Litigation Insurance in Canada
Litigation Insurance (sometimes called After the Event (ATE) Insurance in other jurisdictions) is a specialized product that protects the financial interests of plaintiffs in Canadian involved in legal disputes. It provides coverage for a plaintiff’s potential legal cost liability if a case is unsuccessful, helping to reduce financial risk and improve access to justice. Litigation Insurance is designed specifically for when a legal dispute has already arisen. Policies can cover adverse costs, disbursements, and other litigation risks—giving both plaintiffs and law firms greater financial security throughout the litigation process.
TheJudge provides litigation insurance in Canada for Civil litigation, Personal injury Litigation, and Class action Litigation.
Civil Litigation Insurance
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The litigation insurance policies we arrange can provide protection for:
Adverse costs — a plaintiff’s risk of paying their opponent’s legal costs if they are unsuccessful.
Own disbursements — fees related to a plaintiff’s matter, including things like court fees and expert or medical reports.Failure to beat a with-prejudice offer
Interlocutory costs
Every case is different. We take the time to understand your requirements and arrange a solution that is tailored to the specific needs of your case.
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Litigation insurance can support a wide range of civil cases in Canada, including but not limited to:
Banking and financial disputes
Contract disputes
Debt recovery
Insolvency
Partnership disputes
Professional negligence claims
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Prepaid legal insurance covers routine services such as advice or document drafting. Litigation insurance (ATE) protects plaintiffs against the risk of paying legal costs if their civil litigation claim is unsuccessful.
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BTE insurance is purchased before a dispute arises, often as part of home or business coverage. Litigation insurance is arranged after a dispute has arisen, so plaintiffs can protect themselves from legal costs even if they had no prior insurance. In some jurisdictions, it is referred to as ‘After the Event’ or ‘ATE Insurance’ to highlight this distinction.
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Typically, the plaintiff arranges the policy. However, law firms can also secure coverage for clients as part of a broader offering for their clients.
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Yes, Canadian courts recognize litigation insurance as a legitimate tool to manage financial risk in civil cases.
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The policy will specify the start date. If a case is under a contingency fee agreement, cover may apply retrospectively from the signing date of the contingency fee agreement. Otherwise, coverage usually begins once TheJudge is instructed to bind the policy and the policy is incepted.
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Cases with all forms of retainers are eligible to apply for ATE insurance – that includes contingency fee agreements, client-funded, third party funded etc.
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Indemnities typically range from $250,000 to $1m, with higher limits available on application
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Yes. Litigation insurance can be arranged for single cases or on a portfolio basis with a law firm or company insuring a number of disputes.
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Yes, although earlier applications generally allow for more favourable terms. The ideal time to apply for litigation insurance is before commencing proceedings (e.g., by filing a Statement of Claim or Notice of Civil Claim).
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Appeal coverage may be available, depending on the policy and the insurer.
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You can apply now via our website, we recommend reading our application and advice first. If you’d rather talk it through with one of our experts first – please feel free to contact us – we’d love to help.
Premiums and Payments
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Yes. Most litigation insurance premiums are ‘contingent upon success’; this means that if the case is lost or discontinued, no premium is payable, and there is no reduction in the level of coverage. This means that many premiums are only payable if a matter is successful – in which case the premium is paid from the proceeds of the case.
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Yes. Premiums are likely to be deferred until conclusion, with no upfront cost. In most cases they are only due at the conclusion of a dispute if the matter is successful.
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No. Generally, litigation insurance premiums are not subject to interest; therefore calculating the costs of the premium is quite straightforward.
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If a case settles before trial, the policy remains in place and protects against costs incurred up to settlement. Premium terms may vary depending on the timing and outcome of settlement – generally, the earlier a matter settles, the lower the price of the premium, as most insurers will offer a discount in premium for early settlement, or will structure a staged premium with a lower premium applying to matters that resolve earlier.
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Canadian courts—including the Ontario Superior Court—have previously accepted properly structured litigation insurance policies (ATE insurance) as adequate security for costs, in lieu of a payment into court. However, acceptance depends on the specifics of the policy, including enforceability, scope of coverage, and any exclusions.
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No. Litigation insurance provides financial protection without interfering in case strategy or decision-making.
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Litigation insurance can complement third party funding arrangements. By covering adverse costs and disbursements, the insurance may be used to reduce the risk for both plaintiffs and funders, often leading to more favourable funding terms. Insurance is almost always a lower cost alternative to third party funding.
TheJudge have a long history of helping to arrange litigation insurance where funding is in place – and regularly work strategically with global litigation fund Erso Capital.
Litigation insurance can also be a lower-cost alternative to litigation funding if a client is able to self-fund their legal costs, but would like to protect against the risk of loss.
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For plaintiffs, litigation insurance provides peace of mind that personal assets are protected. For law firms, it helps reduce financial pressure by:
Supporting better financing terms for disbursements
Ensuring invested capital is insured
Reducing reliance on third-party funding
This allows firms to focus on achieving the best possible results for their clients.