SETTLEMENT OF PERSONAL INJURY CLAIMS BEHALF OF PERSONS UNDER A DISABILITY. by: Andrew C. Murray. Presented Conference "Colloquium 2013" CPD

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1 at The Sudbury District Law Association Presented Conference "Colloquium 2013" CPD by: Andrew C. Murray Submitted LLP Lerners & Solicitors Barristers Box 2335 PO OF PERSONAL INJURY CLAIMS SETTLEMENT BEHALF OF PERSONS UNDER A DISABILITY ON October 17 t" and 18 t", 2013 London Ontario N6A 4G4 Phone: ,6313

2 INDEX Introduction 1 The Historical Context 1 The Current Regime Ru/es of Civil Procedure 4 Issues 5 (a) Required Evidence 6 (b) Legal Fees 8 (c) Recent Judicial Comment on Contingency Fees in Rule 7 Context 17 (d) Use of Settlement Funds 19 (e) The Children's Lawyer 23 (f) Public Guardian and Trustee 24 Practice Points 25 Tab Solicitors Act, R.S.O. 1990, Chapter S.15 1 Ontario Regulation 195/04 Contingency Fee Agreements 2 Office of Public Guardian and Trustee Fee schedule 3 Foster v. Foster- Endorsement of Justice Granger, August 23, Checklist for Applications to Appoint a Guardian 5 Appendix "A" Checklist for Motions for Approval of Settlements for Parties Under Disability Under Rule

3 reasonableness of solicitor fees for services. It will suggest best practices for applications or her benefit or welfare". 4 Franklin (Litigation Guardian of) patriae", literally "parent of country", refers traditionally "Parens role of state as sovereign and guardian of persons under legal to State of W. Va. v. Chas. Pfizer & Co., C.A.N.Y., 440 disability. 1079, It is a concept of standing utilized to protect F.2d quasi-sovereign interests such as health, comfort and those of people, interstate water rights, general economy of welfare Baebz (1998), 41 O.R. (3d) 257 (C.A.) Tsaoussis Woo, 2006 CanLI Ontario C.A. at para.10 Re Neimstein & Associates, [2000] O.J. No (C.A.) INTRODUCTION This paper reviews past and current approach to settlements of claims on behalf of minors and mentally incapable people. In particular, it considers evidence required to allow Court to determine if proposed settlement is in best interests of claimant; and under Rule 7 of Rules of Civil Procedure. While this paper is not a direct response to cases like Marcoccia v. Gill 2 or Lau v. Bloomfield, by necessity, several of problems identified in se decisions will also be reviewed and discussed here. THE HISTORICAL CONTEXT The requirement for Court approval of settlements made on behalf of parties under a disability is derived from Court's parens patriae jurisdiction. The parens patriae jurisdiction is of ancient origin and is "founded on necessity, namely need to act for protection of those who cannot care for mselves...to be exercised in best interest of protected person, for his Black's Law Dictionary describes "parens patriae" on following terms: state, etc. This paper relies heavily on a paper presented in November 2007 to The Middlesex Law Association, with appropriate updates. Much of is, however, a word- for-word repeat of my earlier paper. commend detailed, recent best practices paper which is also being distributed at this conference. 2 unreported decision of The Honourable Justice Wilkins released January 2, unreported decision of The Honourable Justice Spies, dated August 24, Re Eve, [1986] 2 S.C.R. 388 at para.73. Also see,

4 patriae originates from English common law where Parens had a royal prerogative to act as guardian to persons with King settlement of a claim made by or against a person under No wher or not a proceeding has been commenced in disability, of claim, is binding on person without approval respect a Judge. of This rule codifies what was historically practice in all infant settlements (now more properly (1) Any money payable to a person under disability under an 7.09 or a settlement shall be paid into Court, unless a judge order Any money paid to Children's Lawyer on behalf of a (2) under disability shall be paid into court, unless a judge person -2- legal disabilities such as infants, idiots and lunatics. 5 The requirement for Court approval of settlements involving parties under disability has now been codified in Ontario by creation of Rule 7.08(1 of Rules of Civil Procedure: described as a settlement on behalf of a party under a disability). For centuries, Judges of ensure that Superior Court have exercised parens patriae guardianship of sovereign to rights of infants and ors legally disabled are protected. 6 Similarly, Rule 7.09 was also a codification of previous practice relating to payment of money into Court. Rule 7.09 provides: MONEY TO BE PAID INTO COURT orders orwise. orders orwise. 5 Black's Law Dictionary, Definitions of Terms and Phrases of American and English Jurisprudence, Ancient and Modern, Henry Campbell Black, Fifth Edition, St. Paul Minnesota West Publishing Co Ruebz Morscherand Morscher(1996) 20 O.R. 3rd 545, decision of Justice Salhany O.C.G.D.

