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CDL submission on the Marshall Report
29 Sep 2017

On August 15, 2017 The province of Ontario  issued a bulletin seeking feedback and submissions regarding
Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario.

Below is Canadian Defence Lawyers submission on the Marshall Report




September 13, 2017 

CDL will provide submissions as commentary to the various recommendations of Mr. Marshall with additional commentary at the end.  

Report Pre-amble 

Out of brevity, we have condensed Mr. Marshall’s report to the following prior to addressing our recommendations:

Mr. Marshall identifies a number of problems:


CDL notes that the WSIB is a closed system and government run to some extent.  This may have a direct impact on outcomes and file cycle times, as cited by Mr. Marshall, owing to the different structure.  However, we agree with the premise that uncomplicated soft tissue injuries are found in both systems and offer a basis of comparison that shows the auto system takes too long for injured parties to get to recovery.  



Again, we point out that there are structural differences with WSIB, particularly with the Catastrophic definition, which increases the overall cost of assessments.  However, we agree that the attempt to control costs through a $2,000 cap on assessments has not had a positive effect on either cost or quality of reports.  The use of assessments in Ontario auto leads to the beginning a dispute and settling of a claim.  Our members see the impact of this, not only in Accident Benefits disputes, but also in the interface between AB and Tort disputes.  Fixing both systems together will be a key success factor in creating a sustainable auto insurance product.

As this number likely reflects how insurers track payments, the number may actually be higher.  As much as 30 to 40% can go to the claimant’s lawyer in a contingency arrangement.  As these payments are not transparent, it is unknown how much money this may be taking from injured claimants.  


Review of Marshall Report Recommendations (and commentary) 

1. The government should not move to a government-run auto insurance system at this time. There is an opportunity to learn from past experience and fix the problems in the current auto insurance delivery system in Ontario as described in this report. 


CDL agrees.  


2.  Ontario’s current No-Fault Benefits should not be reduced.

CDL agrees, and indeed, it would appear that absent a recognition by the Ministry of Health that it will bear additional expense for the treatment of Catastrophically injured car accident victims once their accident benefit proceeds run out, the limits have been reduced too much for the most seriously injured accident victims already. 


3.  The Regulator should undertake serious discussions with the Ministry of Health and Long-Term Care to develop a service for lifetime management of care for seriously injured accident victims. Eventually, as the Province develops this expertise, the expertise and even services could expand to address other injuries outside of the auto insurance system. This would allow for continuing improvements in care to develop and recommendations for preventative measures to be generated while ensuring that patients are being treated by a reliable and sustainable system.


One of the recurring themes in Mr. Marshall’s report is the failure of integration within the auto system.  Whether it is the interface between OHIP and insurance benefits, the interface between AB and Tort or how auto works with other collateral benefits, injured claimants are not being well served by the current system.  It is anathema that those suffering spinal injuries in diving accidents or trips and falls do not get pressured to leave hospital within a week of injury, yet MVA victims do, on the guise that there is an insurer there to fund rehabilitation costs in private facilities.  Injured Ontarians should get the same treatments from the Province regardless of the source of their injury and their status as an auto insured.  Auto insurers should not be seen as the "first payor" of primary health care.  CDL agrees with this recommendation and feels it dovetails with the creation of similar spinal modalities between MVA and non-MVA accident victims.  Particularly for Catastrophic cases, CDL would like to understand the ultimate cost as that will have an impact on cost of the product.  


4.  There should be a minimum of disputes and delays in accessing single lump-sum awards for those who are Catastrophically injured.Such awards, should be efficiently and quickly determined by an Independent Examination Centre and based on objective measures, such as the American Medical Association guide, supplemented, where appropriate, by specialized and well -established guidelines.


5.  Insurers should make sure that seriously injured persons are given top priority and do not need to hire lawyers or other professionals to get their entitlement.


CDL agrees with Mr. Marshall that Catastrophically injured persons should not encounter roadblocks to get appropriate levels of care.  They should also not be subject to compromised settlements that may undercompensate them for their true expenses, given the propensity for legal fees to be part of that settlement.  The system needs to be simpler so that there is no conflict between insurers and their clients that requires a lawyer, particularly in serious injury cases.  One roadblock we can see is the pressure and delay on Accident Benefits created by Tort claims and the lawyers involved in them.  We are happy to work with this recommendation to help delineate and separate AB and Tort to prevent this friction that just causes delay for accident victims and insurers.  


6. The regulator should move as quickly as possible to create programs of care for the most common types of automobile injuries.The programs should be based on the evidence based findings of the Common Traffic Injury Guidelines.

