STANCHFIELD v DOE, 2023 ABKB 273
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
This case arose from a minor Plaintiff’s involvement in two car accidents, the second of which involved an unidentified driver, and the Administrator of the Motor Vehicle Accident Claims Act, RSA 2000, c M-22 became part of the case. On her own behalf and as her son’s litigation representative, the mother retained counsel for the lawsuit arising from the second accident. She then applied for the approval of a settlement relating to the second lawsuit under s. 4(2) of the Minors’ Property Act, SA 2004, c M-18.1.
In the course of this Application, the Plaintiff’s counsel also sought Court approval for the payment of his fees out of the settlement funds pursuant to the terms of a Contingency Fee Agreement (“CFA”). The Public Trustee agreed that the settlement should be approved but objected to the amount of fees that the Plaintiff’s counsel sought.
The Court found that the CFA was unenforceable because it did not comply with Rule 10.7 and 10.8, which sets out requirements to ensure the terms of a contingency fee are clear and that the client had executed and been provided with a copy of the agreement. The Court noted that the CFA failed to include: a statement that “… no fee, calculated as a percentage or otherwise, may be payable on disbursements or other charges recovered” as required by Rule 10.7(2)(e)(i), and instead stated the opposite; the statements required by Rule 10.7(2)(f) if the lawyer was to receive any amount from a Costs Award, even though it provided that counsel would receive a portion of a Costs Award; a statement regarding the client’s notification needed to terminate the CFA as required by Rule 10.7(2)(g), and instead contained an awkwardly-worded provision that only potentially covered a portion of that Rule’s requirements; and a statement regarding the review of the CFA and counsel’s charges, as required by Rule 10.7(2)(h).
The Court added that the invoice appended as Exhibit G to the mother’s updated Affidavit failed to include a statement that at the client's request a Review Officer may determine both the reasonableness of the account and the reasonableness of the CFA, as required by Rule 10.7(7).
The Court also noted that Courts must be careful not to reward counsel, or prejudice clients, for counsel’s non-compliance, especially when counsel act on behalf of minor children.
As a result, the Court approved the settlement of the minor Plaintiff’s claims but found that the Plaintiff’s counsel was only entitled to “a lawyer’s charges determined in accordance with Rule 10.2”, including goods and services tax and disbursements and other costs, which was around $2,700 less than counsel claimed. No Costs of the Application were awardedView CanLII Details