Focus On

BARRISTERS AND SOLICITORS - Compensation - Contingency agreements

Monday, June 18, 2018 @ 8:45 AM  

Lexis Advance® Quicklaw®
Appeal by law firm from finding that Results Achieved Fee was a contingency fee. The respondent retained the appellant law firm to represent him in family law litigation primarily concerning custody of his daughter. The respondent signed a retainer agreement outlining hourly rates, daily fees for court appearances and an automatic yearly increase of 15 per cent with respect to those fees. It also provided for an increase in fees if a positive result was achieved. After the respondent's retainer was depleted, he signed a direction that any funds payable to him from the litigation would be paid to the appellant in trust and outstanding fees would be deducted from those funds. The respondent was awarded sole custody of the child, half of the proceeds of sale of the matrimonial home, and costs of $192,000. He received $423,510 in trust. The appellant deducted $132,597 from the monies held in trust to satisfy the respondent's outstanding account as well as $72,433 for the Results Achieved Fee. The respondent objected to the Results Achieved Fee and sought to have it assessed. The assessment officer concluded that a judge would have to determine the issue as a question of law. The application judge determined that the Results Achieved Fee was a contingency fee agreement as defined by the Solicitors Act and therefore constituted a prohibited charge. The appellant appealed arguing that the Results Achieved Fee was a permissible premium, not an impermissible contingency fee.

HELD: Appeal dismissed. The Results Achieved Fee was a contingency fee agreement within the meaning of the Solicitors Act and was therefore prohibited. The ordinary and grammatical wording of the relevant provisions did not support limiting contingency fee arrangements to those in which a lawyer's fee was only payable in the event of success and/or where a lawyer's fees were calculated by reference to the specific monetary result. Policy concerns prohibited the use of contingency fees in family proceedings. In family law litigation, the emphasis was on resolution, mediation and cost reduction and a fee based on success undermined that emphasis. Section 28.1(2) provided that contingency fees were those that were contingent on successful completion of the matter and did not require all of the lawyer's remuneration to be contingent.

Jackson v. Stephen Durbin and Associates, [2018] O.J. No. 2362, Ontario Court of Appeal, M.L. Benotto, D.M. Brown and B. Miller JJ.A., May 4, 2018. Digest No. TLD-June112018001