It is CDL's view that care must be taken in delivering on this recommendation.  The MIG has been very successful in halting much abuse from facilities, paralegals and other unscrupulous actors in the system.  However, that is because the MIG benefited from tight language where there were relatively few opportunities to exit the MIG.  If CTI is vague and amorphous, it will lead to further abuses which will actually create more exposure on claims rather than less.  This would negatively impact on premiums.  CDL’s members have been involved in the disputes involving minor injury and would be happy to share our experience and expertise in this area to help identify areas of potential friction within programs of care.   

7.  The regulator should be provided with a sufficient budget to monitor and continuously improve the outcomes of existing programs of care and partner with the government on research into the development of new programs of care as the need arises – for example, for neurological injuries, injuries from concussions, spinal cord injuries, chronic pain and post-traumatic stress disorder.Consideration should be given to leveraging existing programs of care that have been developed by other jurisdictions.


8.  The government should empower the Regulator with the authority and direction to establish a roster of Independent Examination Centres (IEC) which should be hospital-based and must be able to provide a multidisciplinary team to provide appropriate diagnoses of injured patients and recommended treatment plans.


The former DAC system ultimately did not work for several reasons including governance, supply and demand, regional issues and differences and a lack of deference.  While DACs were viewed as biased towards the insurer, it was the experience of CDL members that both insurers and claimant’s counsel did not support the system.  This recommendation will be one of the most challenging to implement because both insurers and their clients must accept the decision as final in the majority of cases.  Some key success factors will include :


  1. The Regulator creating an independent system that is transparent;
  2. All regions having the same experience and benefit;
  3. Successful quality control and tracking to ensure the integrity of the system;
  4. Preventing the proliferation of claimant or insurer generated reports that challenge the decision, and
  5. Deference by Judges on appeals


CDL has concern about the negative impact this recommendation could have if the system is not well designed and successfully implemented.  However, we do like the move from a system where reports support one side or the other to one where IECs focus on the claimant’s progression and recovery.  


Insurers must follow, without dispute, the recommendations of the IEC for future treatment within the financial limits of the insurance policy as provided by law.  The dispute resolution process must respect the evaluation of the IEC without resorting to competing opinions from either party to a dispute.


CDL notes that this type of deference could lead to Judicial Review of the IEC decision and this should be considered when drafting the enacting legislation.  CDL and its members would be happy to support the process of drafting these sections as we have extensive expertise in both Administrative Law and the triggers for Judicial Review, which may be helpful in avoiding these challenges to the IEC.  


9.  The Regulator should conduct regular quality control studies of the outcomes of Future Care recommended by IECs to monitor the quality of such recommendations and ensure their effectiveness.As part of this process, the Regulator should consider instituting a system of professional peer review of roster assessors to ensure quality is maintained.


10. The Regulator should undertake a complete overhaul of the pricing schedules for treatment by providers and evaluators to bring them more in line with prices being paid by other similar bodies, such as Workers’ Compensation Boards, and to emphasize outcomes rather than the number of treatments.


CDL agrees.


11.  There should be no cash settlements in the Accident Benefits portion of the Ontario auto insurance system for those benefits specified in the legislation as being for Medical and Rehabilitation care.Where the legislation provides for cash payments, for example for lost wages and lump-sum payments for Catastrophically injured persons, these would, of course, continue to be paid.


While CDL agrees with this recommendation, the major hurdle it will face, which is not addressed in Mr. Marshall’s recommendations, is the Collateral Benefits offset of Accident Benefits to Tort claims.  CDL feels that this is a part of our current system that does not work.  Currently we use a process of Assignment of benefits which pits insurers against claimants and each other and leads to arguments over whether tort heads of damages match with AB benefit payouts.  CDL would recommend that the Government look at a system where there is clear flow through of the value of benefits from AB to Tort and no Assignments are necessary.  If a claim is worth 2 million dollars in Tort, then the 1 million of AB coverage would be deducted automatically and on the front end, instead of being dealt with by Assignment after trial.  


12.  There is clear urgency to make the Accident Benefits system simple and accessible without the need for legal representation. Since accident victims are in a vulnerable position and contingency-fee arrangements are not very transparent, the government should consider:


CDL has been recognized for its submission to the Law Society of Upper Canada regarding Contingency Fees and continues to work with the legal industry on this issue.  CDL agrees strongly with this recommendation as it is a challenge which our members face every day in the negotiation of Settlement Disclosure Notices in Accident Benefits claims.  

CFAs on AB claims are generally too high where there is limited risk in prosecuting a no fault claim.  Taking 30% of a $1M Accident Benefit cash out is hard to justify if there is no "heavy lifting" required by counsel to secure such a settlement, and yet it seems to be happening.


13.  The Regulator should monitor the overall use of legal representation in the Accident Benefits system to analyze why claimants are needing to resort to legal advice. Also, the Regulator should examine if the system should be further simplified, barriers should be removed or other practices changed to reduce the need for the time and expense of legal involvement.

