost of their ATE insurance premiums as a recoverable disbursement to be paid by the unsuccessful defendant.

Justice Salmers in Amstrong v. Lakeridge Resort Ltd., 2017 ONSC 6565 (see link) displayed sound reasoning in reversing the position in Markovic v Richards et al, 2015 ONSC 6983, which had until now been used as a barrier to premium recoverability. His Justice stated:

“Without costs insurance, the fear of a very large adverse costs award would cause many plaintiffs of modest means to be afraid to pursue meritorious claims. It is in the interests of justice that plaintiffs be able to pursue meritorious claims without fear of a potentially devastating adverse costs award.” [Para 21]

Justice Salmers expressly recognised the fundamental importance of adverse costs protection for claimants – even in cases that some might consider “straightforward”.


What does this decision mean?

  • Pure and simply it means much greater access to justice for plaintiffs who would otherwise not pursue meritorious claims over a fear of the costs consequences.
  • A successful plaintiff will receive the full compensation they are entitled to without deduction of the cost of the insurance premium.
  • Recoverability is not limited to a narrow channel of cases but applies to the full spectrum, expressly including even the most straightforward cases. This is important because the health and competitiveness of the ATE market is stronger where firms insure the full basket of risks.
  • There will be an inevitable increase in demand for ATE insurance cover matched by much greater supply, leading to a more diverse and competitive ATE market in Ontario. Naturally, TheJudge will support this growth using its global network of contacts in every way possible.


Some questions for any appeal

If this decision is appealed, we expect the court to focus on two key aspects that do not appear to have been considered in detail thus far:


  • If the premium is to be recoverable, then surely the existence of the policy must be discoverable to the defendant so that they are on notice of their potential additional liability. This remains a mandatory requirement, where applicable, in the UK. Some insurance products seek to avoid the disclosure of the insurance which may  frustrate plaintiffs seeking to recover the premium cost.
  • Fundamentally, some insurance providers insure the law firm, not the plaintiff. As far as premium recoverability is concerned, we think this approach is vulnerable to challenge, because only the plaintiff can recover costs inter-partes, and if they are not the named policyholder then how can they recover the premium under such indemnity principle?


TheJudge’s range of insurance products does not have either weakness because the insurance is discoverable as standard and the insured policyholder is the plaintiff.

We, alike plaintiff law firms across Canada, will be watching what happens next with great interest.

Please contact our team if you would like explore the possibility of arranging or changing an insurance program.


TheJudge Canada Team

Armstrong v Lakeridge Resorts Ltd. 2017 ONSC 6565