5 Under Rules of Practice, multiple rules addressed cases involving minors and mentally courts are vigilant when it comes to best interests of Our and this paternalism, unfortunately, is necessary. children; with experience in trying or hearing matrimonial cases Anyone that parents often act in a manner which is not in best knows of ir children. do not think it is necessary for me to interests my words with any delicacy here and so say, quite directly, select in my view, subrules 7.08(1) and (2) and 7.09(1) are part of that, law of this province because parents cannot always be trusted do what is best for ir children. Undoubtedly this statement to be galling to caring, thoughtful, wise and understanding will However, fact is that most laws are aimed at those parent. to break m. 8 inclined Mental Incompetent, Rule 22 Litigation Guardian, Rule 92 Litigation Guardian, Rule 93 Appointing Litigation Guardian, Rule 94 Appointing -3- incapable persons, although no rule specifically dealt with approval of settlements in personal injury claims, as is now provided by Rule 7. 7 The rationale behind requirement for Court approval, and payment into Court of funds on behalf of a party under a disability, was succinctly described by Justice Quinn in Hoad v. Giordano as follows: As a plaintiff lawyer, it is my own suggestion that parens patriae jurisdiction of Court is not intended to see persons under disability treated differently from persons who are capable of instructing counsel. Rar, purpose is to ensure that vulnerable claimants are not taken advantage of by ors. Reasonable terms of settlement, wher on matter of quantum of damages or reasonableness of fees, should be considered objectively, based on reasonable person standard. 7 see following Rules of Practice: Rule 18 Minors, Rule 19 Recovery of Goods or Land From Minor, Rule 20 Tort Money Claim Against Minor, Rule 21 Guardian, Rule 95 Mental Incompetent, Rule 96 Mental Incompetent, Rule 97 Mental Incompetent, Rule 98 Mental Incompetent or Litigation Rule 99 Person Declared Incapable, Rule 100 Consent of Litigation Guardian Absentee, 8 Hoad Giordano, [1999] O.J. No. 456

6 if party is a minor between ages of 16 and 18, that minor's consent in writing; There is no specific mention in Rule 7 neir permissive language nor prohibitory language clients not under disability. under a -4- THE CURRENT REGIME RULES OF CIVIL PROCEDURE Rule 7.08(4) sets out material that is required to be placed before a Judge on a motion or an application for approval of a proposed settlement on behalf of a party under a disability. It shall include: an Affidavit from Litigation Guardian which sets out material facts and reasons that support proposed settlement, along with Litigation Guardian's position concerning proposed settlement; an Affidavit from solicitor that sets out solicitor's position in respect of proposed settlement; and a copy of proposed Minutes of Settlement. with respect to issue of legal fees that may be charged by plaintiff's counsel in connection with a proposed settlement. With regard to legal fees, one issue, is wher lawyers acting for persons under disability ought to be compensated on some basis different from that used for The Rule has no specific directive with respect to structured settlements as y relate to parties disability. There is no specific provision dealing with intended manner of holding settlement funds on behalf of party under a disability.