For this recommendation to be successful, the product itself must be simplified significantly.  Our current system is too complex and this leads both insurers and claimants to seek legal representation.  To the extent that this recommendation coincides with a wholesale simplification of the SABS, we support it.  However, we feel strongly that significant reform on the complexity of the product must occur first for this to be meaningful.  


14. The Regulator should monitor, on a continuous basis, the length of time insurance companies are taking to provide benefits to claimants and determine if undue delays are causing financial harm to accident victims.


15. Insurers should be required to establish an internal appeal process to provide an early resolution to claims and reduce the number that have to proceed to the external dispute resolution system.The Regulator should monitor the effectiveness of the internal appeal process and be empowered to order corrective action if a particular insurer is generating an unusual number of claims to the dispute resolution process.


From the perspective of CDL, an internal review system would likely divert some claims from the dispute system.  However, to do so would have a cost to insurers in set up and maintenance.  While this is a good idea, more study should be done to confirm that this is a cost effective approach that will ultimately benefit the system.  Otherwise, internal review may not achieve its goal of lowering costs and diverting claims from dispute.  

One practical concern is whether claimant’s counsel want to settle part of the AB dispute in this way.  There is a practical benefit to them to keep the AB open if there is an ongoing Tort claim.  As mentioned before, this interface between AB and Tort would need to be addressed first for this recommendation to be successful.  


16.  The gatekeeper function at the Licence Appeal Tribunal should insist that a claim has gone through the insurer’s internal appeal process before allowing it to proceed further.The gatekeeper should also determine that, if new information is being introduced in the claim, it should go back to the original decision-maker to see if it changes the decision before the appeal proceeds.

CDL supported Justice Cunningham’s recommendation for a gatekeeping function at that LAT to keep claims that were unready from entering the system.  Likewise, CDL supports this recommendation but we do not feel it needs to be linked to the internal review process which will take time to implement.  We have also made submissions in this regard above.  This should be considered in any implementation. 

If there is one immediate fix that can be implemented to the system, which should save on litigation costs, it is the requirement of the LAT to actively engage in a gatekeeping function.  Implementing the gatekeeping function at LAT would keep unmeritorious disputes out of the system.  


17. In relation to medical condition and treatment, the opinion of the Independent Examination Centre should be taken as definitive by Arbitrators. If, in exceptional circumstances, the Arbitrator has reason to be concerned about the Independent Examination Centre opinion under consideration, the Arbitrator can ask for a second opinion from a second Independent Examination Centre from the Regulator’s roster.Competing examination opinions from experts hired by either the claimant or the insurer should not be permitted.


18.  There is an urgent need to revise and simplify the legislation and current set of regulations and focus on desired outcomes and less on the details of process.

CDL agrees. 

19. The new Regulator should be given authority to make regulations (already underway).  Rules should support insurers to be in direct contact with their clients so that they can manage care and recovery for their clients.


CDL agrees.  The Regulator is in the best position to act quickly to correct parts of the system that are not working and they have an expertise in the area.  The Regulator’s guidelines in this area should also include a mandate to simplify the system for consumers wherever possible and not add complexity.  


20. Consumer education in the field of auto insurance is a key component of a well-functioning system.In conjunction with making the rules and regulations governing the system simpler, the government should seriously address the need for enhanced consumer education. The recommendations of the Ontario Auto Insurance Anti-Fraud Task Force and the creation of an “Office of Driver Adviser” should be considered.

21.  Repeal subsection 233 (2) and amend 233 (1) so that SABS claims and Tort claims are subject to exactly the same rule that applies to other auto insurance claims.

CDL agrees.  

22. The government should consider implementing ways to make the system for automobile accident Tort claims more streamlined, particularly:

CDL agrees.   

23. The Regulator should monitor the awards and costs of the Tort system to determine if changes need to be made to the No-Fault system to avoid having to sue under Tort and to recommend changes to the Tort system if costs appear to outweigh benefits from a public policy point of view.

CDL Members find it interesting that Mr. Marshall is making a link between AB and Tort damage awards.  This suggests to CDL that Mr. Marshall recognizes the problems with our previous reforms, that being they did not consider how change in the first party system(AB) can have a dramatic and unexpected impact on the third party system (Tort).  We agree with this as it is a good start but much more needs to be done to clarify this interface.  Historically, the "wait and see" approach has not benefited the consumers as problems magnify and this leads to more reforms.  CDL thinks a very agile and proactive Regulator is a necessity to make this recommendation meaningful.     

24. The Independent Examination Centre’s opinion as to the claimant’s medical diagnosis and future care needs, should be given a zone of deference by the courts in Tort cases.  This means that the opinion of the Independent Examination Centre should be taken as definitive unless there is compelling reason to doubt it.

