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#5 - Retention and Billing

“A lawyer must not charge or accept a fee or disbursement, including interest, unless it is fair and reasonable and has been disclosed in a timely fashion.”1


NOTES

1. Rule 3.6-1 of the Nova Scotia Barristers’ Society, Code of Professional Conduct, Halifax: Nova Scotia Barristers' Society, 2012 (“the Code”) adopted in 2012 (and related Commentaries) and Rule 77.13(1) of the Nova Scotia Civil Procedure Rules. (See Also: Chapter 11(a) of the Canadian Bar Association’s Code of Professional Conduct)

PRACTICE NOTES

Preamble

This standard reflects and is to be read in conjunction with the standard which has specifically addressed timekeeping.

The establishment of legal fees which are “fair and reasonable” and which have been “disclosed in a timely fashion” is not something which lends itself to a formulaic definition. Though the standard set out above may appear to be a simple one, it is far more difficult to put it into actual practice.

To be recalled is that retention and billing are far more than a commercial reality of the operation of any private legal practice. Retention and billing instead require aspects of certainty and predictability in order to meet statutory, regulatory and ethical requirements. This is an important aspect of private practice law office management.

The mandate of the Law Office Management Committee (LOMC) of the Nova Scotia Barristers’ Society is not to regulate lawyers’ specific approaches to their clients’ individual fee accounts nor lawyers’ specific advice and general legal services provided to their clients. Its mandate is to raise and discuss the statutory, regulatory and ethical imperatives which lawyers’ face in their retention and billing practices as well as to provide some advice with respect to suggested best practices in these areas. The anticipated result is to equip lawyers with the templates and tools necessary to ensure not only the certainty and predictability of their accounts but the defensibility of those accounts when and if they are challenged through taxation of other form of assessment.

Introduction

There are certain truths about retention and billing which lawyers cannot ignore. Regular, comprehensive and accurate time-keeping should form the basis of most structured approaches to retention and billing. Exceptions are recognized. They include, but are not limited to, fixed fees (either those specifically set for any particular transaction or matter or those which are routinely quoted for certain types of commoditized legal services). In such circumstances, lawyers should be careful to use retainer agreements which reflect the possibility for changing circumstances and the related possible requirement to deviate from fixed or quoted fees. See below for further information on this topic.

Lawyers understand the necessity of time management and recording from a value perspective. That is not to suggest that the predominant method or even the method most understood and favoured by clients for determining professional fees is the billable hour. We know that for many types of legal services that is simply not the case. Rather, many types of legal services have attracted and will continue to attract standard flat rate fees which have been established by market forces, are routinely accepted by clients and are entirely appropriate. That having been said, we also know that as a gauge to efficiency, profitability, risk management and billing justification, there are few if any law office management standards which are superior to the proper and effective docketing of professional time.

In fact, even if assessing the reasonableness of lump sum legal fee accounts, even in the legal services areas of practice wherein they are common, assessment and taxing officers, as well as the courts, will more often than not resort to an analysis of how much time was taken to perform the services in issue and how much time should have objectively been taken for them. It is on that basis that the LOMC submits that lawyers, who fail to keep time, fail at their peril.2

In making that statement, the LOMC fully appreciates and accepts that some lawyers, in particular types of legal practice, use the form of fixed fee model referred to above instead of keeping time; particularly in types of matters wherein the market has established a general fee range or where in those circumstances wherein it is generally possible to predict what a particular matter will entail in terms of time and expertise. Those lawyers should remain free to structure their related fee accounts on that basis; bearing in mind the overall regulatory and ethical framework that goes with any fee (including the above standard) and bearing in mind that contemporaneous time records will be a highly relevant factor in assessing the reasonableness of any contested fee account.

To be defensible (and therefore potentially recoverable), lawyers accounts must also be fair, reasonable and lawful.3 The reasonableness of a lawyer’s account is dependent on a variety of criteria. Only one of them is the amount of time taken by the lawyer to render the service which is the subject matter of the account.4 The implication, thus, is that a “reasonable” account would also be “lawful”.

