What is Plaintiff Cost Solutions insurance?

ARAG Plaintiff Cost Solutions insurance is a Canadian made legal expense insurance policy designed to protect individuals (plaintiffs) involved in personal injury compensation lawsuits. It provides policyholders with the confidence to pursue meritorious civil actions all the way through trial, knowing their disbursements and potential adverse costs will be covered up to the limit of indemnity.

Who is the policyholder?

  • The policyholder is the plaintiff, meaning your client is personally protected from liability for adverse costs. Most importantly, your clients' Plaintiff Cost Solutions policy travels with them in the event they retain a different lawyer for their ongoing legal action.
  • The document that determines the coverage in place for your client is the policy – this is the contract between ARAG and your client (the policyholder). ARAG issues a standard policy to every policyholder. However, the Certificates of Insurance vary, as the limits of indemnity could vary. Conversely, the Terms of Business Agreement (TOBA) is a contract between your firm and ARAG, and no part of the TOBA either informs or constitutes the policy.

What coverage does a Plaintiff Cost Solutions policy provide my client?

A Plaintiff Cost Solutions policy provides coverage in the event your client:

  • Abandons the solicitor-client relationship and does not evidence intention to retain new counsel
  • Accepts a without-costs dismissal, per your advice
  • Receives an award of $0 from a judge or jury
  • Fails to obtain a judgment in an amount higher than the amount of the defendant’s last formal offer to settle
  • Obtains a judgment against an impecunious defendant

In order to obtain coverage for any type of appeal from a judgment issued following a hearing in a civil action, you must apply for a separate policy, which will be subject to individual assessment and approval by ARAG.

Note: Judicial review proceedings are never covered.

When does coverage commence?

Coverage commences from the date of your firm’s contingency fee agreement with your client, and it is activated once an insurance certificate is issued by ARAG.

What types of cases does Plaintiff Cost Solutions cover?

Personal Injury caused by or pursuant to:

  • General Negligence
  • Occupiers’ Liability
  • Municipal Liability
  • Motor Vehicle Accidents pursuant to Highway Traffic Act
  • Non-Auto Transportation Accidents
  • Bicycle Accidents
  • Assault and Battery
  • Product Liability
  • Short Term or Long Term Disability Benefits Disputes

Keep in mind that ARAG will NOT insure cases where:

  • The legal dispute has prospects of success below 51%
  • The trial/arbitration in the action has been scheduled to proceed within 18 months of submission of the application for insurance

What is your policy issuance procedure?

Multiple Plaintiffs, One Action:

  • Where multiple persons are involved in one accident and are part of the same action, all parties to that action will be listed on the same ARAG policy with the global indemnity rate mirroring the program the law firm undertakes.
  • Multiple plaintiffs insured under one policy share the limit of indemnity and only one premium is due if there is a successful outcome of the action on a global basis.

Multiple Actions, One Plaintiff:

  • Plaintiffs involved in multiple civil actions must submit separate applications for insurance to ARAG for each action and will be issued a separate policy for each action.
  • Once a court Order is obtained and provided to ARAG indicating that multiple civil actions will be heard together/one after another at trial, ARAG can void excess policies resulting in a single insurance policy and limit of indemnity for the plaintiff and a single premium owing if there is a successful outcome of the actions on a global basis.
  • If the aforementioned court Order is not provided to ARAG prior to the final hearing/trial of a plaintiff’s multiple actions and a successful outcome of the actions on a global basis is obtained, the plaintiff will owe multiple insurance premiums to ARAG as a result.

Are there other products available?

We offer a suite of Plaintiff Cost Solutions products, with varying limits of indemnity and coverages. These products are available on a firm-wide basis.

Should your firm wish to change the limit of indemnity or coverage available on its policies, please contact us to discuss further.

What are your claims procedures and documentation requirements?

Please download our Plaintiff Cost Solutions Claims Guideline for documentation requirements. In all instances, we require the documentation necessary to substantiate the insured event pursuant to which the claim is submitted.

What important timelines should I note?

  • All claims on the policy, including a claim for a waiver of premium, must be made within 60 (sixty) days from the date on which you reasonably knew or ought to have known of the claim. For example, in the case of an abandonment, 60 days from the date on which you obtained the order removing you as counsel of record.
  • You must insure your client’s files within 180 days (6 months) of the initial Contingency Fee Agreement (CFA).*
  • If a file is transferred to you from another law firm or lawyer, this will be considered the second CFA – time to apply for insurance will be counted from the CFA with the initial lawyer, rather than your subsequently signed CFA.
  • After the 180-day deadline, the premium will increase, and the file will need to be individually assessed.
  • If not already insured, we will not insure files scheduled to proceed to trial within 18 months.

How do I sign up?

Contact us or your insurance broker to start the process of insuring your portfolio of cases. Once a contract is signed between you/your firm and ARAG, you will be authorized to offer our Plaintiff Cost Solutions to your eligible clients.