The Program is run on a non-profit basis. There is a direct link between the amount the Program pays out to defend indemnified lawyers and satisfy claims against them, and the total amount of the levy assessed on indemnified lawyers. This means that future levies can be reduced by lowering the frequency and severity of claims made against the Program.

ALIA and the Law Society are working to avoid or reduce claims in various ways, including the following:

• Providing ALIAlerts to warn members about current fraud schemes that are targeting lawyers and their firms.
• Auditing new law firms to ensure responsible practices are put in place.
• Enhancing the electronic trust transaction review capabilities and ongoing risk assessments to identify and address unacceptable practices.
• Providing information and resources, such as ALIAdvisory education articles.
• Supporting the Legal Education Society of Alberta and ASSIST to help Alberta lawyers through educational and supportive resources.

Looking forward, ALIA continues to investigate opportunities to reduce the levy by enhancing efficiencies and loss prevention activities and assessing options for future program funding.

Some types of negligence are avoidable, such as some limitation and deadline claims. Surprisingly, this is the largest area of losses for the Program and, accordingly, the largest contributing factor to the base levy.

There is an opportunity for indemnified lawyers to lower the levy by lowering costs for all types of claims over the coming years. As the frequency and severity of claims directly affect the annual levy assessment, ALIA continues to stress the importance of loss prevention and asks lawyers to avoid or minimize claims. ALIA’s claims funding model ensures that money saved on claims will result in lower levies in future years.

Yes, some lawyers are exempt from the levy assessment.

Alberta lawyers who are employed by (or who contract with) a government, university, person or enterprise other than a law firm, and who practice solely within the scope of that employment or contract, are not assessed the levy. These lawyers are not covered by the Program and accordingly either they, their employers, or private insurers (if they purchased indemnity coverage) would be responsible for any losses.

Additionally, some active lawyers are insured at no charge for pro bono services through approved organizations as set out in Rule 148 of the Rules of the Law Society of Alberta.

Finally, for a time, lawyers who had practice for over 50 years were exempted from paying the levy as long as they remained claims-free. Although this exemption has been removed, those lawyers who received it at the time have been grandfathered.

All non-exempt lawyers in Alberta historically shared the burden of incurred losses equally by paying the same levy. However, some lawyers may be subject to special assessments (called surcharges) in addition to the base levy, due to their claims history. Surcharges are made pursuant to the Rules of the Law Society of Alberta and are set by the Board.

Yes, there is a $5,000 individual deductible for Professional Liability claims.

The coverage under Alberta’s mandatory Program is set out in the Alberta Lawyers’ Professional Liability and Misappropriation Indemnity Group Policy (the “Group Policy”). It includes both errors and omissions coverage (called Professional Liability Indemnity) and misappropriation coverage (called Misappropriation Indemnity, although it also benefits lawyers who do not operate trust accounts, and their clients) for indemnified lawyers providing certain professional services.

Misappropriation coverage does cover all private practice lawyers, not just lawyers who have trust accounts. Misappropriation is not restricted to money in a trust account, so coverage is not restricted to members who operate a trust account.

Protection of the public against dishonest lawyers helps protect the reputation and integrity of the profession. When a member of the public suffers a loss as a result of misappropriation by their lawyer and misappropriation coverage remediates that loss, it demonstrates to the public that Alberta’s legal profession is responsive and protective of consumers of legal services. This helps to build and maintain trust in the profession.

The details of the coverage, including important terms and applicable exclusions, are set out in the Group Policy, a copy of which is available on the Law Society/ALIA website. The summary below is provided for informational purposes and does not override or otherwise affect the interpretation of the Group Policy:

Professional Liability Indemnity (Part A)

Coverage of $1 million per occurrence with $2 million aggregate limit per year, subject to an individual deductible of $5,000 per Occurrence. Coverage includes certain damages that the insured becomes legally obligated to pay (including repair costs) and defence costs.

Misappropriation Indemnity (Part B)

Misappropriation limit of $5 million, with a profession-wide Annual Aggregate Limit of $25 million.

Yes. ALIA recommends that all lawyers in private practice consider purchasing optional excess coverage for additional protection and periodically review their excess coverage to ensure it is proportionate with the risk and value of transactions undertaken by the lawyer.

Although excess coverage may be purchased through various brokers, ALIA works with the Canadian Lawyers Insurance Association (“CLIA”) to assist Alberta Lawyers in the purchase of excess coverage. Applications are available on CLIA’s website.

It is a requirement of the Group Policy that all claims or potential claims must be reported to ALIA during the policy period, the year covered by each successive policy. This means that for this current policy period, all claims or potential claims must be reported to ALIA on or before June 30, 2019. For the new policy period, which will be covered by the 2019/2020 levy, all claims or potential claims must be reported to ALIA on or before June 30, 2020.

Failure to report a claim prior to the June 30 deadline in each policy period will result in denied coverage.

Payment of the levy is due June 30, 2019. Payments can be made in a single payment or by two instalments. Invoices will be made available online through our Lawyer Portal in mid-May 2019. Payment information can be found here.