The Plaintiff, Arthur D. Landry, was involved in two motor vehicle accidents, one on March 2, 2015 and one on October 31, 2015. The March 2, 2015 motor vehicle accident caused mostly soft tissue injuries to the Plaintiff, while the October 31, 2015 motor vehicle collision caused serious injuries. The Plaintiff suffered a brain bleed, specifically a subarachnoid hemorrhage and was designated as having suffered catastrophic injuries for the purposes of his entitlement to benefits under the Statutory Accident Benefit Schedule (“SABS”).
Both actions were commenced through a litigation guardian, the Plaintiff’s wife, Melanie Landry.
In December 2018, following a private mediation, the parties entered into a tentative settlement agreement which was subject to court approval. In the motion materials that were submitted, the Plaintiff sought court approval for the proposed settlement, an Order to Continue the action without a litigation guardian, an order dismissing the claim of the Plaintiff’s daughter, Hailey, an order approving the legal fees charged by the Plaintiff’s counsel, Mr. Strype, and an order dismissing the actions without costs.
Analysis
Upon review of the motion materials submitted to the court, D.A. Wilson J., noted that there was a significant lack of medical documentation that would allow the court to evaluate the Plaintiff’s extent of injuries, his prognosis, and his current level of functioning. The only medical evidence that was put forth in front of the court was a driver assessment done in August 2017, indicating that the Plaintiff is able to drive again.
Further, counsel for the Plaintiff sought an Order to Continue allowing the Plaintiff to continue the actions without a litigation guardian. Counsel for the Plaintiff relied on the driver assessment of August 2017 and the Plaintiff’s wife views, and litigation guardian, that the Plaintiff can manage his own financial and personal affairs. Justice Wilson rejected both requests and directed the Plaintiff’s counsel to arrange an assessment with a certified assessor for a determination of the Plaintiff’s capacity. Justice Wilson further requested a copy of the medical index for her review.
Justice Wilson was also asked to approve the proposed legal fees for the tort actions in the amount of $398,390.71 which is 33.3% of the damages, interest and costs excluding disbursements, in accordance with the terms of the retainer agreement. The parties had agreed to settle the tort actions for an all-inclusive sum of $1,275,000 and the Accident Benefits claim for $650,000, for a total sum of $1,925,000.
The Contingency fee Agreement (“CFA”) included in the motion record indicates a fee of “33.3% of the damages, interest, and costs (not including disbursements)” can be applied to both the tort action and the accident benefit settlement.
Counsel for the Plaintiff set out the fees to be charged at $615,057.38, which is 33.3% of $1,845,172.12, which is the settlement amount net of disbursements paid for both the tort and Accident Benefit claims. Justice Wilson found it unusual that the CFA in question stipulates “a percentage to be charged based on the settlement amount for claim, interest and costs” [emphasis in the original].
Justice Wilson, referring to Batalla v. St. Michael’s Hospital, 2016 ONSC 1513, noted that just because the Plaintiff executed a CFA does not necessarily mean that counsel for the Plaintiff is entitled to charge a fee in accordance with the executed CFA. Quoting the report of the OCL, Justice Wilson noted that “a fee agreement is not binding on a party under disability until it receives the approval of this Honourable Court”.
Section 24 of the Solicitors Act, R.S.O. 1990, c. S.15, reads as follows:
Upon any such application, if it appears to the court that the agreement is in all respects fair and reasonable between the parties, it may be enforced by the court by order in such manner and subject to such conditions as to the costs of the application as the court thinks fit…
The Court of Appeal in Raphael Partners v. Lam, (2002), 2002 CanLII 45078 (ON CA), 61 O.R. (3d) 417 (C.A.) noted that a CFA must be both fair and reasonable. The Court of Appeal noted the factors that speak to reasonableness as the legal complexity of the matter; the results achieved; the risk assumed by the solicitor; and the time expended by the lawyer.
Based on the motion material that was filed, Justice Wilson could not make the determination that that subject CFA was fair and reasonable. She further requested that counsel for the Plaintiff submit a further affidavit addressing the factors in Raphael Partners v. Lam, (2002), 2002 CanLII 45078 (ON CA), 61 O.R. (3d) 417 (C.A.).