Though the concept of “fair and reasonable” would stand to be affected by many criteria, including complexity, the results achieved and even, on the applicable jurisprudence, the clients’ abilities to pay, the concept of “disclosed in a timely fashion” undoubtedly relates to retention and to the disclosure of the expense consequences of the retention prior to the related services being commenced.

The Nova Scotia Civil Procedure Rules also speak to the matter in which lawyers’ entitlements to compensation are to be assessed. According to the Rules, lawyers are “entitled to reasonable compensation for services performed, and recovery of disbursements necessarily and reasonably made, for a client who...” has been the recipient of legal services.5 Once again, the Court’s concept of reasonable compensation has been benchmarked against a variety of criteria; some of which are all but totally incapable of any fine definition.6

General Billing Principles

McInnes Cooper v. Slaunwhite7, ("McInnes Cooper"), heard in early 2004, has set out and discussed some important retention and billing principles.

The areas of law covered by McInnes Cooper are made all the more complex in that lawyers and their clients rarely carefully define – if they define at all – the terms of the engagements in which they are involved. McInnes Cooper highlights this requirement.

Facts Underpinning McInnes Cooper

McInnes Cooper involved considerable sums. Senior lawyers had been engaged by a plaintiff severely injured in a car accident.
Given principles of vicarious liability applicable to the defendant driver’s employer, there were effectively no limits on the damages potentially available to the plaintiff.

There were also numerous factors which potentially cut in favour of the defendant driver. These included the Plaintiff’s alleged significant pre-existing conditions and diseases and the allegation that the plaintiff’s medical and physical conditions had been potentially compromised as a result of negligent post-injury medical care and treatment.

Not long before the plaintiff’s claims were scheduled to proceed to mediation, he retained new counsel. He sought and received McInnes Cooper’s assistance in readying his extensive file for transfer to his new counsel. In the end, McInnes Cooper’s comprehensive mediation brief formed the bulwark of the plaintiff’s appreciable mediated settlement.

McInnes Cooper had been acting for the plaintiff on a standard form Contingency Fee Agreement. The agreement contained the standard provision which permitted McInnes Cooper to recover on the basis of its docketed hours – and its normal hourly rates – in circumstances in which the firm was released from its retainer prior to the conclusion of its engagement. Although McInnes Cooper agreed to “hold” its account pending the outcome of the plaintiff’s claims while they were being mediated by his new counsel, it eventually claimed fees – calculated on the basis of its docketed hours and applicable hourly rates – of approximately $350,000. When the plaintiff refused to pay, the firm proceeded to taxation.

The Jurisprudence

Cohen v. Kealey and Blaney8 was referred to in McInnes Cooper as underscoring the importance of following certain billing principles which have arisen from a variety of procedural, ethical and common law standards set out over many years. Though not exhaustive, these principles usually include some iteration of the following:

1. The time expended.
2. The legal complexity of the matter(s).
3. The degree of responsibility assumed.
4. The monetary value of the matter(s).
5. The importance of the matter(s).
6. The degree of skill and competence demonstrated.
7. The result.
8. The ability of the client to pay.
9. The expectation of the client as to the amount of the fee.

As held in McInnes Cooper:

   When looking at the time dockets of a law firm, it is important to remember that the time dockets alone cannot be used to justify a solicitor/client account in totality. Instead, some ancillary evidence is required. That said, it is not incumbent upon me to review in detail every one of the time entries docketed. As was held by the Supreme Court of Nova Scotia in Tannous v. Halifax (City) (1995), 145 N.S.R. (2d) 23 (Per Goodfellow, J.), I am entitled to take an overall view of the law firm's account in determining whether or not it is reasonable. In doing so, I have considered both the law firm's overall account and many, but not all, of the individual time entries it comprises.

Reasonableness, the Overarching Principle

McInnes Cooper also highlighted the seminal test which has emerged in Nova Scotia jurisprudence regarding lawyers’ accounts: “reasonableness”.