CDL finds this recommendation interesting as there is an obvious link between minor injuries and the Threshold in tort, despite there being two separate definitions.  The recommendation seeks to craft a regulation that compels a Court to grant deference to the findings in the report.  This will be very difficult to do.  Judges have inherent jurisdiction over the interpretation of law and are subject only to appeal.  This is a daunting task.  

CDL points out that most personal injury actions in Ontario are heard by a jury instead of by judge alone.  Many plaintiff’s lawyers seek to remove access to juries in Ontario; however, juries represent the community perspective in their damage awards and are an integral part of the system.  A key success factor will be to analyze how this zone of deference may apply in the context of a jury trial.  CDL has participated in the recent process reviewing the use of Juries in Simplified Rules cases and has specific insight on this issue. 


25. There should be full deductibility of Accident Benefits awards from tort awards.

CDL agrees that there are too many disputes over what is deductible from AB to Tort.  We support defining the interaction between AB and Tort clearly so that first party benefits are about recovery and Tort is about compensation.  If there is an entitlement in AB, there can be no recovery for the same benefit in tort, from the outset.  That way, both systems can stand alone with their own focus.  Greatly reducing Contingency Fees in Accident Benefits and restricting the buildup of the AB claim so it can be used in the Tort claim, will keep lawyers out of the system and decrease disputes.  


26. Contingency fees in Tort cases should be made fully transparent to the client, including notification that fees can be appealed.

CDL agrees.

27. Claimants should be informed in writing, possibly on a final settlement schedule, of their right to appeal the fees charged by their lawyer.

CDL agrees.

28.  Settlement cheques should be made payable jointly to the claimant and his or her lawyer to allow the claimant to fully understand and accept the disposition of the funds.

We agree.

29.  To the extent possible, the regulatory regime should be overhauled to encourage insurers to innovate and introduce new products even on a trial or experimental basis.

30. The government should undertake a comprehensive review of auto insurance pricing alternatives with a view to providing more competition in the marketplace.

31. A new, independent Regulator with its own Board of Directors for automobile insurance be established either as part of the new Financial Services Regulatory Authority or a new separate office specifically for auto insurance.

32.  The Insurance Act and regulations should be amended to include only broad principles and entitlements for benefits.The Regulator should be responsible for interpreting the legislation and, following appropriate consultation with stakeholders, creating policies, guidelines and rules that are enforceable and not subject to challenge in the courts as long as they are in keeping with the letter and spirit of the legislation.

33. The new Regulator needs to be equipped with the staff and expertise to act as a central governor over the automobile insurance marketplace including the conduct of all the players and providers within that marketplace.

34.  The new Regulator should be required to set standards of performance for the marketplace and to be accountable to the government for meeting those targets.

35.  Insurance companies must change their role from managing costs to delivering care to their customers.They will need to change their claims management and related practices in the process.They will also need to innovate and compete on service and cost.

CDL, through defence of the public on Tort claims and representation of insurers on Accident Benefits claims, has seen the impact of the successive auto insurance regimes on the Ontario consumer.  The system has become complex and unwieldy, without injured claimants seeing the benefit.  It is time for a reset of the system and CDL members support this but great care must be taken in doing so to ensure a workable fix.  

We agree that insurers should focus on getting people better and getting them necessary treatment faster.  Health care has always been the primary role of the Ontario government through the Ministry of Health and Long Term Care.  To the extent that Mr. Marshall suggests that there be a greater integration between government and auto insurance, we agree with these changes.  We also see where government/Regulator defined programs of care and government run IECs can benefit the system if successfully implemented.  These keep the Ontario government as the primary provider of care for the Ontario public.  Insurers would then administrate these programs will a clear focus on getting people better.  


We stress that clarity on the interface between AB and Tort is a major source of friction within the system. 

Insurers have another important role to play in defending drivers under their third party liability coverage.  We cannot lose sight of this role in an attempt to fix the first party Accident Benefits system.  Accordingly, care must be taken in considering any changes to the two systems.  The friction that exists today causes delay and disputes that drain resources and increase costs.  If insurers are to focus on care in AB then the rules in Tort should reflect this change.


The Canadian Defence Lawyers



Sandra Corbett QC to Receive DRI's Mary Massaron Award
25 Sep 2017

Sandra Corbett QC, Field Law LLP

This nominee shall be a DRI member who has demonstrated a high regard for diversity by demonstrating two or more of the following:

  1. A commitment to the spirit of diversity and, in particular, the inclusion of women, through its outside counsel panels;
  2. Behavior which illustrates commitment to inclusion of women within the institution;
  3. Demonstrated dedication and commitment to advocating the inclusion and promotion of women in the legal profession through activity that has a visible, tangible, or measurable impact on the perception of, attitude toward, respect for, and treatment of women;
  4. Leadership in the development of contemporary measures to fight gender discrimination and prejudice in the profession;
  5. A commitment to fostering women’s initiatives and actively promoting positive mentoring relationships with other women in the legal profession.

