Tag: professional liability insurance

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Five insurance companies to pay $4.1 million to a bailiff’s firm

The Quebec Court of Appeal ordered five insurance companies to pay approximately $4.1 million to a bailiff’s firm after it refused to cover its losses and legal fees in a case that clarifies when professional indemnity claims can be triggered and reiterates yet again the principle that lawyers should not have two masters.

In a dense and complex 30-page ruling dealing with an insurance claim arising out a “very complicated and very unusual underlying facts,” the Quebec Court of Appeal maintained its trend of broadly interpreting claims and professional liability insurance policies in favour of claimants, according to insurance lawyer experts.

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Montreal law firm on its own to defend itself, appeal court rules

A Montreal law firm caught in a tangled web of complicated lawsuits after a former partner allegedly orchestrated a multi-million dollar Ponzi scheme through his lawyer’s trust account lost a key legal battle before the Quebec Court of Appeal in a ruling that underscores the exposure law firms face when dealing with rogue lawyers.

In a scandal that has shaken the Montreal legal community, well-regarded Montreal law firm Kaufman Laramée LLP faces at least five lawsuits arising from the alleged fraud by former clients of Dany Perras, a lawyer who resigned abruptly from the roll in October in 2011 after the Barreau du Québec launched an investigation into the misappropriation of funds allegedly committed by Perras. The former Montreal lawyer, who briefly practiced at Kaufman Laramée for six months in 2011, faced a hearing this past January before the Bar’s Disciplinary Council. A decision is expected shortly.

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Misappropriation of funds: The profession’s dirty little secret

On an unusually warm and foggy Saturday evening this past December the $1.7-million home of Dany Perras was set ablaze, the third time in the space of a year an act of vandalism targeted the former Montreal lawyer. Perras, who resigned abruptly from the roll in October 2011, is under investigation by the Quebec Bar for allegedly orchestrated a multi-million dollar Ponzi scheme through his lawyers’ trust account. It’s been more than 16 months since the scandal that shook the Montreal legal community erupted, and the fallout is still being felt. Successfully petitioned into bankruptcy, Perras is the subject of an ongoing criminal probe and a host of legal proceedings – many of which are under court seal — launched by more than a dozen creditors seeking an amount surpassing $6 million.

The Perras case is unique, and yet at the same time it is not.

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Investors delighted but insurers concerned

A ruling that ordered an insurance company to pay $460,000 to a Quebec couple after their financial advisor invested their retirement nest egg in promissory notes in scandal-plagued Montreal financial group Mount Real Corp. has raised questions over the scope of professional liability insurance coverage in the province and ostensibly broadened investor’s protection.

Quebec’s financial and insurance sectors are now worried over the impact of a Quebec Court of Appeal unanimous decision that declared inoperative clauses excluding gross negligence in professional liability insurance policies under the Act respecting the distribution of financial products and services (ADFPS). Law insurance experts are speculating that the finding may have a reach beyond the ADFPS, and affect professional liability insurance policies held by the indemnity funds of Quebec’s 44 professional corporations, including the Barreau du Québec. The Quebec legal society declined to comment.

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