7 when making a payment into Court. It does not itself outline when or why money should be paid There is no question that requirements which must be satisfied to obtain approval of a settlement of a party under disability can often seem murky, if not capricious. settlement of actions on behalf of parties under a -5- Rule deals with payment into Court, but it only deals with procedure to be followed into Court. Rule 7.09, already described above, is provision which directs that money payable to a person under a disability shall be paid into Court, unless a Judge orders orwise. There is no rule describing when Judges ought to exercise ir discretion to order orwise, and very little case law on point. Despite this, Courts have readily accepted structured settlements as a preferred vehicle for managing settlement funds on behalf of persons under disability. Although motions for approval under Rule 7 occur daily at courthouses across province, re are surprisingly few decisions dealing with Rule 7. The decisions which exist often involve very large claims, or relate to issues of legal fees. For example, commentary in Watson & McGowan's 2014 text on Ontario Civil Procedure only mentions two cases dealing with Rule It appears that different practices and protocols have developed in various regions of province. 1 There should be more consistency to practice and procedure for obtaining court approval, though effort involved should always be proportionate to interests at stake. ISSUES There are a number of issues worthy of mention in a discussion paper dealing with disability, which include: 9 See Martin v. Robins, March 6, 2006, unreported decision of Justice Quinn Hoad Giordano (1999), 30 C.P.C. (4th) For example, Alberta has enacted legislation called "Minors' Property Act', in which s.4 deals with settlement of minors' claims. In Nova Scotia, some case law refers to solicitors account, in connection with a minor, being sent to an Assessment Officer for taxation, even if a valid Contingency Fee Agreement is in place.

8 persons under disability; specifically dealing with circumstances in which it might be preferable for a -6- (a) Required Evidence for Court approval --The scope and clarity of material to be provided to Court on a motion under Rule 7 for approval of a proposed settlement; (b) Legal fees Appropriate compensation for legal fees for services rendered to (c) Use of settlement funds --The appropriateness of a practice direction Judge to "order orwise" and have monies directed somewhere or than being paid into Court; (d) The Children's Lawyer/Public Guardian The extent of role of Children's Lawyer and/or Office of Public Guardian and Trustee; (e) Procedure The preferred procedure for obtaining Court's approval should re be hearings in open Court, an attendance in Judges' Chambers, or basket motions? (a) REQUIRED EVIDENCE Affidavit material filed in support of application must be sufficient to allow Court to make a final determination of all matters in issue. Consequently, evidence presented to Court must be comprehensive, thoroughly covering all matters which might impact on determining if proposed settlement is in best interests of disabled party. As stated above, requirements for Court approval ought to be proportionate to interests involved. That is, for approval of small Family Law Act claims, particularly those involving deductibles under Insurance Act, expense involved in obtaining Court approval ought not to be

9 evidence supporting and justifying use of settlement funds proposed on to -7- disproportionate to damages recoverable. It certainly shouldn't be more than value of actual claim! Where person under disability is main party and has suffered more substantial damages, more ought to be required by Court. It is recommended that, at a minimum, solicitor's Affidavit, when setting out solicitor's position in respect of proposed settlement in se cases, ought to include a narrative discussion addressing following issues: liability, including positions taken by all parties to proceeding, backed up by documentation in support of various positions. a discussion of treating, consulting physician and experts' opinions, both plaintiff and defence, with respect to nature of injury/disability, long-term prognosis, need for future care, possibility of a reduction in income-earning potential, and, if appropriate, life expectancy. where appropriate, a detailed description of position taken by defence on damages, including excerpts from discovery transcripts and or evidence relied resist plaintiff's claim= where appropriate, a description of all steps taken in proceeding to advance plaintiff's case (including motions, interviews with witnesses, consultations with experts, mediations, pre-trials, and or developments) recommendations for distribution and use of settlement funds, along with detailed intended retainer agreements, as entered into by Litigation Guardian and plaintiff's solicitor, should be included in material.

10 reasons for settlement vs. apportionment of damages to various heads of damages. In Ontario, prior to introduction of contingency fees, courts recognized appropriateness cases involving persons under disability. It has certainly been recognized by our Courts that personal injury litigation is inherently risky. -8- intended fees to be charge to disabled person and sufficient support to justify fees. proceeding to trial. confirmation of insurance policy limits applicable to case. allocation of partial indemnity costs and disbursements. proposed management of funds. (b) LEGAL FEES of allowing lawyers to be awarded legal fees over and above partial indemnity costs paid by defendant, in The principles that apply to lawyers' fees in cases involving persons under disability have been evolving in last decade. Generally, it is my position that Rule 7 and parens patriae jurisdiction of Court was not intended to confer a benefit on disabled by making ir legal fees lower than ors. Rar, protection afforded should ensure that disabled are not disadvantaged when compared to those capable of instructing counsel. Persons under disability inevitably are unable to fund ir litigation and would be without adequate remedies if capable lawyers were unwilling to represent m and assume economic risk of prosecuting ir claims. Madam Justice Thorburn had following to say about fees in personal injury matters:

11 is easy after fact to underestimate risk faced by "...it in accepting retainer and contribution made by solicitor There is an element of uncertainty in plaintiff's personal solicitor. work that may entitle a plaintiff's solicitor to compensation injury and above value of time spent calculated on basis over docketed time. of cases are lost or settled for very small amounts. In or Some solicitors investigate and assess prospective claims and cases clients who do not pursue a claim. In some cases advise change significantly during litigation. In many circumstances solicitors carry cases for lengthy periods. Some cases cases be tried in which case financial risk taken by solicitors will is important that fees must also be fair to solicitor so as It ensure that persons under a disability have access to to legal counsel who will be able to vigorously purs[u]e competent claim on behalf of person under a disability. ''11 discussion dealing with claims by solicitors for legal fees in an amount that exceeds party Court of Appeal in Cohen v. Kealey 13 when determining proper quantum of a solicitor's legal -9- dramatically. In many of se circumstances re is a increase risk that plaintiff will be awarded little or nothing substantial and that solicitors will be paid nothing. These more recent comments from bench are supported by older jurisprudence. The 1990 decision of Justice Osborne in Stribbell v. Bhalla, which dealt with a minor plaintiff who successfully claimed damages for medical malpractice, is a noteworthy starting point for any and party costs/partial indemnity costs provided by defendant. It is important to observe that Justice Osborne's decision was rendered at a time when contingency fees were not legal, per se, in Ontario. Stribbell v. Bhalla is a carefully worded decision that skirted reality of outcome-based fees in high-risk litigation advanced on behalf of parties under a disability. Justice Osborne considered factors identified by Ontario account: 11 See endorsement of Madam Justice J.A. Thorburn in Rivera v. LeBIond, Court File No. 04-CV CM2, March 6, (1990), 73 O.R. (2d) (1985), 10 O.A.C. 344

12 taxing officer properly listed considerations normally The to taxation of a solicitor's account, namely, time applicable with, degree of responsibility assumed by solicitor, dealt monetary value of matters in issue, importance of to client, degree of skill and competence matter by solicitor, results achieved, ability of demonstrated client to pay, and client's expectation as to amount of fee. requires that deserving actions be prosecuted by Justice counsel, and competent counsel are entitled to be paid competent reasonable fee for value of work done think that, a entirety of circumstances surrounding this litigation when considered, plaintiffs' counsel are entitled to a fee above party are party costs. and own decision, Desmoulin v. Blair 14 The Court of Appeal, in addition to factors that had been mentioned in Cohen v. Kealey, as important as ir interests are, y must be balanced But risks that law firm undertook and result it against for its clients and, refore, for victims. The reality achieved that, but for ( plaintiffs' counsel) having assumed this risk, is -10- expended by solicitor, legal complexity of matters to be Ultimately, Justice Osborne held: The Court of Appeal specifically endorsed Justice Osborne's decision in Stribbell v. Balla, in its recognized that, implicit in phrase "degree of responsibility assumed by solicitor", is risk of non-payment, should action not succeed. The Ontario Court of Appeal considered issue once again in Re Christian Brors of Ireland and Canada.15 The Court of Appeal considered wher or not a premium ought to be paid to law firm that advanced claim on behalf of plaintiffs who "suffered unspeakable acts of sexual, physical, and emotional abuse" at hands of Christian brors. The Court of Appeal said: 14 (1994), 21 O.R. (3d) [2003] O,J, No. 4249