In Blackburn English v. Ezuricke9 the Supreme Court considered a taxation decision taken on appeal from the Small Claims Court. The Supreme Court allowed the appeal and held that while the time spent by a counsel on a divorce proceeding was appropriate the counsel’s hourly charge-out rate was not. The Supreme Court found that the lawyer in Blackburn had worked hard on the matter and had been very effective in his representation of the client’s interests. There was thus no articulated concern over the lawyer’s docketed hours. Nevertheless, the Court reduced the lawyer’s rate from $250 to $175. There was no expressed reason for doing so and no indication from the Court’s reasons that it had analysed what the lawyer’s hourly rate should have been. Such is the risk from both the taxation process generally and from the failure to properly regulate the solicitor-client relationship through carefully drawn retainer agreements. And even then, there is no assurance that the Courts or the Taxing Officers will not so what was done in Blackburn.

The fact that the lawyer was senior (more than 30 years of experience) member of the Bar and a Queen’s Counsel does not appear to have played a role in the Court’s analysis. Instead, the Court appeared to have concentrated more on the “means of client”. Apparently ignored was that the hourly rate of $175 allowed was well below what would have ordinarily be charged by a similar lawyer. In short, the overall finding was not leastways consistent with the Court’s following observation:

   The Adjudicator, as I said, looked at the reasonableness of the services provided and, based on what I can see on the record and from what I have heard today, it is apparent to me that Mr. Ezuricke got effective and competent legal representation from Blackburn English and in particular from ...

The seminal authority in Nova Scotia on the reasonableness of a lawyer’s account is Lindsay v. Stewart, McKeen and Covert10. Lindsay underscored the notion that the taxation of a lawyer’s account is a fluid exercise. It is not dependent specifically on any one feature. It is not a science which is to be practiced empirically. Instead it is an exercise which attempts to bring facets of order to an amalgam of circumstances which are not easily reconcilable with each other.

Very often, the taxation of a lawyer’s account dissolves into an exercise in which attempts are made to reconcile individual time charges while each individual service is assessed retrospectively from the perspective of whether or not it was necessary or unnecessary. It is an approach which can lack fairness to clients and counsel alike.

Though this form of dissective approach remains inviting, especially to clients against whom claims are being made by their former lawyers, the more accepted role is to gauge a lawyer’s account in dispute against the broad backdrop of what appeared reasonable – all things considered – at the time the lawyer was undertaking the services provided. It is against this benchmark that lawyers must continually challenge themselves to adopt billing standards which will produce altogether reasonable results.

The Retainer

An important factor which almost always arises in the circumstances of a challenge to a lawyer’s bill is the question of whether the client was fully informed of the potential costs of the legal services provided. A mistake which lawyers routinely make is the failure to raise these costs issues in advance or the failure to properly note their clients’ agreements on these costs issues in writing. Carefully drafted retainer agreements are one solution. Good law office management standards should thus include template agreements to cover most of the legal services which are being offered.

Lawyers must remember that they bear the burden of proof in all cases of challenges to their bills. In other words, the client need not establish that a disputed bill is unreasonable; a lawyer must establish that it is reasonable. If there is no written agreement setting out the parameters of the retainer, particularly in the case of an unsophisticated client, the lawyer involved is setting up a difficult burden for himself or herself to meet.

The corollary, of course, is also true: if the terms of the lawyer’s engagement are clearly set out in a retainer letter or agreement, and the billing is consistent with the terms, the prospects of a lawyer’s successful defence against a disputed bill are far higher.

Better retainer agreements set out the lawyer’s expectations on all fees issues; including lump sums or hourly rates, the periodic changes to the latter, if anticipated, the method by which time will actually be docketed (and the application, if any, of minimum dockets), the use of colleagues and their applicable hourly rates, the billing frequency, expected payment terms, the application of specific interest on overdue accounts and the lawyer’s right to withdraw if unpaid over a specific period. Potential costs recovery from (or payment to) an opponent is also an important factor. More and more often, retainer agreements also set out litigation budgets or what each aspect of the matter is likely to cost the client. Finally, retainer agreements should look at related matters prospectively and should set out, as accurately as possible, how costs, including hourly rates, might change in the future. An example of a retainer agreement can be found in the Practice Notes to the Time Keeping Standards at Note 18.

