Insurance firms are using hard-line tactics, in-house counsel and favourable laws to their favour
Seismic changes to personal injury laws over the last several years have meant law firms who practice in this area need to be innovative about how they find and take on cases, panellists at a Canadian Legal Innovation Forum webinar heard recently.
It also means developing strategies to get the most for their clients in an environment where insurance firms often take a harder line and increasingly use salaried in-house legal staff to defend claims.
“There’s been this trend over the last eight years or so of insurance companies amalgamating into bigger companies,” said Matthew Sutton, partner with Thomson Rogers LLP. “That came with a long of changes in terms of how personal injury lawyers practice.”
Increasing use of in-house counsel by insurance firms
In the past, personal injury lawyers and insurance defence lawyers (often external) would look at how much it costs to settle claims and compare it with the costs of going to trial, said Sutton, who used to practice insurance defence law before switching sides. However, the trend he has noticed since at least 2015 has been for insurance companies to rely more on in-house counsel to deal with claims, “and that has really changed the dynamics.”
Insurance companies have also started adopting a more standardized approach to how they would deal with files, “and some of them have decided to really play hard,” Sutton told forum webinar attendees, saying many are taking cases to trial with in-house lawyers. One reason is the use of salaried counsel; the other is a desire to take stronger stands “on uncertain cases they feel are defensible.” In some cases, they may choose to resolve faster. Others want to see “how long you can keep you and your client going.”
Yoni Silberman, a partner with Bogoroch and Associates in Toronto, added that she feels that in the past, there was more room to negotiate in mediation or pre-trial sessions. “You’d have the opportunity to debate issues of law with counsel,” she said, “and you’d have a greater opportunity to persuade.”
Moving more cases in-house “has really empowered the insurance adjusters,” she said, “because, in some cases, they are adhering to strategy primarily,” making them more willing to take a rigid stance.
As well, Silberman said that while larger personal injury law firms can manage the typically long period it takes to settle a case, she thinks about the smaller practices that might not have the resources to confront these backlogs while having clients waiting to get their lives back on track.
Similar harder-line tactics in BC
Morgyn Chandler, the managing partner at Hammerco Lawyers LLP in Vancouver, said she sees similar hardline strategies used in British Columbia, especially with the switch from an open tort system to a no-fault model. That change comes upon the heels of other such caps on minor injury claims and attempts to move some claims to an online civil resolution tribunal instead of the court system.
She said personal injury lawyers have been fighting this battle for several years now. “But in 2021, it really became irrevocable when we moved to no fault.” This has led to profound changes in personal injury law practice and has also meant some plaintiff-side lawyers decided that with the changes, it was time to retire.
Chandler said that she knows more about what is happening on the plaintiff side but noted firms on the insurance defence side have also been affected, as the Insurance Corporation of British Columbia is a monopoly, and many of these firms solely did ICBC work. “They are struggling as well with figuring out this new reality and what it means for them.”
While many law firms on both sides still have a large inventory of motor vehicle accident cases from before the changes in ICBC rules, Chandler said lawyers in this practice area “are looking to the future and recognizing that three-to-five years, that won’t exist anymore.”
Chandler noted that “it’s like ICBC has become emboldened by the new laws” and more challenging to deal with. “They make decisions not based on the risk of what can happen in a courtroom but based on their internal policies.”
She has also noticed that since jury trials have started again, the insurance defence in cases she knows about has almost always chosen the trial with jury option, rather than judge alone, on the belief that juries are less sympathetic to the plaintiff.
“That means you have to, strategize differently, you’ve got to plan your case differntly, you’ve got to prep your client differently,” she said, noting that many younger lawyers won’t have had much experience with running a jury trial, given how long strategies to keep the pandemic from spreading lasted.
“We’re focusing on making sure that they’re exposed to juries and exposed to the different types of strategic considerations that come into play when you have a jury instead of a judge.”
Chandler pointed out that many lawyers who practice personal injury law are broadening the types of cases they take on, moving to areas such as occupiers’ liability, slip-and-fall, medical malpractice, sexual assault, class actions and mass torts. “Highly successful boutique personal injury firms are trying to redefine themselves and figure out what the future looks like.”
Chandler said her own firm moved to a smaller office and went “completely digital” so that firm lawyers could work from anywhere. It also acquired a practice on Vancouver Island.
“We’ve really invested a significant amount of time, money and energy into our future. And it’s showing dividends now, which is excellent,” Chandler said. “I think what we realized is that we had these transferable skills.” She noted that personal injury lawyers “are in court all the time, so we know how to run trials, and we’ve done more discoveries than most people in other practice areas.
“When you look around, you realize you’ve got a lot of assets and a lot to bring to clients.”
Broadening the PI lawyer’s area of practice
Lindsay Charles, a partner with McLeish Orlando LLP in Toronto, noted that her firm has moved more into medical malpractice. She adds, “it’s also interesting to look at where the files are now coming from and how the market is changing.
“There’s definitely more interaction with the web than it was when I first started. And it’s quite fascinating to get behind the business of the law firm to understand how that [the web} is working to try to generate more files, and quality files to your firm.”
She added that “there is more than one way to have a successful business,” noting that while her firm and those of the other panellists tend to focus on more serious, complex cases that involve higher risks, there are others serving a larger number of clients who aren’t as severely injured. “There’s lots of room to succeed.”
The panellists all agreed that while the Internet is becoming an essential feature of marketing personal injury law services to the public, referrals and word of mouth still significantly help bring business to a law firm.
Said Silberman: “Our strategy is not being the loudest voice. It’s centred on quality over quantity.”
Thomson Rogers lawyer Sutton added that while his firm now brands itself as TR Law to make it more accessible to potential clients searching online with the inclusion of the word “law,” ultimately, “we work on trying to do best for our clients and let the results speak for themselves.”