Law Times

Page 8 July 23, 2018 • law Times www.lawtimesnews.com Personal injury lawyers turn to litigation financing BY DALE SMITH For Law Times L awyers who represent plaintiffs in smaller per- sonal injury firms say they are turning to spe- cialized litigation financing to fund disbursements and expert witnesses, as well as other ex- penses. Lawyers point to finan- cial challenges they say they are increasingly confronting within the personal injury practice. Plaintiff-side lawyers say the costs for disbursements have in- creased significantly in the past decade. Trial delays are also increas- ing as criminal trials are getting precedence following Jordan, say lawyers, which means per- sonal injury litigation is falling to the back of the queue. Lastly, plaintiff-side lawyers say changes to the Ontario In- surance Act means the deduct- ible for general damages in au- tomobile accidents is increasing every year, meaning it's tougher for people injured in collisions to recover general damages from motor vehicle accidents than any other type of injury case. Heidi Bergeron says that, re- cently, for the first time in her eight years as a sole practitioner doing plaintiff-side work on personal injury matters, she has begun using various products to "stay on a level playing field" with the defence. "Files are not settling like they used to, the costs of reports have gone up — there's just a lot of pressure mounting financial- ly for plaintiffs," says Bergeron, who is based in Kingston, Ont. "It's changed the climate and how we practise as a result." Under the Insurance Act, the non-pecuniary loss deduct- ible for general damages in au- tomobile accidents increases every year. It is currently set at $37,983.33, according to the Fi- nancial Services Commission of Ontario. The right to recover future health-care costs is depen- dent on meeting a threshold of $126,610.07, which also increas- es every year, as set out in s. 267.5 (8.3) of the Insurance Act. Jasmine Daya, managing principal of Jasmine Daya & Co. in Toronto, who does plaintiff- side work, says the increasing thresholds make it more diffi- cult to recover damages without a deductible, and when there is a deductible, it's now higher. "It erodes what is left for the accident victim, which in turn impacts personal injury firms because we're on contingency fee arrangements," says Daya. "So, not only is the accident vic- tim getting less, but our fees are less as a result." Jwan Desai of Desai Law in Toronto, who acts for plaintiffs in personal injury cases, says that, in her experience, insur- ance companies would rather deter future claims at all costs than assess the merits of indi- vidual claims. "Given the specific changes in our area of insurance litigation and personal injury litigation [that benefits insurance compa- nies], there's an imbalance and it's an access to justice issue," says Desai. She says the current legisla- tion has emboldened insurance companies to put in a policy ap- proach to "bulldoze claims" and that there needs to be something to even out the playing field. Daya says some insurers are now using a "defensible ap- proach" that sees them refusing to pay plaintiffs who suffer soft tissue damage or psychological issues as a result of an accident. She says the approach by these companies has moved beyond motor vehicle accidents and is now moving toward slip-and- fall cases. "Insurance companies have lots of money. Plaintiffs' lawyers don't have as much as insurance companies, so they will drive the files harder and longer. Mean- while, we have to carry the dis- bursements," says Daya. "You have a lot of changes in the [Insurance Act] and the ben- efits that are available to injured individuals," says Desai. "Unfortunately, it's the in- jured party that's facing these thresholds, but it's not just the legislation — it's this [defensible approach] policy that insurance companies have taken that is driving up the cost of litigation." Daya says that, on a contin- gency-fee basis, plaintiff-side lawyers carry the costs of litiga- tion. It can take years to get a trial date in Toronto courts, she says, which means lawyers are forced to pay experts a second time for updated reports. "If you can turn to litigation funding, that is helpful," says Daya. "Banks have become very difficult." Bergeron says she has begun using disbursement insurance and would recommend it on her files. It is part of cost protection insurance, which gives plaintiffs more confidence to build their file throughout the process. Bergeron says she has signed on with companies that retain experts and allow for a deferred payment plan through the ser- vice. She says she uses these companies for the benefit of the deferred payments. Richard Nishimura, manag- ing partner of Menzies Lawyers in Ottawa, says the rising costs of disbursements essentially boils down to an access to justice issue. Nishimura says that larger firms have a better ability to absorb those costs and act like a bank for disbursements, and as costs increase, it makes it in- creasingly difficult for personal injury firms to sustain that, which is why alternate forms of financing enable litigation that may not otherwise be able to proceed. "These people have a viable claim in terms of the existence of negligence, but if they can't afford to get an expert and they can't afford to fund the disburse- ments, it's difficult in particu- lar for the smaller firms," says Nishimura. LT Heidi Bergeron says she has begun using various prod- ucts to 'stay on a level play- ing field' with the defence in personal injury litigation. FOCUS FOCUS ON Litigation Funding Canadian Lawyer Corporate Counsel Survey T H E A N N U A L What's your biggest challenge managing in-house? Growth of your organization? Recruiting? Legal costs? Weigh in on these and other issues. Survey is open August 6 – September 10 canadianlawyermag.com/surveys ATTENTION IN-HOUSE COUNSEL! ? Untitled-1 1 2018-07-12 4:06 PM

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