Surcharge Protocol

Since 1985, ALIA has surcharged the annual levies of Subscribers with Paid Claims (as defined in the Surcharge Protocol). The Surcharge Protocol was implemented effective July 1, 2019, and sets out the framework for ALIA to surcharge a fixed amount that escalates with the number of Paid Claims, without a cap.

View the Surcharge Protocol

The Surcharge Protocol benefits the large majority of Alberta’s private practice lawyers by shifting more of the costs of Paid Claims onto the relatively few lawyers who incur them; a very small percentage of Subscribers—approximately 5%—have a Paid Claim.

The Surcharge Protocol reflects commonly accepted insurance practice that reward members who have exemplary no-claim records, while shifting more costs to those who have incurred Paid Claims. While ALIA provides indemnity and not insurance, the same principle applies. The Surcharge Protocol represents a commitment to controlling costs by incentivizing competency in legal practice while promoting proportional fairness.

In recognition of the fact that Subscribers may, from time to time, be faced with claims for which they are not liable, the Surcharge Protocol does not apply to claims where only Defence Costs (as defined in the Group Policy) are paid.

Elimination of Free Paid Claims

Effective July 1, 2026, the Surcharge Protocol no longer contains a Free Paid Claim provision. Claims reported prior to that date may still qualify as “free paid claims” under a grandfathering provision. For further information, see the FAQs.

Find out more

Lawyers are encouraged to read the Surcharge Protocol in its entirety, as well as the FAQs. If lawyers require further information, they should contact ALIA via email or at 403.229.4716 or toll free 1.800.661.1694.

The summary of the Surcharge Protocol contained above, the FAQs, and any infographic or flowchart or any other linked information is provided for information purposes only and not as legal advice and is qualified in its entirety to the terms and conditions of the Surcharge Protocol.

Surcharge Protocol: FAQs

A surcharge is a professional liability (Part A) assessment levied on Subscribers who have had Damages (which includes Repair Costs) paid on professional liability (Part A) claims. The surcharge is payable in addition to the annual base levies. The assessment is approved by the governing board of the Program.

For the definition of Damages and Repair Costs please click here to review the current Group Policy.

The Surcharge Protocol was effective July 1, 2019. Prior to that, ALIA surcharged Subscribers with Paid Claims under a different process. The Surcharge Protocol was revised as of July 1, 2026.

A surcharge is triggered by a Paid Claim (as defined in the Surcharge Protocol). A Paid Claim means a payment or payments for Damages, which includes Repair Costs (as those terms are defined in the Group Policy) made in respect of a claim. Damages are normally paid when ALIA either incurs costs to correct an error or settles a claim with a claimant on a Subscriber’s behalf.

A surcharge is not triggered by the payment of Defence Costs.

For the definition of Damages, Repair Costs and Defence Costs, please click here to review the current Group Policy.

No. A surcharge will not result if only Defence Costs were paid in respect of the claim, if the claim is covered by the Western Law Societies’ Conveyancing Protocol and the Subscriber fully complied with its requirements, or if the Subscriber elects to “buy out” a Paid Claim (see FAQ below for information on “buying out” a Paid Claim).

For the definition of Defence Costs, please click here to review the current Group Policy.

Claims or potential claims reported prior to July 1, 2026, may qualify as a “free paid claim” under grandfathering provisions implemented effective July 1, 2026, in the Surcharge Protocol. The surcharge does not apply to “free paid claims”.

The Surcharge Protocol offers an option to “buy out” Paid Claims. This means that a Subscriber can reimburse ALIA for all Damages (which includes Repair Costs) paid with respect to a claim to avoid paying a surcharge for that claim.

A Subscriber may elect to “buy out” a Paid Claim at any time after the claim or potential claim has been fully resolved. However, if the annual levy invoice including surcharge has been issued, a buy out must be completed within ten (10) business days following the date of the invoice. Otherwise, adjustments to surcharge will not be made until the next annual levy invoice is issued.

For full details, please read the Buy Out provision in the Surcharge Protocol here.

Please contact ALIA directly to discuss this option:

info@alia.ca
403.229.4716 or toll free 1.800.661.1694

The Surcharge Protocol states a” Free Paid Claim” as:

A Paid Claim shall not result in a Surcharge for a Subject Year up to and including the Policy Year commencing July 1, 2030, if:

payments in respect of the underlying Claim, at the time the applicable Surcharges are calculated, are for no more than $5,000 of Damages, net of the Individual Deductible;
the Paid Claim is the oldest Paid Claim (including, for greater certainty, Prior Paid Claims) of the Individual Insured within the five consecutive Policy Years preceding the Subject Year; and
the Paid Claim arose in respect of a Claim or Circumstance that was reported prior to July 1, 2026.

Effective July 1, 2026, there is no “free paid claim” in respect of claims or potential claims reported on or after July 1, 2026, and no “free paid claims” for any invoicing for the 2031-2032 Policy Year or any Policy Year after that. This means that existing “free paid claims” are grandfathered until invoicing for the 2031-2032 Policy Year.

Discontinuing the “free paid claim” is part of the broader reassessment of ALIA’s business processes to improve the delivery of the Indemnity Program. While the framework is being simplified, the purpose of the Surcharge Protocol remains unchanged: to allocate more of the costs of claims to the Subscribers who incur them, while helping to manage overall Program costs for the profession.

No.

Yes. Repair Costs are defined as Damages in the Group Policy. Payment of Damages triggers a surcharge.

The definition of Repair Costs and Damages can be reviewed in the current Group Policy here.

The surcharge applies for five consecutive practice years. If a Subscriber becomes exempt or otherwise does not pay the surcharge during that period, payment of the surcharge is suspended until the Subscriber returns to Indemnified status or is invoiced for the annual levies and surcharge, so that the surcharge is paid for five practice years.

The President and CEO of ALIA may waive the payment of the surcharge with approval of ALIA’s Claims Committee. Requests for a surcharge waiver must be submitted to the President and CEO of ALIA in writing with supporting reasons as to why a waiver should be considered.

Yes. Surcharge payments collected pursuant to the Surcharge Protocol offset some of the costs of claims and reduces the professional liability (Part A) levy from what it would otherwise have been; however, the professional liability (Part A) levy is determined by a number of factors. These factors include, among other things, the costs of claims from the previous year, the number of claims expected, and the costs attributed to them. More information on the process to set indemnity levies can be viewed on the Indemnity Levies page.

Subscribers can find information as to how much they owe for the surcharge under the annual levy invoice located under the fee billing history in the Lawyer Portal.

Please click here for information on methods for making payments to ALIA.

Yes. Under the Rules of the Law Society of Alberta, failure to pay an assessment, which includes surcharges, can result in administrative suspension. Rule 165(2) states that a member will be automatically suspended for default on payment of professional liability indemnity assessments.

Please contact the Law Society of Alberta’s customer service team for any queries related to the Lawyer Portal:

403.229.4700 or Toll-free 1.800.661.9003
membership@lawsociety.ab.ca