Sandra's practice focuses on resolution of complex tort and liability matters in the civil and commercial litigation areas, with an emphasis on insurance defence litigation. She defends high-exposure claims arising from product liability, municipal and school liability, serious accidents, fire loss, and business interruption. She also defends insurers in insurance coverage disputes and regularly provides advice to U.S. law firms and manufacturers requiring cross-border litigation assistance.

CDL Board of Directors 2017-2018
15 Jun 2017

CDL is proud to announce the new Board of Directors for 2017-2018, as confirmed by the members at the Annual General Meeting in Toronto on June 8, 2017

You can view the current CDL Board Members by clicking HERE

Lee Samis Award of Excellence
8 Jun 2017

CDL is proud to announce the winner of the Lee Samis Award of Excellence - Mr. Clarence A. Beckett Q.C. of Patterson Law in Truro Nova Scotia. A public celebration will be held in Nova Scotia at a later date.


Clarence Beckett takes pride in offering over three decades of exceptional legal experience to his clients. He practices in the areas of Civil Litigation and Insurance Law with an emphasis on defence. Clarence has served as Patterson Law's managing partner, Litigation Group Chair, and Insurance Litigation Practice Group Regional Chair. He has made appearances in all Courts in Nova Scotia as well as the Supreme Court of Canada, has taught the insurance section of the Bar Admission course and was recently selected to be published in Lexpert, Canada's respected legal directory. Clary has been recognized in Best Lawyers  since 2006, and was honored as a "Lawyer of the Year" in Personal Injury Litigation in 2010, in Insurance Law in 2012, and Legal Malpractice Law in 2013. He has been recognized as a "Local Litigation Star" by Benchmark Canada Litigation since 2013.

Exceptional Young Lawyer Award
8 Jun 2017

CDL is proud to announce the winner of the Richard B. Lindsay Q.C. Exceptional Young Lawyer Award was presented to Jason Robert Frost , Schultz Frost LLP

Jason was presented with his award at the CDL Annual General Meeting on June 8, 2017 

Jason focuses his practice on insurance defence litigation. He has motion, arbitration, trial and appeal experience at the LAT, FSCO, WSIAT, Superior Court and Court of Appeal. Jason has particular expertise with accident benefits claims, loss transfer arbitrations, priority arbitrations and WSIAT applications. He also specializes in examinations under oath, investigating and prosecuting claims fraud, as well as managing accident benefits litigation risk.

Civil Justice Reform
18 May 2017

CDL participated in consultations with the Ontario Bar Association on Civil Justice Reform, resulting in this letter to the Attorney General.

Click HERE to view the letter.

DRI Massaron Award
16 Jan 2017

The DRI Mary Massaron Award for the Advancement of Women in the Legal Profession. This award is created for a person who stands as an innovator and role model and one who has made significant efforts to advance women in the legal profession. The award is presented to a DRI member who has demonstrated a high regard for diversity and a commitment to advocating the inclusion and promotion of women as well as fostering women's initiatives and actively promoting positive mentoring relationships with other women in the legal profession.

Sandra L. Corbett Q.C

Field Law LLP

Edmonton, Alberta

Rule 76 Simplified Procedure
15 Dec 2016

December 15, 2016

Civil Juries Under Ontario Rule 76 Simplified Procedure

Canadian Defence Lawyers (CDL) is pleased to be granted the opportunity to make submissions on the Ontario Rule 76 Simplified Procedure request for consultations on jury trials.

CDL is a national association of civil defence litigators with members in all Canadian provinces and territories. We speak for a membership of over 1,400 lawyers across Canada (and about half our members are lawyers practicing in Ontario). For the most part, our members’ clients are corporations, including but not limited to insurers, self-insured companies and reciprocal defence associations.

Membership Survey by Canadian Defence Lawyers

To provide the most useful information for this consultation, Canadian Defence Lawyers conducted an online survey of its entire Ontario membership. The response to this consultation was very enthusiastic. Our comments set out in this report summarize the views of all the respondents. Attached to our report are our members’ actual substantive responses.

Click HERE to view the report

Shape the Future of Canadian Insurance Law
7 Dec 2016

Queen’s Law is delighted to announce a Graduate Student Fellowship in Insurance Law at the
Queen’s University Faculty of Law.

The successful candidate will pursue doctoral (PhD) or masters-level (LLM) studies under the
supervision of Professor Erik S. Knutsen on an insurance law topic related to Professor Knutsen’s
research project on Canadian and comparative insurance law: Floods, Fires, Crashes: Resolving Post-Disaster
Insurance Coverage Conflicts in Canada. The project is federally funded by the Social Sciences
and Humanities Research Council.