It is also important to note that a lawyer should not be too concerned about a retainer agreement which becomes redundant as the matter to which it applies becomes more complex as it proceeds. It is often the case that what at first appeared to be a simple matter is one that will take more time and increased resources. The key in such circumstances is for the lawyer to document the complicating factor(s) in follow-up retainer agreements and to receive the client’s expressed authority to proceed with the matter and the costs associated with the further work to be done on the matter.

What About Contingency Fee Agreements

McInnes Cooper also considered that the relationship between the lawyer and client was predicated on a Contingency Fee Agreement. In such circumstances, the client can often see the relationship with the lawyer as a “no-lose” proposition. The client receives relatively unrestricted access to the lawyer and pays nothing for it unless successful. When there is then a change of counsel and the former lawyer is required (or entitled) to bill the client on a time basis, the establishment or assessment of a reasonable fee can become very difficult. It is therefore recommended that Contingency Fee Agreements be drafted with consideration to the possibility that the lawyer/client relationship will terminate with the result that applicable fees will have to be assessed on the basis of the factors set our above. Law firms working on contingent fee arrangements are encouraged to engage in proper timekeeping.

One of the keys to a lawyer’s ability to maintain a claim for fees subsequent to a terminated contingency fee arrangement is careful and complete time dockets setting out professional time and effort expended to the date of termination. Without that evidence, fees are still recoverable; though more on a quantum meruit basis and at the risk of a reduction.11

Also to be considered is that in a solicitor and client Taxation, a Contingency Fee Agreement will only comprise a part of the evidence which the Taxing Officer or Court will consider. Though the stated percentage may establish the client’s prima facie fee, Taxing Officers and Courts routinely inquire into the true nature of the contingency, the real risk of the lawyer not recovering a fee at all and the reasonableness of the contingent fee charged given the precise legal services which were rendered – more often than not measured by way of available time records. The frequent result of such exercises is the reduction of the lawyer’s fee notwithstanding the terms of the Contingency Fee Agreement.

The decision of the Supreme Court of Nova Scotia (per: LeBlanc, J.) in Elwin v. Nova Scotia Home for Coloured Children12 is instructive. Relying largely on the decision of the Federal Court of Canada (per: Barnes, J.) in Manuge v. Canada13 2013 FC 341, LeBlanc, J. held as follows with respect to time records:

   As will be clear from the comments above, the time actually spent by counsel is a matter of some concern to the court in this case. There can be no question that the class proceeding (as well as the predecessor individual proceedings) involved a great deal of effort by multiple lawyers over an extended time. I am reluctant to place as much reliance on the records as [counsel] initially suggested I should, but I am prepared to accept that thousands of hours were spent by [counsel] and others in his firm in the course of the class proceeding and the predecessor individual proceedings. I would add that such material was not originally sought by the court. Class counsel provided specific time estimates for individual lawyers with the first set of submissions. It was these estimates that raised concerns, which were exacerbated by the affidavits provided later.14

Though the Commitee underscores the general desirability of the incorporation of retention and billing standards so as to perhaps ameliorate the possibility of findings such as those in Home For Coloured Children and in the other references authorities, it also appreciates that there are many lawyers who conduct highly sophisticated and highly client accessible practices based largely of not exclusively on contingent fee agreements and on the basis that they will simply accept the risk of an adverse taxing finding should they fail, for example, to keep time.

Multiplicity of Legal Personnel

While it was at one time common for lawyers to assign multiple lawyers and other staff members to their matters, such multiple personnel assignments are becoming much less common. In fact, many general counsel and insurance claims examiners are reluctant to authorize their lawyers to engage with multiple personnel. There are exceptions; but they relate normally to highly complex matters or matters in which there will be many witnesses, voluminous documents or both.

An issue which arose in McInnes Cooper was the client's assertion that the lawyer had engaged too many colleagues and that there what had resulted was an overlap in the legal services which each provided. Though the lawyer successfully rebutted the allegation, the general concept rings true. Care should be taken to guard against it.