13 estate would have had no money at all to compensate victims. The risks faced by personal injury lawyers are substantial in many cases. Without a premium context of motor vehicle litigation, lawyer faces additional risks associated with liability is met, award is reduced by a substantial deductible 1. Both increase risk for plaintiff's when insurers are persuaded to settle no-fault file on a lump sum basis, y are not obliged assume carriage of se highly volatile cases, few would get access to justice. Even fewer will get access to justice when counsel cannot reasonably predict what fees can be charged in event of a successful outcome for plaintiff. See Section of Insurance Act, R.S.O. 1980, C. I-8, as amended. The threshold is permanent serious disfigurement or permanent serious impairment 16 an important physical, mental or psychological function. The threshold is defined in Ont. Reg. 381/03. of -11 earned in cases with a more certain outcome, plaintiff lawyers will have to decline those with less certain outcomes, depriving some persons under disability of access to justice. In limiting rules. Claimants face a verbal threshold 16 in automobile accident cases. Injuries which fail to meet threshold result in no compensation for pain and suffering. Even if threshold counsel. Tort claims arising out of automobile accidents ordinarily require lawyer to assume carriage of plaintiff's claim for first party (no-fault) benefits. Prior to litigation being commenced, re is no obligation for first party insurer to pay any legal costs associated with this time consuming and expensive service provided to claimant. Moreover, while it is frequently in best interests of injured party to receive a lump sum on account of future entitlement to first party benefits, insurers have no obligation to lump out se benefits. Even to pay legal costs. Perhaps greatest risks faced by plaintiff's counsel is in context of medical malpractice litigation. The financial commitment in terms of disbursements and time is enormous. The outcome, particularly at outset, is most uncertain in vast majority of cases. But for few competent counsel willing to 17 The deductible on non-pecuniary general damages is $30,000, unless claim is assessed over $100,000.

14 Court file. These are matters that do not arise when plaintiff is competent. If re is uncertainty about legal fees, potentially trial. The result for lawyer is a delay in payment for many years and risk of non-payment -12- Acting for persons under disability is inherently more expensive than acting for competent claimants. There is also more responsibility for lawyer. Offers to settle, agreements on damages and or steps taken to save costs or expedite proceedings require extra steps and expense of Court approval. Instructions, though taken from a litigation guardian, could need approval by Children's Lawyer or Public Trustee and, in every case, ultimately Courts. In seeking Court approval at any stage great care must be taken by lawyer not to disclose information that might have a detrimental impact on disabled person's case. Justifying a compromise of plaintiff's claim requires a clear explanation of difficulties leading to a compromise. Consideration must be given to taking extra step of sealing The matter of legal fees will also present practical matters for lawyers who consider representing persons under disability. legitimate claims may not be pursued. For example, lawyers will be discouraged from pursuing derivative Family Law Act claims for persons under disability. This is an access to justice issue. For all practical purposes, se claims cannot be pursued without a lawyer willing to underwrite cost of and take risk associated with m. Uncertainty about fee arrangements will deprive se claimants of access to justice. Personal injury litigation for persons under a disability require lawyers to take on cases on behalf of impecunious plaintiffs with ability to recover fees only from a favourable settlement or judgment. This applies to both fees and to disbursements. Disbursements are paid by lawyers to third parties from outset of litigation that can take many years to resolve or reach if success is not achieved, giving rise to a need to provide an incentive to plaintiff's counsel

15 A solicitor for a person under a disability represented by a 5(1) guardian with whom solicitor is entering into a litigation -13- factors recognized by Supreme Court of Canada in Walker v. Ritchie. 18 As well, encouraging competent counsel to act on behalf of personal injury clients (by allowing a premium to be charged) has been recognized as one rationale for contingency fees. 19 Wher legal fees are paid pursuant to a contingency fee arrangement or solicitor client fees are paid over and above partial indemnity costs collected, payment of se amounts are deducted from claimants recovery. This fact ought not to have a bearing on reasonableness of legal fees. "The reality is that a plaintiff will never recover 100% of an award or settlement because re will always be fees to be paid. ''2 As well, matters of risk, potential divided liability, interests of avoiding a costly trial and potential matter of inadequate insurance limits have same effect on claimant. Moreover, a settlement, which is ordinarily a result of negotiation, will not be achieved without some compromise. The reasonableness of result-based lawyers' fees for persons under a disability is reinforced by legislative changes permitting contingency fees. By way of amendments to Solicitors Act 21, in 2002, Contingency Fee Agreements were formally introduced into Ontario with a very specific framework developed for ir implementation. Ontario Regulation 195/04 was later introduced to provide furr regulatory direction with respect to implementation of contingency fees ("Contingency Fee Regulation"). Section 5 of Contingency Fee Regulation specifically addresses Contingency Fee Agreements as y pertain to persons under a disability. It states: contingency fee agreement shall, 18 Walker v. Ritchie, [2006] S.C.J. No. 45, at paragraph Ibid, paragraph Madam Justice Toscano Roccamo in Williams Bowler, 2006 CanLii R.S.O. 1990, c.s.15, as amended

