Alberta Lawyers Indemnity Association (“ALIA”) will be implementing the civil litigation filing levy (the “CLFL”) to reduce the base levy of every member who participates in Alberta’s mandatory lawyer indemnity program (“Subscriber”).

ALIA’s Board of Directors approved the CLFL as a two-year pilot project commencing with ALIA’s next policy year (July 1, 2021 to June 30, 2022). Starting with that policy year, ALIA will collect a $75 CLFL for specific civil litigation actions launched and defended by Subscribers in the Court of Queen’s Bench of Alberta. Many actions are excluded from the CLFL, including family law actions, matters involving representation through pro bono and other public legal clinics, trusteeship and guardianship applications, and actions by Subscribers to collect outstanding accounts from their clients.

As amounts collected under the CLFL will help offset some of the claim costs of the indemnity program, the professional liability assessment (“Part A Levy”) payable by all Subscribers is expected to be reduced from what it otherwise would have been. The first reporting and payment of assessable filings will not be due until October 31, 2021. However, Subscribers are expected to receive the benefit of Part A Levy reductions beginning with the May 2021 annual levy invoices. Reporting and payment of the CLFL will be quarterly. For more information on timing, click here.

Civil litigation generates more claims and costs than any other area of the indemnity program. Since claim costs are a key driver in establishing the base levy payable by Subscribers (Part A and Part B), the higher costs of civil litigation are disproportionately shared by all Subscribers. The purpose of the CLFL is to make funding of the indemnity program fairer to all Subscribers by shifting some program costs directly to civil litigation with a view to lowering each Subscriber’s Part A Levy. Subscribers who are required to pay the CLFL may charge it to their client as a disbursement.

While transaction levies have been applied successfully in Ontario (LawPRO) and Newfoundland and Labrador for many years, this is the first time a similar levy has been implemented in Alberta. Accordingly, the CLFL will be introduced as a two-year pilot project period, which will enable refinements to be made.

For an overview of the CLFL and the reasons for implementing it, click here. For relevant FAQs, click here.

ALIA undertook a consultation process on the CLFL with a sample population of Subscribers and professional organizations to help refine the CLFL pilot project and facilitate its smooth implementation. With the benefit of feedback received through that consultation, ALIA is providing this ALIAdvisory to ensure all Subscribers are aware of the pilot project and to ensure that accurate information is provided. ALIA will continue to welcome feedback relating to the CLFL prior to and during the pilot project at ALIAinitiatives@lawsociety.ab.ca.