The Applicant, Sturgeon Lake Cree Nation, applied to invalidate the contingency fee agreement (“CFA”) that it signed with its lawyers, Rath and Company (“Rath”), along with the invoices issued under the CFA, on the basis that the CFA did not comply with Rule 10.7.

The Court considered Rule 10.7 and 10.8, taking note of the various mandatory requirements outlined for contingency fee agreements. If those requirements are not met, the lawyer’s charges are determined under Rule 10.2 (which entitles a lawyer to a “reasonable amount”) rather than an amount under the contingency fee agreement. The Court acknowledged the significance of Rule 10.7(7), which specifically addresses accounts issued under contingency fee agreements. According to this Rule, if an account fails to include a mandatory statement as required, it will be deemed ineffective, subject to the Court's discretion to grant relief under subrules 10.8(a) and (b).

The Court acknowledged the significance of contingency fee agreements in providing access to justice for individuals who may not have the financial means to pursue legal action. It emphasized the importance of adhering to Rule 10.7, recognizing that while the rule is mandatory, there may be some flexibility in certain circumstances. A distinction was made between minor technical violations of the Rules, which may be remedied, and more serious breaches that could invalidate an agreement.

In this case, the Court highlighted the specific requirements of Rule 10.7, particularly the mandatory processes outlined in subrules 10.2(g), (3), and (4). The history of the relationship between SLCN and Rath was taken into consideration, as they had previously engaged in hourly rate arrangements. However, the transition to a contingency fee agreement necessitated strict adherence to the Rules to ensure that SLCN understood the implications of the new arrangement.

Ultimately, the Court determined that the failure to comply with Rules 10.7(2)(g), 10.7(3), and 10.7(4) was not a minor issue that could be overlooked. As a result, the contingency fee agreement was deemed unenforceable, leading to the conclusion that any accounts issued under the agreement would also be invalid.