Compensation to Lawyer

Compiled by Eric B. Appleby

Compensation to Lawyer, general

In the case of Cawood v. Mirza (1981), 13 Sask.R. 428 (Dist. Ct.), the court referred to the relevant factors in determining a fair and reasonable fee. At para. 7 the court stated: [7] The Canadian Bar Association Code of Professional Conduct, which has been adopted as a bylaw of the Law Society of Saskatchewan, includes the following rule: The lawyer should not (a) stipulate for, charge or accept any fee which is not fully-disclosed, fair and reasonable; By way of commentary upon the rule it is stated: A fair and reasonable fee will depend upon and reflect such factors as (a) the time and effort required and spent; (b) the difficulty and importance of the matter; (c) whether special skill or service has been required and provided; (d) the customary charges of other lawyers of equal standing in the locality in like matters and circumstances; (e) the amount involved or the value of the subject matter; (f) the results obtained; (g) tariffs or scales authorized by local law; (h) such special circumstances as loss of other employment, uncertainty of reward, and urgency. A fee will not be fair and reasonable if it is one which cannot be justified in the light of all pertinent circumstances, including the factors mentioned, or is so disproportionate to the services rendered as to introduce the element of fraud or dishonesty.

Compensation to lawyer, duty to inform client

In the case of Boerrichter v. Robertson (1992), 98 Sask.R. 207 (Q.B.), a solicitor’s accounts were taxed and claims for legal fees and interest were disallowed – The solicitor applied for a review of the taxation officer’s decision – The Saskatchewan Court of Queen’s Bench dismissed the application – The court held solicitors are not bound by estimates, however, when the actual cost exceeds the estimate and no hourly rate for extra work is discussed, the taxation officer must protect the client – The court also held the solicitor failed to provide the client with required information about the rate and date of commencement of the interest charged – See paragraphs 8 to 13.

Compensation to lawyer, duty to keep time records

In the case of Lindsay v. Stewart, MacKeen & Covert (1988), 82 N.S.R.(2d) 203; 207 A.P.R. 203 (C.A.), the Nova Scotia Court of Appeal held that where a lawyer agreed to charge on an hourly and daily basis, he had a duty to maintain detailed time records and was not entitled to charge for more than the time spent – See paragraphs 41 to 46, 51.

Compensation to lawyer, supervisory role of the courts

In the case of Plazavest Financial Corp. et al. v. National Bank of Canada et al. (2000), 133 O.A.C. 100 (C.A.), the Ontario Court of Appeal stated at paras. 14 and 15: [14] “The rendering of legal services and the determination of appropriate compensation for those services is not solely a private matter to be left entirely to the parties. There is a public interest component relating to the performance of legal services and the compensation paid for them. That public interest component requires that the court maintain a supervisory role over disputes relating to the payment of lawyers’ fees. I adopt the comments of Adams, J., in Borden & Elliott v. Barclays Bank of Canada (1993), 15 O.R.(3d) 352, at pp. 357-358 (Gen. Div.), where he said: … The Solicitors Act begins with s. 1 reflecting the legal profession’s monopoly status. This beneficial status or privilege of the profession is coupled with corresponding obligations set out in the Act and which make clear that the rendering of legal services is not simply a matter of contract. This is not to say a contract to pay a specific amount for legal fees cannot prevail. It may. But even that kind of agreement can be the subject of review for fairness: see s. 18 of the Solicitors Act.

[15] The observation of Adams, J., that the rendering and payment of legal accounts is not simply a matter of contract finds support in a long established line of authority which recognizes, apart entirely from the Act, that a superior court has an inherent jurisdiction, as part of its disciplinary authority over lawyers, to direct the assessment of lawyers’ fees: Peel Terminal Warehouses Ltd. v. Wootten, Rinaldo & Rosenfeld (1978), 21 O.R.(2d) 857, at p. 861 (C.A.); Minkarious v. Abraham, Duggan (1995), 44 C.P.C.(3d) 210, at p. 242 (Ont. Gen. Div.).”

Compensation in estate matters

In the case of Proniuk Estate, Re (1984), 59 A.R. 97 (Sur. Ct.), the Alberta Surrogate Court held that in determining the amount of compensation payable to the solicitor of an estate the court considers (1) the size of the estate (2) the care and responsibility required and attendance thereon (3) the time occupied in performing the various tasks (4) the skill and ability demonstrated in the administration and (5) the degree of success which has attended the administration – See paragraph 14.