In Canada Trustco Mortgage Company v. Homburg15, our Supreme Court was critical of the apparently haphazard approach by which the lawyer went about assigning other lawyers to the prosecution of a complex foreclosure. A total of nine lawyers had provided services on the file from time-to-time. It was found by the Supreme Court that there had been considerable overlap. As lawyers left the firm, they were replaced by others; each of whom effectively had to re-learn the file – or, as it was held, “re-invent the wheel”. The lawyer’s fees were substantially reduced.

Use of Junior Lawyers, Paraprofessionals and Assistants

Tied closely to the issue of multiple lawyers being assigned to a single matter is the issue of the valuation of the time docketed to any given matter by so-called “juniors”. Adjudicator W. Augustus (“Gus”) Richardson, Q.C. of the Small Claims Court of Nova Scotia has considered this issue and has provided some guidance in Burchell Hayman Parish v. Sirena Canada Inc.16:

   The relative inexperience of a junior lawyer does not in and of itself warrant discounting its [sic] value. It does, however, raise the possibility that the lawyer might spend more time than necessary (that is, more than would be reasonable for a reasonably experienced lawyer in the field) performing the work in question. In my opinion on a taxation the standard to be applied in evaluating the reasonableness of a lawyers account includes an assessment of the amount of time it would take a reasonably competent lawyer with several years experience to perform the services at issue.
   …
   This of course poses a problem to the client. A client is entitled to expect good work (which it received in this case). But is should not be required to pay for the learning experience of a junior: Goodman v. Tempermendrum Limited
17

Adjudicator Richardson’s comments have been routinely endorsed and applied by other Adjudicators. As such, the standard approach is to consider the amount of time any reasonably competent lawyer would spend on any given task. If the time sought to be recovered by way of a fee account is disproportionate, it should be adjusted or disallowed. The only exception is where the junior lawyer whose time is being assessed carried an hourly rate much lower than that which would be charged on average by the reasonably competent lawyer carrying out the task in question. In the end, the analysis should always be about value received. If there is value received for the work of a junior lawyer, then his or her time should be allowed in full.

Value to the Client Test

In Roebuck, Garbig v. Albert18 the court articulated three important principles when looking at the value a client received from legal services rendered on their behalf:

1. The ability of the client to pay;
2. The results achieved; and,
3. The reasonable expectation of the client as to fees.

The summation of the above principles leads to a single thrust of the lawyer’s billing process: the value to the client. Though trite, the work that a lawyer does for a client must have value in order for the client to be billed. The value is measured against the ability of the client to pay, the reasonable expectation of fees and (to a lesser degree) the results achieved.

It is the duty of the lawyer to fully inform the client of the reasonable prospects of success and the potential cost of pursuing different legal options. The informed consent is best captured in a retainer agreement to ensure that both parties possess an understanding of the relationship going forward. Finally, the lawyer’s bill must be reasonable against the above mentioned principles.

In Conclusion

Mark M. Orkin, Q.C. points out in “The Law of Costs” (2nd Ed.) that:

   A solicitor's bill of fees, charges or disbursements is sufficient in form if it contains a reasonable statement or description of the services rendered with a lump charge therefore, together with a detailed statement of disbursements. The object of a bill of costs is

    "... to secure a mode by which the items of which the total sum are made up, should be clearly and distinctly shewn, so as to give the client an opportunity of exercising his judgment as to whether the bill was reasonable or not ... ".

    A bill for professional fees is, therefore, sufficient if it sets out an account of the services rendered itemized so that the reasonableness of the charges may be ascertained by the client. The contents of the bill must, however, show sufficient information to enable the assessment officer to determine whether or not the charge is reasonable. It is not necessary in the first instance to give details or charges or items, such as the time occupied in consultations, folios contained in a conveyance, or detailed statements as to attendances or searches; but the solicitor is under a duty to render a bill containing such a general statement of the services as would enable another solicitor to advise the client as to the propriety or reasonableness of the bill. In any action upon or assessment of a bill, further details of the services rendered may be ordered. If the bill as delivered does not comply with the statute because it lacks a reasonable statement of the services for which the fee is demanded, leave may be given to deliver a further bill in extended form which will comply.19

It can be reasonably expected that the determination of that to which a lawyer is entitled by way of payment for the services rendered will continue to be a difficult exercise. As such, the best likely perspective on what the lawyer’s bill should be remains the value to the client concept.

