Legal Expense Insurance allows First Nations to access alternate funding by providing the guarantees a financial lender needs to grant a community access to a line of credit. These funds will then cover the associated fees and costs necessary to take a claim to the Specific Claims Tribunal, and beyond.
To launch an aggressive action, a First Nation community must cover their legal fees, research costs, expert witnesses, the conduct of a hearing before the Tribunal, appeals, and other related expenses.
Legal Expense Insurance will allow a community to fund the legal proceedings necessary to get them across the threshold and into a tribunal, or into negotiation through litigation if an out of court settlement cannot be reached.
Win or lose, the loan is repaid.
The Legal Expense Insurance program has been designed to meet the collateral requirements of lenders, and is backed by a Canadian branch of a US insurance company.
Lenders use the insurance policy as collateral to secure a line of credit. This line of credit is then used to pursue a specific claim.
By using independent financing to cover 100% of the disbursement costs and a substantial portion of the legal fees, the First Nation does not have to pledge any assets for collateral, use up any existing savings or funds earmarked for other initiatives, sell any assets, or use up existing trust fund interests.
This program also ensures that the specific claim is being pursued aggressively, and on the First Nations’ timetable.
With this program, negotiations will no longer be affected by inadequate funding. Communities will have the money to obtain the best researchers and experts as well as the flexibility to select their own independent counsel. The line of credit will pay a substantial portion of the legal fees, and the one-time insurance premium can be paid using the line of credit.
- Chief and Council are no longer affected by inadequate funding by the Specific Claims Branch
- Chief and Council now have the flexibility to select independent counsel
- Chief and Council will have a line of credit to pay a substantial portion of the legal fees as they are being incurred which will allow for a more competitive CFA
- Chief and Council would have the ability to obtain the best researchers, experts, reports, etc. to advance the negotiations
- Chief and Council pay a one-time insurance premium that can be paid by the line of credit
- Chief and Council are assured that the Legal Expense Insurance Company will not participate in the settlement of the litigation