In the case of Salmon Estate, Re (2004), 370 A.R. 316 (Q.B.), Wilson acted as the lawyer for the estate of a deceased – The estate, valued at $685,552.17, had been largely distributed to the beneficiaries – $128,000 remained to be distributed – Wilson applied for taxation of her accounts which totalled over $140,000 – Wilson asserted that the deceased had agreed to being charged 20% of the estate’s value – There was no independent evidence of the agreement – The Alberta Court of Queen’s Bench stated that s. 11 of the Alberta Evidence Act prohibited Wilson from obtaining judgment on her own evidence where the evidence was not corroborated by other material evidence – Wilson’s agreement with the deceased should have been confirmed in writing – A fee of 20% was excessive on an estate of this size, particularly where it was not complex – Wilson was entitled to the guideline amount ($9,130) for the core legal services as described in the Surrogate Rules and compensation on a quantum meruit basis ($11,449.50) for the non-core legal services – See paragraphs 19 to 28.

Compensation due to a lawyer, measure of, relevant considerations

In the case of Sellner Estate v. Pesto (1982), 17 Man.R.(2d) 101 (C.A.), the Court of Appeal stated at paras. 15 to 17: [15] “There appears to have developed in recent years among certain members of the bar an idea that it is appropriate to charge an hourly rate for services rendered to clients. No doubt clients have a right to bargain for hourly rates if they so desire; I see that in the new tariff there will be a discretion in judges to allow hourly rates in some cases. However, I am of the opinion that hourly rates are not a normal method of charging for legal services in the absence of a special agreement.

[16] Hourly rates favor the slow over the quick; they favor delays and sideroads and interlocutory proceedings. In my opinion, in an ordinary matter, it would be absurd to pay a lawyer by the time he puts in, just as absurd as it would be to pay a preacher by the length of his sermon. Time, of course, is a factor to be taken into account but it is only one factor.

[17] In my opinion, lawyer fees are to be settled in the usual case in accordance with the principles set out in the Queen’s Bench Tariff. The taxing officer: … shall have regard to all of the circumstances, including (but not in any way restricting the generality of the foregoing) the nature, importance, or urgency of the matters involved, the time occupied, the circumstances and interest of the person by whom the costs are payable, the general conduct of the proceedings, and the amount, skill, labour, and responsibility involved, …”

In the case of Nathanson, Schachter & Thompson v. Albion Securities Co. et al. (2004), 204 B.C.A.C. 200; 333 W.A.C. 200 (C.A.), during the course of complex litigation, a law firm issued interim monthly accounts that set fees calculated on hourly rates, albeit without any reference to the basis of calculation – A settlement resulted in the clients receiving $11.7 million gross – The firm’s final account included a $250,000 bonus based on the litigation’s success – The total amount billed was $871,431.88, which included fees of $741,929 – A registrar reviewed the account and allowed it in full – The British Columbia Court of Appeal affirmed the decision – The court rejected the clients’ assertion that their subjective misapprehension that they would be billed on a straight hourly basis was sufficient to found an estoppel unless the firm explicitly disabused them of that misapprehension – The test for a representation sufficient to found an estoppel was an objective standard – The registrar’s conclusion that the monthly accounts and other circumstances did not objectively demonstrate a pattern of billing based exclusively on hourly based charges was a factual inference and was not clearly wrong.

In the case of Sikora v. Krawchuk (1996), 125 Man.R.(2d) 81 (Q.B.), a Master assessed a lawyer’s bill for services rendered in connection with marital matters – The bill totalled $5,395.09, $4,900 of which represented fees – There was no retainer letter confirming an hourly rate or the basis on which the lawyer would be charging – There was insufficient evidence in diary entries and from the file to ascertain the time spent by the lawyer – The Master held that in these circumstances the lawyer was entitled to compensation on a quantum meruit basis and that a fair and reasonable fee for the services rendered was $2,500 ($150 per hour) – A total bill of $2,828.49 was allowed – The Master considered that the matter did not present any particular difficulty and that the lawyer did not provide any special skill or service – The Manitoba Court of Queen’s Bench arbitrarily added an additional two hours to the bill and increased the hourly rate from $150 to $175 per hour – The court noted that if the lawyer spent more time on the file than allowed, it was his own fault for failing to keep accurate time records.

Negligence of lawyers

In the case of lawyer negligence in relation a number of issues (such as the basis of its liability, error of judgment, considerations in determining liability, and others) see the entry about the General Negligence Liability of Lawyers.

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This entry was last updated: February 13, 2017