16 apply to a judge for approval of agreement before (a) is finalized; or agreement a particular Contingency Fee Agreement is appropriate. Section 5 provides legislative approval under a -14- (b) include agreement as part of motion or application for of a settlement or a consent judgment under rule 7.08 of approval Rules of Civil Procedure. Earlier case law remains helpful for identifying appropriate principles that should be applied when determining fees to be approved for a solicitor; however, those earlier cases must now be read in light of reality that a true contingency fee regime has been brought to province. Contingency Fee Agreements, in one sense, simplify process, while at same time complicate it in terms of documentation that is required in order to satisfy Court that of contingency fees for persons under disability, while preserving right for judicial review and approval. Some concern has been raised by Judges in province of Ontario, and perhaps by officials with Children's Lawyer's Office and Office of Public Guardian and Trustee, in that plaintiff's counsel are not properly documenting retainer agreements which purport to be contingency fee retainers. Greater care must be taken to properly document fee arrangements. Contingency fee arrangements should follow guidelines as set out by Act and Regulations. Or fee arrangements should be sufficiently particularized in a retainer or in correspondence to client. Attached to this discussion paper at Tab 1 is entire Solicitors Act, with Section 28.1 being relevant section as it relates to Contingency Fee Agreements. Also attached at Tab 2 is Contingency Fee Regulation in its entirety. All lawyers doing personal injury work for plaintiffs should be familiar with Act, Regs, and related case law, and doubly so as it relates to parties disability.

17 efforts party under a disability would surely be unable to advance a case. A minor plaintiff, like any or plaintiff, is entitled to full but fair compensation. The parens patriae jurisdiction reason to ensure continued care of plaintiff As a matter of policy re is no reason to treat parties under a disability any differently from competent plaintiffs in terms of appropriateness of compensation for counsel, without whose should not expand that entitlement. The parens patriae jurisdiction does not enable Court to create a different compensation regime for minor plaintiffs. The Court must protect minors' best interests, but it must do so within established structure for compensation of personal injury claims. 22 It may be an attractive concept to preserve money that might be needed for future care costs, by restricting quantum of legal fees to be paid to solicitor, but re is not a sound do so when one considers following: Often re can be a problem with insurance policy limits, such that only money available to respond to claim is inadequate because tortfeasor was underinsured. Problems with witnesses, risk adverse plaintiffs, and a myriad of or problems often result in settlement proposals that are less than 100% of plaintiff's damages. Very often, injured plaintiff shares blame for accident, to a greater or lesser degree, such that, as a result in split in liability, re will not be adequate funds to The rationale behind Rule 7 is to ensure that minors and mentally incapable people are not taken advantage of because y are not in a position to look out for ir own interests. Rule 7 was not, however, designed to give persons under a disability a better deal on legal fees than or claimants. Wher a plaintiff is 17 years old or 19 years 22 Tsaoussis v. Baetz, supra, at para. 29

18 of case to plaintiff's lawyer. benefit insurer, which often has no obligation to make any contribution towards legal to ensure that parties have indeed entered into a valid Contingency Fee Agreement. se retainers should be approved. was entered into (and not with hindsight as to what actually happened during life of file), -16- old should not be determinative of legal fees to be paid at successful conclusion The Office of Public Guardian and Trustee itself charges fees for its involvement. See attached approved fee schedules at Tab 3. In motor vehicle matters, a sizable portion of a settlement can be funded by an accident fees (and often requires a discount to achieve a lump sum settlement of past and future entitlement). If solicitors wish to assert a claim for fees based on a contingency fee retainer, careful attention and care should be paid to provisions of Soficitors Act and Contingency Fee Regulation Consideration should be given to an application to a Judge for approval of agreement before agreement is finalized, rar than waiting until conclusion of case to have agreement approved as part of Rule 7.08 approval process. Where a contingency fee is not used, if a retainer arrangement for a minor is consistent with retainers entered into by adults, There ought to be certainty and predictability of compensation for legal fees. Contingency fee arrangements or reasonable retainer agreements provide for predictability. As well, process ought not to be so cumbersome as to discourage representation of persons under a disability or unduly increase cost associated with acting for se claimants. In July 2012, Ontario Court of Appeal clarified that a two-step process must be followed when enforcement of a Contingency Fee Agreement is sought in context of a Rule 7 approval motion. Firstly, fairness of agreement must be assessed as of date that it

