Articles and Cases

How to make the other side fund your lawsuit

In some cases the people you are suing can be ordered to fund the costs of your lawsuit before it is over. In order to do that the Court must be persuaded that your client's case is strong, that the ability to carry on the lawsuit by your client will be seriously compromised if the funds are not advanced, and that the other side has the resources to do so.

This procedure can produce an important leveling of the playing field in the right circumstances. I did this with two clients. In one case, a child custody case, the mother had custody of the child but little money to fight dad who was trying to win custody. The Court ordered the father to advance $15,000.00 to be used to pay for the mother's legal resistance of his claim.

In another case, my clients were the beneficiaries of a large estate, but were not receiving any money from it. They didn’t have the financial ability to fight such a wealthy adversary until the Court was persuaded to order the Estate to pay $150,000.00 to my clients to fund their lawsuit.

Homeless man recovers his share

My client was living in a homeless shelter when his mother died. She left behind a significantly sized estate. He tried to get his share but his brother and sister refused unless he agreed that the sister could be paid certain fees for administering the estate. He declined and we took them to court. The Judge awarded my client his proper share of the estate which enabled him to live better than he had been and the sister was ordered to pay his legal costs out her own pocket. As the court said she was not entitled to hold back any portion of the estate in order to extort an approval of her accounts.

Professional collects fees, Insurance Company helps.

My clients was an architect who was insured under a professional liability insurance policy. The policy stated that the insurer would defend the architect "in any civil suit" arising out of a claim for which coverage was provided by the policy. It also provided that the insurer would pay on the architect’s behalf all sums for which he became "liable to pay as damages arising out of a claim". The architect sued his clients for his professional fees. The clients claimed they could set off damages they had suffered from his allegedly negligent architecture against his claim for fees. This defence seriously complicated the architect’s lawsuit because it would require all kinds of expert evidence about the quality of his work and the condition of the building he designed. The architect asked the insurer to contribute to his legal cost in responding to the client’s defense that his negligence could be set off against their debt.

Specifically the insurer was asked:

a) to contribute to the legal defence of the client’s’ assertion of negligence; and
b) if the client was successful in establishing negligence the insurer should pay those damages to the client directly rather than the architect paying by a reduction in his fees.

The insurer took the position that it didn’t have to do anything. This was not a case, they said where the architect was actually being sued, he was just trying to collect his fees and the client was resisting that effort.

In court we argued that it made no difference if the allegation of negligence against the architect was made in response to claim for fee payment or in a separate lawsuit brought by the clients. In both cases, we said, the insurance policy required the insurer to assist. The court agreed and order the insurer to participate in the legal response to the clients’ allegations and to contribute to any payment the client might be entitled to as a result of the architect’s negligence. The Ontario Court of Appeal upheld this decision

 

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