DOWNES v BOTAN, 2018 ABQB 341
10.18: Reference to Court
10.2: Payment for lawyer’s services and contents of lawyer’s account
10.7: Contingency fee agreement requirements
10.8: Lawyer’s non-compliance with contingency fee agreement
The Applicant, Ms. Downes was a former client of the Respondent lawyer. The Applicant sought to have a Contingency Fee Agreement between herself and the Respondent declared unenforceable on the basis that it breached the Rules, and the Respondent breached his fiduciary duty towards the Applicant.
Inglis J. considered Rule 10.7, which governs the requirements for contingency fee agreements, and in particular Rule 10.7(2)(e)(ii) and (f)(iv) which provide that the contingency fee agreement must contain precise and understandable terms about the maximum fee payable, the disbursements, as well as whether the lawyer is to receive anything from a Costs award. In addition, Rule 10.7(3) provides that the contingency fee agreement must be witnessed. Finally, Rule 10.7(4) provides that the client must be served with a copy of the contingency fee agreement. Justice Inglis considered the authorities which set out contingency fee agreement requirements, and determined that the Contingency Fee Agreement did not meet the requirements of the Rules, and therefore the Contingency Fee Agreement was invalid.
Inglis J. also referred to Rule 10.8 which states that if a lawyer does not comply with Rule 10.7, the lawyer will be entitled to only the lawyer’s charges determined in accordance with Rule 10.2. Justice Inglis, referring to prior authority, stated that the Court has dual jurisdiction: to interpret and enforce contracts, and to vary, modify or disallow a contingency fee agreement through the operation of Rule 10.18(3)(b).
Justice Inglis considered each of the factors set out under Rule 10.2 and noted that there was little evidence before the Court regarding the manner in which the legal services were performed, or the skill with which they were performed. Justice Inglis noted that the Applicant would likely not have been able to pursue the claim without counsel willing to work on contingency; that the Respondent lawyer had conducted the litigation from start to settlement; and that a substantial fee payable to the Respondent would represent a large portion of the funds that were received in the settlement of this matter. Her Ladyship also noted that no time records by the lawyer were available for review by the Court. In the result, Inglis J. held that the appropriate fee to be paid to the Respondent lawyer was $26,250.00 plus disbursements.View CanLII Details