Lawyers' victims get payout after probe found gap in compensation system

I was directed to this story from a Toronto news webpage by a reader of this blog (thanks, webeye). Lawyers in all provinces carry insurance that is supposed to compensate a client if we are negligent and cost the client a financial loss. It's required in order for us to have a license to practice. When I read this article, I was shocked to hear how easily a lawyer in Ontario who has done something negligent could make it impossible for his or her client to collect on the insurance.

The insurer in Ontario - called LawPro - represents 50,000 lawyers but denies coverage when the lawyer fails to report the claim to them, or refuses to help defend the claim. To me, this is unbelievable and so unfair. Just by ignoring what's going on, the lawyer can prevent the client from receiving an insurance payout.

The story says that in 1997, the Law Society of Ontario decided to set up its own fund that helps clients who have been financially damaged by a lawyer's actions but who cannot get coverage from LawPro. This is not a well-known fund. Apparently it is obscure enough that most lawyers don't even know about it (I wasn't aware of it). The fund has received - and paid out - client claims.

To read the news story in more detail, click here.

I'm really glad clients are getting reimbursed for their claims. However, it seems to me that if your insurance coverage is so bad that you have to set up a fund to insure what it doesn't cover, you need better insurance.