Value to the client is an amorphous concept. It must be assessed objectively. The test is what the services should have cost. Though the lawyer has considerable flexibility in determining what to charge, the flexibility is not limitless and must be based on the few standard precepts which have been set out above.

Getting paid is, and will remain, a challenging part of what the legal profession does. The best approach, therefore, is to define in advance as many variables to the solicitor-client relationship as are possible. The more which is set out in advance, the more certain the billing process will likely be.


END NOTES

2 See for example: Mor-Town Developments Ltd. v. MacDonald, 2012 NSCA 35 (at para 49). To be noted is that Mor-Town related to a commercial property transaction in which the client complained about the legal fees charged by the lawyer only after the legal fees had been paid. Amongst other things, the lawyer argued that the client had no right to an assessment or a taxation of those fees once they had been paid. The Court of Appeal disagreed. The Court of Appeal also held in all circumstances wherein a lawyer’s account is being challenged, the lawyer bears the onus of demonstrating that the account is reasonable. One such message is in reference to the time it took for the subject legal services to have been performed.

3 When considering the fairness, reasonableness and legality of accounts for legal services, general resort should be had to s. 66 of the Legal Profession Act, S.N.S 2004, c. 28; rule 3.6-1 of the Nova Scotia Barristers’ Society’s Code of Professional Conduct, Halifax: Nova Scotia Barristers' Society, 2012; and Rule 77.13(1) of the Nova Scotia Civil Procedure Rules. These statutory and regulatory provisions express a constant theme but they do not do so in the same way and through the use of the same nomenclature. (see also: Chapter 11(a) of the Canadian Bar Association’s Code of Professional Conduct)

4 See for example: McInnes Cooper v. Slaunwhite, (infra at end note 10) and Lindsay v. Stewart MacKeen & Covert (as that firm was then known), [1988] N.S.J. No. 9

5 Rule 77.13(1)

6 See: Rule 77.13(2): “The reasonableness of counsel's compensation must be assessed in light of all the relevant circumstances, and the following are examples of subjects and circumstances that may be relevant on the assessment... (a) counsel's efforts to secure speed and avoid expense for the client; (b) the nature, importance, and urgency of the case; (c) the circumstances of the person who is to pay counsel, ...; (d) the general conduct and expense of the proceeding; (e) the skill, labour, and responsibility involved; [and] counsel's terms of retention, including an authorized contingency agreement, terms for payment by hourly rate, and terms for value billing.”

7 [2004] N.S.J. No. 276, 241 N.S.R. (2d) 12

8 [1985] O.J. No. 160 10 O.A.C. 344 (Ont. C.A.)

9 (2007), 2008 Carswell N.S. 232

10 [1988] N.S.J. No. 9, 47 D.L.R. (4th)

