Employed and dependent contract lawyers outside of private practice (includes lawyers on secondment)*
Employed and dependent contract lawyers outside of private practice
You may be employed by a non-law corporation and not engaged in the practice of law other than in the course of that employment. If so, you are exempt from the requirement to pay the annual insurance fee. Correspondingly, there is no coverage under the professional liability insurance policy (Part A) for claims arising out of or in any way connected to your employment activities.
Lawyers who, though not employees, are “dependent” contractors, are still exempt, and there is no coverage available to you under the policy. In determining if a contract lawyer is properly characterized as a dependent contractor, the Insurer will consider various factors either alone, or in some combination. For example, does the lawyer:
- work under the supervision and control of the contracting party or independently?
- provide services exclusively to the contracting party?
- receive a fixed sum as payment rather than bill the contracting party for services rendered?
- enjoy benefits similar to those extended to the contracting party’s employees?
- work from the contracting party’s premises?
- send correspondence on the letterhead of the contracting party?
- use equipment, supplies, and other resources of the contracting party?
- have a relationship with the contracting party that affects the lawyer's professional independence?
Lawyers who are employed (including dependent contractors) may want to consider the risk of claims arising in respect of your employment activities. Lawyers seeking protection are likely able to acquire insurance in the private market. Other options may include adding yourself as an insured to any liability insurance policy held by the employer or obtaining an indemnity from the employer.
If you would like the Insurer’s position as to whether you are considered a dependent or independent contractor for the purposes of the policy, please send a detailed description of the circumstances, in writing, to one of the advance ruling advisors.
Lawyers on secondment
You may be asked by one of your clients or an outside organization to agree to a secondment for a period of time. The secondment may be prompted by a client’s temporary staffing needs, or the desire for the law firm to better understand a client’s business. As a secondment usually involves a lawyer working temporarily in a role akin to that of in-house counsel, you are generally considered to be a dependent contractor and the professional liability insurance policy (Part A) will not respond to any claims that may arise (see above). There will also be no coverage for claims against the firm or any of its partners who may be vicariously liable for your activities.
There may be circumstances where it is beneficial for you to work out of a client’s premises on a particular client file. For example, a firm working on a major commercial matter may elect to have one of its lawyers work at the client’s office for a period of time in order to complete due diligence. In these circumstances, as long as you do not become a dependent contractor of the client (see above), coverage is generally available. Appreciate as well that working directly out of a client's office can lead to a sense of informality not normally found in a solicitor-client arrangement. It is important that you endeavour to maintain the same level of detail and formality as you would when working out of your law firm (e.g. clarifying from whom you will receive instructions, confirming instructions in writing, ensuring that all aspects of a piece of work are properly explained to the client, etc.)
* If you are a lawyer working for the government, a Crown corporation, union or society, or a not-for-profit organization that provides pro bono legal services to the public, please contact Member Services for information about exemptions and insurance.