...
The worst part is, the person suing him has a lawyer paid on commission, whereas he has to hire lawyers out of his own pocket. The insurance company all initially seemed to look for a way to deny coverage then reluctantly decided to help out.
I'll accept that you have a friend who is facing some uncertainty in the throes of a lawsuit.
A couple of points. As for the plaintiff's lawyer being paid "on commission", that is not a term I have heard used, but perhaps it is where your friend is being sued. In BC, lawyers can accept "contingency fee" retainers. The lawyer will get a percentage of any amount recovered for the client. Most lawyers won't act on a contingency fee basis unless the plaintiff's case looks pretty certain to win, even if the quantum of the win might be uncertain. It is singularly unprofitable to pursue an action all the way through a trial - a trial that might last weeks - and get paid nothing. So, lawyers acting on a contingency fee basis are more likely to be settlement-conscious. Better to encourage the client to settle and get something than fail at trial and get zip.
As for the role of the insurance company (ies), it sounds like your friend is now having his legal bills paid by his insurers, under what is known as the insurer's "duty to defend". A good explanation is captured in the following passage:
"The duty to defend arises where allegations raise claims which would be payable under the agreement to indemnify established in an insurance policy. The duty to defend is triggered by the mere possibility that a claim within the insurance policy in question may succeed."
http://www.courts.gov.bc.ca/jdb-txt/SC/10/09/2010BCSC0904.htm (see para. 30)
I have scant idea of the facts underlying your friend's predicament and can only speculate. But it strikes me as a bit odd that he is facing years for the matter to resolve. That is in part, again, because the lawyer acting on the contingency fee won't eat off the file for years in that case. In that sense, your friend has the upper hand. The insurers will be getting and paying regular bills from counsel defending the action. Plaintiff's counsel will be getting nothing and, quite likely, will be carrying the disbursements.
There are also ways to drag these things across the finish line sooner rather than later. I do not know what province and court system we are talking about, but in most jurisdictions one can move things along by applying for summary judgment, summary trial, trial of an issue, including severance of the issue of liability from damages, etc.
It would also be interesting to know the potential magnitude of the claim compared to the insurance policy limit. Sometimes these things settle for the policy limit where uncertainty surrounds issues of liability and/or quantum of damages. Any way you slice it, litigating these things is expensive and there are no guarantees. I learned early at the bar that a bad settlement is worth more than a good lawsuit.
You may be up on what's happening on the theory, but I'm watching it happen in real life.
I think Her Majesty's judges would be surprised to hear that the judgments they render in real cases on a regular basis are no more than some musings on legal theory. I tend to see things somewhat the other way. Before a lawsuit gets to trial, the outcome is somewhat theoretical. Lawyers for both sides pore over the legal precedents, the decided cases (that I read daily, within days of them being decided) and make their best prediction as to outcome, advising their clients accordingly. In most cases, one party wins, one loses. One party's prediction turned out inaccurate. It is only then that the "real life" outcome and ramifications become known. That is what I have seen in the 150,000 or so judgments I have read.
Your friend not only has the advantage of insurer-funded counsel, but he holds the sword of Damocles over the other side. If he goes to trial and loses, he might end up with a company bound by a judgment. Insurance might cover the judgment. He might have some personal liability, perhaps modest in amount. Almost for sure he won't have to indemnify his insurers for legal costs paid. Now, as for the plaintiff, if the case is not a sure thing, and he goes to trial and loses, what is his situation? He has no judgment on which to collect. True, he has no legal fees to pay, thanks to his lawyer's bad decision to accept a contingency fee retainer. Most probably he will be faced with a very large bill for disbursements, particularly if his counsel retained experts to give evidence. Very pricey indeed. And then, to rub salt in the wound, the disappointed plaintiff will end up saddled with paying your pal's legal costs. That's the ordinary rule. "Costs follow the event". Loser pays winner's costs. True, it probably won't be on a full indemnity basis, probably what are often called "part/party" costs, or "ordinary costs". But even then, such costs can easily exceed $100,000. Today, that's a small bill.