11 At least to be considered by lawyers engaging in retainers based on Contingency fee Agreements is that the Courts generally take a very conservative approach to the determination a lawyer’s entitlement to fees. The Decision by the Supreme Court of Nova Scotia (Per: Smith, ACJ) in Wade v. Burrell, 2011 NSSC 60 (CanLII) is one such example. There, Smith, ACJ was tasked to consider a lawyer’s fee account which was sought on the basis of a Contingency Fee Agreement. Though the Decision by Smith, ACJ is difficult to parse, a few factors arising from it can safely be summarized here. First, careful time records were kept by the lawyer. They commenced with his work on the matter the day following his retention. Second, the hourly rates initially stipulated by the lawyer were held to have been reasonable, as were the annual increments by which the lawyer increased those hourly rates. Third, at normal hourly rates, the lawyer’s fee account would have been approximately $197,000 less than that which the lawyer sought to charge by way of his Contingency Fee Agreement ($195,000 as opposed to $392,000). Fourth, the matter overall was complex and the lawyer was held by the Smith, ACJ to have demonstrated an admirable degree of persistence which resulted in significant recovery for the Plaintiff beyond the available policy limits in issue. Fifth, the lawyer was not required to shoulder considerable risk – though the matter was indeed complex, liability for the Plaintiff’s injuries was not in issue. Sixth, the lawyer has himself sought a fee discounted from that to which he was entitled on the strict wording of the relevant Contingency Fee Agreement. Seventh, the Plaintiff was an infant who had sustained catastrophic injuries and whose costs of future care may outstrip his recovery, net of his litigation expenses. Eighth, the lawyer “carried” the matter for a decade (unit the Plaintiff’s injuries had plateaued to the point that his prognosis and cost of future care could be considered. On the basis of all of these factors, and applying the “fair and reasonable” test to the settling of all legal fee accounts, Smith, ACJ awarded/approved a fee account of $280,000. And this was on the basis of several overarching factors which clearly favoured the lawyer’s fee on the basis of his Contingency Fee Agreement alone. See end note 14 for additional relevant commentary. And see also the decision of the Small Claims Court of Nova Scotia (Per: Slone, Adj.) in .Rhodenizer v. M.W., 2014 NSSM 30 (CanLII). At issue in Rhodenizer was a disputed legal account which the client alleged was too large given what was contended as a “fixed price retainer” and what was contended as unnecessary or wasteful effort. After considerable analysis by Adjudicator Slone, the client’s allegations were dismissed and the lawyer’s account was held to be payable in full.

12 2014 NSSC 375

13 2013 FC 341

14 At para. 45. Home For Coloured Children is acknowledged for the purposes of these standards as a class action proceeding and not a straight Contingent Fee Agreement proceeding. That said, many of the principles which apply to the calculation and approval of fees in class proceedings also apply, mutatis mutandis, to the calculation and approval of more standard forms of contingent fees. But see also the Decision of the British Columbia Court of Appeal (Per: Newbury, J.A.) in Mide-Wilson v. Hungerford Tomyn Lawrenson and Nichols, 2013 BCCA 559 (CanLII). There, Newbury, J.A. was required to consider the application of a Contingency Fee Agreement which would have resulted in fees which were several times greater than those which would have been produced by way of a retainer/fee agreement based on the lawyers’ normal hourly rates. Also at issue was the sophistication of the client, her significant wealth (which made it entirely possible for her to pay for the legal services she required on the basis of normal hourly rates) and her specific request of the lawyers that they undertake her representation on contingency. And once again, the Decision in Mide-Wilson is difficult to parse; except perhaps for some overarching findings which include the integrity and fidelity of the legal profession as a trump on the freedom and sanctity of private contract, the fact that Contingency Fee Agreements are not lottery tickets and cannot be used in the justification of lawyers’ fee accounts which are out of proportion with their efforts and the risks they have undertaken and that lawyers’ fees must always be capable of fair and reasonable justification. It was on that basis that Newbury, J.A. agreed to the “roll back” to $5Million a fee account which if calculated on the basis of the applicable Contingency Fee Agreement would have been approximately $17Million.

15 (2000), 180 N.S.R. (2d) 258

16 [2006] Carswell NS 520, (at paras. 17 and 21)

17 (1991), 25 A.C.W.S. (3d) 169 (Ont. Assess.O.). See also Canada Trustco Mortgage Co. v. Homburg, [1999] N.S.J. No. 382 (N.S.S.C.) and Miller v. Johnson (2006), 247 N.S.R. (2d) 297 wherein it was held that: “As a rule, a client should not be expected to pay for the training of young lawyers or students. There is no doubt that such work does give value to the client (and for that the client should expect to pay), but there is equally no doubt that in [the] ordinary course some of the time spent performing the work is composed of false starts, or looking at precedents that will later be known by heart.”

18 [1992] O.J. No. 1113 (Ont. Assess. O)

19 Section 302.2

Approved by Council on June 13, 2015