Since the proliferation of adverse costs insurance through the
legal industry over the last few years, there have been a handful
of decisions in Ontario dealing with a plaintiff's disclosure
obligations with respect to such insurance policies.
Generally speaking, adverse costs insurance, sometimes referred
to as “Adverse Costs Protection” or
“After-the-Event Insurance,” protects a plaintiff
against the risk of an adverse costs award following an
unsuccessful trial.
Typically, the insurer will indemnify the plaintiff for the
defendant's costs awarded against the plaintiff, and
sometimes for the plaintiff's own disbursements as well, up
to the limits of the policy. Adverse costs insurance may insure a
specific plaintiff in respect of a specific action, or it may be
issued to a law firm in respect of all actions carried by that
firm.
