STEINKE v HAJDUK GIBBS LLP, 2014 ABQB 34
10.2: Payment for lawyer’s services and contents of lawyer’s account
10.26: Appeal to judge
10.27: Decision of judge
The Appellant law firm appealed the Decision of the Review Officer to reduce the law firm’s fees by approximately 19%. The Respondent clients cross-appealed, stating that the Review Officer should have made a larger reduction.
With respect to the standard of review, the Court held that it may only review or revoke the Review Officer’s Decision if it reflected an error of principle or if the award was inordinately high or low. The Court also held that a factual determination that was clearly wrong may also warrant intervention.
The Court reviewed the general principles governing the review of an account submitted by a lawyer to a client as set out in Alberta Treasury Branch v 1401057 Alberta Ltd, 2013 ABQB 748. The Court held that the Review Officer failed to take into account the general principles governing costs and committed errors of law for the following reasons:
1. The Review Officer’s Decision failed to honour the terms of the retainer agreement and without a compelling reason, relieved the clients of their obligation to pay their lawyer.
2. There was no indication that the law firm failed to pass the costs principle that, unless there was a contrary provision in the retainer agreement, a client must pay for legal services which increases the likelihood of the purpose of the retainer agreement being achieved.
3. The Review Officer did not assert that any reduction ordered was attributable to the principle that ensured that those who are obliged to pay for legal services are treated reasonably, taking into account all circumstances. The Review Officer appeared not to have discussed whether the law firm’s charges were exorbitant or if the law firm took advantage of its clients.
4. The Review Officer did not discuss the client’s direction to the law firm to “fight”.
The Court held that generally, after concluding that the Review Officer had committed errors in law, the Court would direct the matter back to the Review Officer to adjudicate the amounts needed to be paid in accordance with the correct legal principles. In this case, the Court held that another review by a Review Officer was not required for the following reasons:
1. The Court was completely satisfied that the principles governing the review of the Appellant’s account could dictate only one result: the clients must pay the entire amount.
2. The record before the Review Officer was complete and there was no need to conduct another hearing to perfect the record.
3. The decision would save the clients and the law firm significant costs associated with an additional appearance before the Review Officer.
The Court went on to explain why the clients would have to pay the Appellants their account in its entirety:
1. The Respondent had made a promise to the Appellant to pay for all legal services which increased the likelihood of its success. It also expressly promised to pay for all time spent on the file.
2. The Respondent pressed the Appellant to fight its case and leave no stone unturned and now should not be in a position to complain about the work performed by their lawyers.
3. The Court considered whether the law firm’s charges were exorbitant, such that it can be said that the law firm took advantage of its clients. The Court held that this was not the case for two reasons. First, the law firm informed the clients of their billing procedures in the retainer agreement. Second, the Court held on review of the file that the clients were fortunate to recover the amounts and this was largely attributable to the good work of its lawyers.
The Court dismissed the Cross-Appeal by the Respondents as it was without merit. The Appellant was entitled to Costs in accordance with Schedule “C” of the Rules of Court.View CanLII Details