Civil liability: litigation costs are up in Canada

At the request of Canada insurance office (Bac). Furthermore, the law firm Dentons has just produced a report in which we note that the costs of complaint in civil liability are up due to the judicialization of disputes. Furthermore,

“In Canada, dispute financing remains a largely unregulated speculative financial market,” emphasizes Liam McGuintyvice-president, bac strategy. However, If nothing is done. Therefore, this situation could further influence the Canadian corporate damage insurance market and increase the cost of business insurance. Furthermore, »»

Dentons has studied emerging North American trends in legal offices to determine what puts insurance complaints under businesses. However, There United States Chamber of Commerce estimated the cost of legal proceedings at 2.1 % of the gross domestic product (GDP) of the country, or $ 3,600 for each household. In addition,

In his report. However, entitled New trends in civil liability: litigation costs up business civil liability in the Canada insurance marketDentons notes three trends that contribute to social inflation in the United States and are now noticeable in Canada. Meanwhile,

It is noted in particular that in 2016 in the United States. Nevertheless, the total cost of compensation paid within the framework of collective shares amounted to $ 429 billion (G $), including 250 billion $ (or 58 % of allowances) for general civil liability of companies. Nevertheless,

Increased collective actions – Civil liability: litigation costs up

Even if the pressure is less strong than in the United States. Additionally, Nevertheless, we note that the number of collective actions has skyrocketed in Canada in the last decade. However, Disputes against pharmaceutical societies are cited in connection with the opioid crisis. Consequently, against manufacturers of “eternal pollutants”, perfluoroalkylas and polyfluoroalkylas (PFA), which contaminate drinking water sources.

This first trend is notably due to the growing expertise civil liability: litigation costs up of Canadian lawyers for applicants. The authors of the report also point out that governments channel resources to manage public health issues by means. of collective actions.

In Canada. the threshold required for the certification of a collective action is generally lower than before the American courts, which explains a lesser prevalence of mass tort liability actions. On the other hand. Ontario has changed its legislation in order to make certification more restrictive, which opens the door to mass disputes in this province.

Advertising of disputes – Civil liability: litigation costs up

The authors of the report explain this by the multiplication of advertising campaigns which. encourage people to join a prosecution. L’Canadian Bar Association Indicates that over the past 30 years, legal advertising has experienced significant growth. Recent disciplinary decisions have been rendered against lawyers for violation of the regulations relating to the promotion of legal services.

“It is insurance consumers civil liability: litigation costs up who, ultimately, pay the bill for legal abuses,” says McGuinty. “It is important to have a legal framework that deals with civil crimes. offers appeal to people who have been injured by the actions of others. »»

Funding by third parties

According to Dentons. it is important that governments impose regulatory measures to restrict the financing of disputes by third parties, because “this practice is diverted from its initial purpose, namely access to justice”. Financing companies are based on the judicial system to generate profits, underline the authors of the report.

For almost two centuries, the rules of common law applicable in the provinces outside Quebec prohibited the financing of disputes. The financing of disputes is increasingly common in the causes of arbitration. the insolvency procedures, the procedures intended to enforce intellectual property rights, disputes in the construction sector or commercial disputes between companies, the execution of judgments, civil liability: litigation costs up etc.

“The financing companies charge interest. costs on the advanced amounts, which encourages the applicants to claim higher allowances in order to compensate for the reimbursement due to the financing company, as well as the fees of their lawyers. The result is a vicious circle which gradually exerts upward pressure on the damages claimed. the amounts granted within the framework of disputes, “write the authors.

Dentons notes that Canada has not experienced the same type of increase in damages as in the United States. The authors of the report say they do not expect nuclear (more than $ 10 million). thermonuclear (more than $ 100 million) verdicts to be generalized at a level comparable in the next five years.

Bad faith

Damage to bad faith in Canada generally represents only a fraction of what they are. in the United States. The most important conviction to punitive civil liability: litigation costs up damage in Canada’s history was $ 1.5 million. It was granted in 2023 by the Ontario Court of Appeal in the judgment Baker c. Blue Cross Life Insurance Company of Canada.

“In Canada. an insurer can be considered to have acted in bad faith if he does not give a reason to refuse a compensation request, if he does not make an exhaustive investigation on a request, if he delays payments without legal reason or if he makes false declarations to the insured. These complaints are more difficult to establish in Canada, ”add tont experts.