For doctoral students, he or she may be awarded up to $40,000 in funding for up to three years of
the PhD program ($35,000 scholarship plus a $5,000 Research Assistantship). For masters students
(LLM), she or he may be awarded up to $30,000 in funding for one year of the LLM program
($25,000 plus a $5,000 Research Assistantship). Preference will be given to PhD applicants.
Insurance law affects almost every Canadian through its many facets: commercial, property, liability,
automobile, life, health and more. Queen’s Law is proud to provide this opportunity for advanced
studies in this area.

All applicants to our graduate program who propose to pursue research on insurance law will be
automatically considered for this Fellowship. The deadline for applications for graduate studies at
Queen’s Law is February 15, 2017.

For more information about the Fellowship, or about pursuing PhD studies at Queen’s Law,
please visit, or write Dianne Flint,
Graduate Studies Assistant, at

Queen's University Faculty of Law Kingston, ON Canada 613-533-2220


Advertising & Fee Issues Working Group
3 Oct 2016


130 Queen Street West

Toronto, ON

M5H 2N6

Attention: Juda Strawczynski

Dear Mr. Strawczynski:

Re: Advertising and Fee Issues Working Group, Call for Input

The Law Society of Upper Canada’s Advertising and Fee Issues Working Group is seeking input from the profession. (Ref. Canadian Defence Lawyers (CDL) is pleased to offer the following input.


CDL is an association of civil defence litigation lawyers with members in all Canadian provinces and territories. We speak for a membership of over 1,400 lawyers across Canada. CDL is affiliated with the Defense Research Institute, a U.S. association of defence lawyers boasting over 22,000 members. For the most part, our members’ clients are corporations, including but not limited to insurers, self-insured companies and reciprocal defence associations. Through a Joint Education Committee and Roundtable Committee, CDL has a privileged leadership role in sharing insurance industry information, claims practices and education with the Canadian Insurance Claims Managers Association and the Canadian Independent Insurance Adjusters Association.

Our members in private practice are not precluded from acting for personal injury clients, but none of our members are under the commercial pressures of a volume plaintiff personal injury practice. Perhaps because of the defence practice, our members in centres across Canada are courted for referrals from plaintiff injury firms. Indeed, CDL cooperates extensively with its main plaintiff counterpart, the Ontario Trial Lawyers Association (OTLA). To its knowledge, CDL does not believe any of its members operate as a business model a referral-fee based practice.

CDL members can therefore provide a unique perspective on these emergent regulatory issues concerning the consumer protection, because they generally act for the adversaries of the consumers of personal injury law. Lawyers practising in the area of civil defence litigation are usually acting for sophisticated consumers of legal services. The objective view from across the negotiating table, tribunal hearing room or the courtroom is seldom articulated to members of the plaintiff bar or to the regulator, because of the confidential and closed nature of the institutional defence retainer. The Public will not see CDL members holding scrums for TV reporters at the court house steps publicizing how little their clients had to pay out to someone injured in an accident, or advertising on talk radio stations expressing empathy for their corporate clients. Defence lawyers’ mandate is to contain and reduce claims and litigation, not to encourage demand in the legal market or seek publicity. Our members do not sell litigation, but rather an end to litigation.

Despite the adversarial role our members play in relation to plaintiff personal injury lawyers, CDL members are proud to foster lasting collegial relationships with their plaintiff counterparts as part of striving for just and fair results for the clients of CDL members. The commercial aspects of retail personal injury law do have an impact on our members’ ability to work on litigation efficiently and to settle claims based on objective, evidence-based norms and standards. CDL members are therefore aware of the impact that the commercialization of retail practice has on the legal process.


CDL’s response to the Law Society’s Questions for Consideration are as follows:

1. Advertising and fees in real estate law.

CDL does not express an opinion on this subject.

2. Contingency Fees

In consulting with our membership, we asked the following questions, with a view to obtaining answers that deal with the topics raised by the Law Society:

How can contingent fee structures, including the total costs associated with contingent fees be made more transparent to consumers at the outset? Should lawyers and paralegals typically operating on contingency fee arrangements be required to disclose their standard arrangements, including their usual contingent rates and arrangements with respect to disbursements on their websites? How is the Solicitors Act operating in practice?

The CDL members responding to our survey voiced the need for greater standardization and transparency, while at the same time respecting solicitor-client confidentiality. One member pointed out that it was not long ago that the Law Society was sanctioning retail law firms for posting their fees for standard services. Indeed, previous strict limits on advertising until late in the 20th century were a paternalistic way of protecting an unsophisticated public from hiring lawyers based on their own ideas of what they wanted in a lawyer. In fact, the limits protected traditional referral networks ("I’ll scratch your back …") and prevented new lawyers, especially women and those from diverse and racialized backgrounds, from directly marketing their expertise to the public. These arguments are part of the historical debate, and there is no need to revisit the basic concept that lawyers should be allowed to advertise as part of the mandate to inform the public about their rights. The right to advertise is a constitutionally protected form of speech, and there is no turning back that clock.

