Law Times

October 4, 2010

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STORE & SHRED Exceptional Quality at Reasonable Prices! COPY, SCAN, Call us today to fi nd out how much you can Save. TF: 1.888.781.9083 ocdavit_LT_June7_10.indd 1 $4.00 • Vol. 21, No. 31 6/4/10 9:22:44 AM Covering Ontario's Legal Scene LawPRO rates spike again 14% hike blamed on 'ugly cacophony of challenges' BY MICHAEL McKIERNAN Law Times L awPRO will hike its base insurance rate by 14 per cent in 2011 as the insurer comes to terms with "new normals" for claims costs that just a few years ago would have been viewed as "out- rageous." Lawyers will pay a base premium of $3,350 next year, up $400 from $2,950 in 2010. In delivering LawPRO's report to Con- vocation last Wednesday, Law Society of Upper Canada Bencher James Caskey, a member of the company's board of direc- tors, said the insurer had to respond to the increasing number of claims by lawyers and the ballooning costs of paying for them in recent years. Lawyers reported 2,272 claims in 2009, up 27 per cent from 1,788 in 2000. But where the insurer is really feeling the heat is in the total cost of paying out those claims. Over the same period, that fi gure rose 50 per cent. "Gone are the days when claims costs hovered in the $60-million range, which at the time was thought to be outrageous," Caskey said. Between 1995 and 2004, the total claims cost per year fl uctuated between $49 million and $64 million. But since 2005, costs have risen steadily, with estimates for 2010 push- ing $90 million. "Th e new normal for claims cost looks to It was a "special benefi t that resulted from a very healthy investment result in 2007," according to Caskey. "Unfortunate- ly, that has not been sustainable." Th is year's rise follows a 20-per-cent spike last year, when base premiums increased by $500. For his part, Caskey noted the "ugly cacophony of challenges" that necessitated that move: weak investment returns, the impact of the HST, and increasing claims costs, all of which will continue to chal- lenge the company in the near future and limit its ability to mitigate premium hikes. "I'd like to say the future is bright," he said. "Unfortunately, that is just not the case." LawPRO has blamed the increase in large part on the increasing cost of real estate. Costs have gone up for real estate claims, as well as in the areas of family law, corporate law, and wills and estates. Ac- cording to Caskey, because property is of- ten the largest asset belonging to families and businesses, its increasing value boosts the cost of claims. But Bencher Th omas Heintzman said he 'Gone are the days when claims costs hovered in the $60-million range, which at the time was thought to be outrageous,' says James Caskey. be somewhere in the $85-million to $90- million range," Caskey said. As recently as 2008, base premiums hit a record low of $2,300, but that year is looking increasingly anomalous after the onset of the fi nancial downturn. was "disturbed" by the trend and noted his experience with disciplinary matters has led him to believe there could be deeper prob- lems in the profession. "What I'm hearing is that there are sys- temic problems in our profession which are causing this," he said in calling for a more integrated approach to the problem. "I would suggest it's due to some parts of our See Few, page 4 ing a major overhaul of the fami- ly law system with money to pay for it, one of its authors says. Toronto lawyer Barbara Lan- dau co-wrote the report present- ed to Attorney General Chris Bentley last week. A collabora- tion between the Ontario Bar Association, the ADR Institute of Ontario Inc., and the Ontario Association for Family Media- tion, it makes several recommen- dations designed to remove the confl ict the authors say is at the heart of the current family law process that stem from a gather- Make court the alternative, report urges T BY MICHAEL McKIERNAN Law Times he province should back up its vocal support for a new report recommend- ing of lawyers, judges, mediators, mental-health practitioners, and members of the public with ex- perience in the system held last November. "If we could get some of the ideological changes, I'd be happy as a starting point," Landau says. "But in the long run, there has to be some commitment of funds to this." Th e authors want the province TitlePlus_LT_Jan12_09 12/23/08 11:07 AM Page 1 to train specialized case assessment co-ordinators to steer as many families as possible away from the courts and thereby leave judges free to deal with the most diffi cult matters. In those instances where litigation is the only option, they want greater judicial continuity, with specialized family court judg- es seeing each case through the system from start to fi nish. Th e province is already on board with another preliminary recom- mendation, mandatory informa- tion sessions for litigants, with pilot projects rolled out in Bramp- ton and Milton, Ont., earlier this year. Bentley recently announced the province would expand the program to all of its Family Court branches and was full of praise for the report's aims of speeding up resolutions, reducing costs, and increasing effi ciency. "What you say makes such incredibly good sense," he said in accepting the report. But Bentley has consistently warned family lawyers to leave their funding concerns at home because fi nancial constraints mean he can't listen to them. "Th ere isn't a lot of extra money," he said. "It's Together we have all the tools To ensure your clients get the most comprehensive coverage in one title insurance policy, take a look at the TitlePLUS Program , your Bar-related real estate partner! ® ® PROTECTION AS GOOD AS IT GETS 1-800-410-1013 ® TitlePLUS, the TitlePLUS logo, OwnerEXPRESS and LAWPRO are registered trademarks of Lawyers' Professional Indemnity Company. ® BAR-RELATED Mark is a registered Mark of North American Bar Related Title Insurers used by LAWPRO under License. 1 Please refer to the policy for full details, including actual terms and conditions. The TitlePLUS policy is underwritten by Lawyers' Professional Indemnity Company (LAWPRO®). Contact LAWPRO for brokers in Saskatchewan, Manitoba, Alberta and Québec. TitlePLUS policies issued with respect to properties in Québec and OwnerEXPRESS® policies do not include legal services coverage. 1 Focus On Litigation Quote of the week "I think all of us are uncomfortable with the idea of a plaintiff who is blameless not being able to recover. But we're equally uncomfortable with the idea of a municipality — taxpayers — funding that gap." — Cheryl Woodin, Borden Ladner Gervais LLP, See Municipalities, page 12 National Action 6 Hallway Agreements 9 A. NEUMAN ASSOCIATES INC. The Boutique Investigative, Forensic Accounting & Valuation Firm For Damage Quantifi cation, Fraud Detection, Business/Estate Disputes, Family Law, Personal Injury, Insurance Claims, Expert Testimony. Contact us by E-mail: Tel: (416) 223-5991 October 4, 2010 euman_LT_Sep13_10.indd 1 9/8/10 4:07:23 PM Inside This Issue 5 not always about resources; it's about the determination to make something happen." But Landau fears the lack of fi nancial commitment could eventually put the whole project at risk. In Brampton and Milton, local lawyers give information ses- sions and act as dispute-resolution offi cers without getting paid. "Funding is an enormous hurdle," Landau says. "Right now, everything is being done on a volunteer basis, which is great, but how long can it last?" She thinks even a small hono- rarium would encourage lawyers to give up their time. Th e report makes a number of suggestions for possible fund- ing sources, including higher See Current, page 4 LT Digital version.indd 1 6/25/10 12:59:47 PM Click here to subscribe today to LAW TIMES

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