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BARRISTERS AND SOLICITORS - Contingency agreements - Bill of costs

Monday, May 31, 2021 @ 9:19 AM  

Lexis Advance® Quicklaw®
Appeal by a client from a Queen’s Bench decision affirming a review officer’s assessment of legal fees. The client retained the respondent law firm to represent him in a Federal Court patent infringement matter pursuant to a contingency fee agreement. In time, the firm advised the client that it would require a switch to a fee-for-service retainer if the client sought to continue the litigation rather than pursue settlement. The firm’s settlement proposal was accepted by the opposing party. However, the client took the position that no settlement was reached. The firm advised the client that it could not continue to act for him. The client retained new counsel to challenge the settlement. The Federal Court held that a binding settlement was reached. The firm issued the client a bill for approximately $81,000, of which $77,000 related to fees. The fees reflected a significant reduction from time billed, but represented 35 per cent of the settlement amount, which was consistent with the contingency agreement. The client took the position that the firm terminated the contingency agreement and therefore no fees were payable. The review officer found that although the contingency agreement was defective due to absence of necessary particulars, the amount billed was reasonable. The decision was affirmed by the Court of Queen’s Bench on appeal. The client appealed to the Court of Appeal.

HELD: Appeal dismissed. The chambers judge correctly found that the review officer’s consideration of whether the contingency agreement contained the specified particulars required by Rule 10.7(2) was a fact-finding exercise rather than an exercise in contractual interpretation and was thus within the review officer’s jurisdiction. A contingency fee agreement was unenforceable if it did not comply with the clear provisions of the Rules. To ensure fairness in the assessment of fees, including consideration of the client’s reasonable expectations in the circumstances, the review officer was required to consider the reasonableness of the firm’s account pursuant to Rule 10.2. Here, in considering the reasonableness of the account, the review officer and chambers judge had sufficient evidence regarding the nature of the work performed and the circumstances of the parties’ termination of their relationship. The conclusions reached were sustainable on the record and within the review officer’s jurisdiction. No appellate interference with the chambers judge’s decision to uphold the review officer’s determination was justified.

Betser-Zilevitch v. Prowse Chowne LLP, [2021] A.J. No. 480, Alberta Court of Appeal, M.S. Paperny, J. Watson and F.L. Schutz JJ.A., April 12, 2021. Digest No. TLD-May312021001