New Brunswick is a jurisdiction in which a standard-form contingency fee agreement has been adopted by the law society. The diversity of cases as well as the established experience with contingency fees in Ontario would likely make a mandatory agreement cause more difficulties than the problems it would solve. Nevertheless, coming at the problem from the consumer perspective, there is a need to overcome a general lack of public understanding of how contingency fee arrangements are regulated under the arcane legalese of the Solicitors Act requirements.

Given that the plaintiff bar has employed widespread conventional formulae for engaging with the defence bar on settlements, there is no reason why the Law Society cannot impose minimum expectations for contingency fee arrangements, in order to level the bargaining positions between clients and law firms when negotiating a retainer. The Law Society can also provide explanatory public information in the form of website information and brochures for use in law offices. This is the type of effort needed to restore public confidence in the balance between the commercial interests of lawyers and the ethical obligations created by lawyers contracting with vulnerable parties.

CDL has watched with interest the class proceedings in Hodge v. Neinstein, where the issue is the ability under s. 28.1 of the Solicitors Act of a lawyer to collect costs in addition to a contingency fee, without prior approval of the court. CDL members have pointed out three (perhaps dissociated) problems with this provision in the Act as currently formulated:

o The requirement for prior judicial approval interferes with the freedom of contract and creates a disincentive for lawyers to work on and advance personal injury claims where liability may be strongly disputed but damages are likely modest. In such instances, the ability to recover a contingency plus partial indemnity costs would reflect fair remuneration for the lawyer’s efforts and allow access to justice for accident clients who do not have permanent or catastrophic injuries. The potential for abuse can be accomplished by reversing the onus from the solicitor to the client, to complain to the court as opposed to requiring prior court approval.

o If costs are paid to the lawyer in addition to the percentage of recovery, the practice offends the indemnity principle of court-awarded costs and thus artificially drives up the settlement value of every claim in which there is a contingency fee arrangement. Claimants and lawyers are encouraged to inflate damage assessments, to employ future care and other damage assessors with an incentive to facilitate inflated claims, and to delay the resolution of claims until after lengthy and costly examinations for discovery.

o There appears to be no consistent standard on the recovery on which the contingency fee is calculated. Is the rate to be applied to damages and interest only, or is it applied to damages, interest and costs? Whatever solicitors and clients bargain for, the result must be fair and reflect the indemnity principle of costs.

These problems also involve potential conflicts of interest between the lawyer and client between the economic interest of lawyers and their clients’ interest in obtaining fair and prompt settlement of claims. Although the responses from our members are, on the surface, contradictory in some respects, they can be reconciled if the unifying law reform goal is to allow solicitors to be paid for their effort in bringing modest claims, without causing inflation of more significant ones. Most likely, the use of a plain-language and standard contract template with multiple options would allow lawyers to adapt permissible contingency fee arrangements to allow modest but meritorious cases to be advanced, while not distorting the economic incentives in the case of cases involving catastrophic damages.

3. Personal Injury Advertising

In consulting with our membership, we asked the following questions, with a view to obtaining answers that deal with the topics raised by the Law Society:

Personal Injury Advertising: Where a significant portion of the revenue generated by advertising is from referral fees, should the advertiser be required to advertise on that basis, making it perfectly clear that the advertiser may not itself provide the legal services and in such a case may refer clients to others for a fee? In the alternative, should advertising for the purpose of obtaining work to be referred to others in exchange for a referral fee simply be banned?

Advertising second opinion services: Do current requirements balance consumer rights with maintaining professionalism around providing second opinions? If not, should the provider of the second opinion who advertises or markets "second opinion" services be prohibited from taking on the cases where a second opinion is given?

Much of the law firm advertising in major centres is geared toward name recognition, not public legal education about their right to pursue compensation from tortfeasors. Indeed, "victims" are often encouraged to sue despite the absence of a legal cause of action against any defendant. It is for this reason that most advertising in public spaces is purchased by personal injury firms and referral firms: to create demand for legal services, not simply to inform the public that legal services are available. Much of it is presented in poor taste. However, regulation of taste has always been fraught with many perils, not the least of which is the wide latitude for commercial speech protected by s. 2(b) of the Charter. Anecdotally, CDL members are aware of concerns among their plaintiff counterparts that questionable advertising by law firms may have the effect of lessening the credibility of lawyers appearing before juries. Most likely, it would be a waste of revenue from members’ levies to police good taste if the plaintiff bar regulates itself through these corrective "market" effects.

CDL members surveyed did express considerable concern over the ethical dimension of advertising by referral or injury brokerage firms. Many were of the view that such advertising should be banned outright, as opposed to regulating the practice. Others expressed the view that the practice should be permitted, provided the public is made aware in a clear manner that the sponsor of the advertising will be making a referral for a fee. The rationale behind the calls for a ban is that of bait and switch, an unlawful commercial practice under competition and consumer protection law. Bait and switch is a concept members of the public readily understand. That lawyers seem to be allowed to get away with a breach of consumer law derogates from the public image of lawyers.