19 a judge faced with a contingency fee agreement calls into question fairness If reasonableness of agreement, judge should normally raise issues or which Justice R. Smith creates an excellent template of factors In be considered for any settlement of a claim on behalf of a party to disability in which a contingency fee agreement is asserted. under this instance, purported contingency fee agreement In The parties settled legal action on eve of trial for costs. million in damages. The lawyer sought court approval of $ contingency fee agreement and approval of his fees in of $4.174 million, which was approved and found to be fair amount reasonable in all of circumstances. This decision, in full, and be on reading list of every plaintiff personal injury should even if likelihood of ever achieving a $12 million lawyer, is remote. The underlying principles still offer excellent settlement Justice Spies dealt with all issues involved in court Where of a settlement on behalf of a minor, where amount approval for claims totalled $5.734 million. The solicitors received that solicitor and client fees be paid in amount of requested received from defendants. It was proposed disbursements this be funded by 20% of monies allocated to plaintiffs that OHIP), pursuant to a contingency fee retainer (including The court reduced amount claimed, approving agreement and, secondly, reasonableness of agreement must be assessed as of date of hearing. 23 The court also provided following guidance: with solicitors and seek ir submissions. 24 (c) RECENT JUDICIAL COMMENT ON CONTINGENCY FEES IN THE RULE 7 CONTEXT 1. Cogan v. M.F., 2007 CanLii ONSC equalled 33-1/3% of total amount recovered for damages and guidance. 2. Giusti v. Scarborough Hospital, 2008 CanLii ONSC million for fees and nearly $90, for disbursements, $1.13 and above $700, for partial indemnity fees and over furr fees in amount of $780, plus GST and endorsed using 15% as a factor from recovery as more reasonably 23 Henricks-Hunter (Litigation Guardian of) v Ontario Inc ONCA Henricks-Hunter (Litigation Guardian of) Ontario Inc ONCA 496, para. 24

20 appropriate amount, given that action was reflecting a year or more in advance of trial. The court noted that, settled it was held that premium on an accident benefit Where should be smaller than premium in a tort settlement 4. Aywas v. Kirwan, 2010 ONSC 2278 (CanLii) Justice Hackland felt a 35% contingency fee for a global Where and AB settlement was excessive and approved of list of tort factors outlined in Lau v. Bloomfield (cited above). Justice Wilkins, in a brief endorsement relating to a 14- Where girl who suffered a fracture of femur and a non- year-old facial bone, held that plaintiff's solicitor failed to file displaced material with respect to issues that needed to be adequate on an application to enforce a purported contingency addressed agreement. The matter was referred to Office of fee Lawyer to review and report on all issues, not just Children's fee agreement, but also post settlement itself. contingency 6. Melvin v. Ontario (Correctional Services), 2013 ONSC 5432 (CanLii) Justice Shaw rejected position of PG&T on legal Where (which was to suggest a reduction) and approved fees requested fee, largely because of detailed dockets solicitor's were available and excellent result. that 7. Henricks-Hunter v Ontario Inc., 2013 ONSC 5245 (CanLii) which Justice Darla Wilson was required to determine wher In contingency fee retainer agreement between law firm and litigation guardian (which was Public Guardian and was fair and reasonable in accordance with s.24 of Trustee) -18- early settlements are to be encouraged, y although reduce financial risk to firm. substantially Adlen (Litigation Guardian of) v. State Farm (2009), 79 C.P.C. (6 th) 140 settlement. McAndrew v. Roberts, 2012 ONSC 472

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