Full Decision
“When a solicitor is discharged by the client, the solicitor is entitled to a charging order where the property was preserved or recovered while he or she was acting on the client’s behalf…it would be unfair to deny a charging order in the case of a solicitor who prepares a whole case down to the moment of trial, is then discharged and the client succeeds as a result of the former solicitor’s efforts.”
Mr. Anjun retained Mr. Alam to advance a personal injury claim on his behalf and signed a contingency fee retainer agreement. Months before the trial, Mr. Anjun decided to try to settle the claim himself by negotiating directly with the defendant, and depriving Mr. Alam of his legal fees and disbursements. As a result, Mr. Alam brought a motion seeking a charging order against the proceeds of any judgment or settlement that his former client recovered from the defendants.
The Ontario Superior Court sided with Mr. Alam and the order was granted. They re-iterate that a lawyer’s entitlement to a charging order for fees and disbursements in an action depends on whether it can be reasonably said that a settlement or judgment obtained by the client will have been achieved through the “instrumentality” of the lawyer’s efforts. In order to obtain a charging order on property, the solicitor must demonstrate that:
- The fund or property is in existence when the order is granted.
- The property was “recovered or preserved” through the instrumentality of the solicitor.
- The client cannot or will not pay the lawyer’s fees.
In this case, the fund or property in existence was the cause of action itself. The Court was satisfied that, apart from the proceeds of a judgment of settlement, Mr. Anjum either could not, or would not pay his lawyer’s fees. The only issue to be decided was whether it could be said that the settlement funds were “recovered or preserved” through the instrumentality of Mr. Alam, if Mr. Anjum negotiated a settlement, or obtained a judgment himself.
In its analysis, the Court states that it is settled law that a solicitor has both a “retaining lien” and “charging lien”. A “retaining lien” allows the lawyer to keep, as security for payment of the bill, a client’s files, documents, funds, and property that have come into their possession. A lawyer also has a lien on property of his client representing the fruits of litigation for which the solicitor has successfully expended his efforts, also known as a as a “charging lien”. A “charging lien” may be enforced against property which is not in the possession of the solicitor. It is well established judicially that the solicitor has a prima facie right to his lien. The decision to grant a charging order is within the discretion of the Court. This discretion is exercised judicially on equitable principles, with the solicitor prima facie being entitled to its exercise in his favour.
