Wednesday, October 07, 2009

'Legal Expense Insurance' Coming to Canada?

The Toronto Star reports today that a German firm is seeking federal approval to bring a legal insurance plan to Canada.

The proposed, private insurance plan will cost approximately $500.00 annually, and will provide up to $100,000 coverage for legal fees and adverse costs orders in civil and criminal matters. Family law matters will be excluded.

The Star article notes:

...the federal government's superintendent of financial institutions has been asked to approve a plan that would allow Canadians to purchase insurance premiums for less than $500 a year, which would cover up to $100,000 in legal expenses, including the cost of a lawyer preparing and arguing a case court.

The types of cases covered could include wrongful dismissal and other employment disputes, tax problems, personal injury claims and property fights with neighbours, according to Barbara Haynes, chief executive officer of DAS Canada, the Canadian arm of the German company seeking to do business here.

This sort of plan may represent a positive development in addressing Ontario's chronic access to justice issues, particularly in view of the systematic deterioration of our Legal Aid system.

One wonders, however, how long it will take for taxpayers to demand a genuine "public option" for basic legal coverage. To borrow from a current American buzz-phrase, do you really want an insurance company bureaucrat coming between you and your lawyer?

The question is not just a rhetorical one.

Of course it is a good idea to make some form of financial coverage for legal services available to the public. Unionized auto workers have had basic, pre-paid legal services coverage for quite some time.

Our concern relates to the details, rather than the general concept of this reported proposal:
  1. To what degree will insurance company approvals for specific legal procedures and actions be mandated by any ultimate plan?
  2. Will the right for individuals to the legal counsel of their choice be preserved?
  3. How will solicitor and client privilege be protected if ongoing reports by counsel to the insurer are to be required under an insurance plan?
  4. What will the public's recourse be in the event of questionable denials of coverage?
  5. Perhaps most importantly, how will the privacy of litigants enrolled in such a plan be protected internationally?
Canada's law societies and bar associations must have a place at the table in discussion and planning for these types of legal insurance vehicles.

Such insurance plans could represent a genuine breakthrough.

But we should proceed carefully - if we are heading down this road, let's get it right from the outset.

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