How can our industry help reduce the pain for Canadians?
The current cost-of-living crisis is placing immense financial pressure on Canadians and impacting their overall well-being. Those pressures may be a why only a small segment of the 2,500 Canadians recently surveyed hired a lawyer to resolve a legal dispute that they faced in the past three years.
In a recent national survey commissioned by ARAG Legal Solutions Inc., the harsh reality of legal risks and the impacts legal disputes have on the lives of everyday Canadians was revealed. The research provided insights and emphasized the need for solutions to help mitigate these legal risks and their consequences.
What was the number one reason a majority did not hire a lawyer? It was too expensive!
“It is concerning to observe that a significant portion of Canadians choose to not to hire a lawyer due to high costs involved” notes Peter Dempster, CEO of ARAG Legal Solutions Inc. “There is no justice if justice is inaccessible. The significant and growing costs of the legal system have quietly created a barrier preventing Canadians from exercising their legal rights in our system.”
The top categories of legal disputes handled by Canadians over the last three years were property-related disputes, highway traffic ticket disputes, family and employment law related disputes. Additionally, one third of those surveyed Canadians handled two or more legal disputes during the past three years.
Over half of respondents reported that legal disputes had a large or moderate impact on their personal finances. Many incurred substantial legal fees, with a majority dipping into personal savings or taking on additional debt to cover costs.
“The impact of an unexpected legal issue is very real, both financially and psychologically. It is unfortunate that many Canadians currently face these risks on their own, when there are insurance products in the marketplace that mitigate many of these same risks,” said Peter. “It’s crucial that the insurance industry address help by providing solutions, particularly when so many Canadians and businesses are under financial strain in recent economic times.”
“We also need to think beyond the financial severity a risk event has on customers. The Canadians surveyed made clear the job performance and mental health impacts from legal disputes were incredibly significant for them and their families,” says Jeffrey Kless, VP Marketing and Strategic Initiatives. Over half of respondents experienced increased work-related stress, difficulty concentrating, missed workdays, and decreased productivity. A particularly striking revelation was that 12% of respondents lost their jobs due to legal disputes. These negative impacts extended to mental health, with 71% of respondents reported a large to moderate impact on their own and their household’s mental health.
Based on a written description, 73% of respondents were willing to pay for additional insurance premiums for legal expense insurance benefits. The overwhelming interest in legal expense insurance in the survey results shows that Canadians are seeking accessible solutions to mitigate legal risks. “That is why we believe that legal expense insurance is a valuable tool for protecting the financial and mental well-being of Canadians,” says Peter. “That is also why we collectively owe it to customers to discuss legal risks, their impacts, and the available solutions, to ensure those risks are well managed when legal life events occur.”
To delve into the comprehensive findings within the “Legal Life Events: When They Happen, They Hurt!” whitepaper, visit ARAG.ca. Our research from 2022 is also available, and explores legal disputes and the significant impacts they had on Canadian small business owners