This discomfort would be mitigated if advertisers were required to be clearer in stating their role in the legal marketplace. Transparency would also have the effect of encouraging lawyers to whom referrals are made to establish at least a minimum level of relationship-building and empathy with their clients, as opposed to the impersonal commoditized relationship between a service provider and a referred customer. A personal injury law suit is not like installing a pre-fab kitchen or a ride to the airport. It should not be a commodity, but rather a legal proceeding dealing with people when they are most vulnerable. The reason this is of importance to CDL members is that defence counsel need to engage with their counterparts with some level of confidence that personal injury plaintiffs have some reasonable expectations of possible outcomes of the legal process for the purpose of pretrial disclosure and settlement.

CDL is concerned about advertising for second opinion services in the personal injury field. There is no evidence that consumers of legal services are unaware of their right to consult another lawyer if they are unsure whether their current lawyer is advising or representing them in the best way. Our members voiced the opinion that it appears unethical for lawyers to advertise legal services on the basis of seeding dissatisfaction with clients’ current lawyers. If the Law Society were to restrict advertising of such services on that basis and charge a fee for that service but should not be able to take on the case in which they have given an opinion. Nor should the Law Society permit lawyers to accept a referral fee after a second opinion prompts the client to seek a referral to different counsel.

4. Identification of Type of Licence

The following response has also been informed by responses to the questions posed in Topic #3:

Protection of the public means the elimination of confusion in the legal marketplace. Not only should paralegals identify themselves as such, they should avoid confusing words such as ‘Law Office,’ ‘licensed to provide legal services,’ and the like.

In the personal injury field, there is potential for conflict of interest or disservice where clients might be short-changed into pursuing a smaller claim within the Small Claims jurisdiction when their injuries might in fact require an action in the Superior Court.

5. Use of Awards

The following response has also been informed by responses to the questions posed in Topic #3:

Awards recognizing legal excellence should never be available for sale or tied to the purchase of advertising. The Law Society should investigate the market in questionable awards, not only in personal injury but throughout the legal profession.

CDL itself confers two awards on deserving members:

The purpose of these awards is to recognize and encourage a career based on lifelong service, collegiality and excellence. Commercial concerns to not play a factor in selection. Given the fact that defence lawyers are often called on to take positions that are not popular, there is no element of "people’s choice" or questionable public input based on "likes."

For its part, OTLA confers various awards on members and holds an annual event to celebrate the accomplishments of both plaintiff and defence lawyers ( While it is possible some of the recipients of recognition from OTLA are also recipients of tabloid advertising awards or ‘rate my lawyer’ websites, the lists of recipients do not appear to name lawyers or firms whose advertising appears in public spaces associated with the words ‘Top Rated’ or similar expressions.

There appears to be a disconnect between lawyers actually recognized through real committees of peers, and the lawyers and firms promoting themselves as being highly rated or achieving the best results. If there were not such a divergence between actual deserving lawyers and those advertising themselves as deserving, there would be no need for the Law Society to scrutinize this area of lawyer and law firm advertising. However, this divergence does appear to exist and constitutes a potential harm to the public in diverting consumer choices toward firms boasting about successes and away from those actually achieving them while maintaining a threshold level of professionalism.

6. Referral Fees

The following response has also been informed by responses to the questions posed in Topic #3:

The practice of referral fees remains controversial because it is a safety valve against lawyers holding on to files in which they are out of their depth. CDL members surveyed identified the potential for members of the public to feel deceived if the arrangement is not properly informed of referral fees. Some have recommended putting an end to the practice, while others voiced the view that percentages should be capped.

In order to maintain referral fees for the beneficial purpose they serve, without eroding further public confidence in the provision of legal services in the personal injury sector, the Law Society should require greater information and transparency. Negative public perceptions of professions arise from the notion that someone might be making a secret profit out of a transaction. If there is an active expectation on the part of the referring lawyer, the onus should be placed not only on the lawyer receiving the referral but on the referring lawyer to explain to the client that the referral may result in a financial reward to the referring lawyer, without increasing the overall fee. This type of sharing of information would be seen as invoking a higher level of professional integrity than among realtors, interior designers, and other sectors where referral fees are common but rarely disclosed. The Law Society should also consider caps, either on the rate or the total amount, or some combination of both. This way, the referral fee would compensate the referring lawyer for the commercial value of the referral and the work that goes into a pre-retainer interview, but not more.


David W. Festeryga

President, Canadian Defence Lawyers

Compiled and prepared by: R. Lee Akazaki Board Member, Canadian Defence Lawyers

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