Can a Lawyer Challenge The Terms of Their Own Retainer Settlement?
In Bimman v. Igor Ellyn Skilled Corporation (Ellyn Regulation), the Court docket of Charm for Ontario thought of the situation in which a courtroom may possibly set apart a retainer agreement involving a law firm and their consumer on the basis that it is not honest and acceptable to the lawyer less than s. 24 of the Solicitors Act, R.S.O. 1990, c. S.15.
In this circumstance, a law firm, “Ellyn Legislation,” argued that in the unique circumstances of their scenario, the terms bundled in the retainer settlement with their former customers have been unfair and unreasonable. The motion choose found that the arrangement was legitimate, owning uncovered that the agreement was the two truthful and acceptable. On appeal, the Courtroom of Charm for Ontario upheld the acquiring that the agreement is enforceable on the facts of the case – but the courtroom went on to reply the broader query: does a attorney have the right to bring a motion to invalidate a retainer settlement less than s. 24 of the Solicitors Act?
Background and Context of the Solicitors Act
Segment 24 of the Solicitors Act gives the courtroom the power to declare a retainer settlement void if the terms of the agreement are considered by the court not to be fair and acceptable.
The background of the legislation tends to make it distinct that these provisions have been designed to shield customers.
The Courtroom of Appeal noticed that what is now ss. 23 and 24 of the Solicitors Act can be traced again to the English Attorneys’ and Solicitors’ Act of 1870, which preserved the courts’ jurisdiction to assessment retainer agreements for fairness and reasonableness. Subsequent situation regulation in Ontario plainly articulates the function of s.24 of the Solicitors Act as a system to shield customers from unfair and unreasonable retainer agreements, which are commonly drafted by legal professionals who are them selves celebration to the arrangement.
When a charge arrangement is challenged less than s. 24 by the consumer, the attorney bears the onus of enjoyable the court docket that the way in which the agreement was acquired was reasonable and that the conditions of the arrangement are acceptable.
The seminal scenario of Raphael Associates v. Lam (2002) CanLII 45078 (ONCA) outlined the aspects to be regarded as by the court docket in pinpointing no matter whether the conditions of a retainer settlement are truthful and reasonable. These elements involve: (1) the time expended by the lawyer (2) the authorized complexity of the make any difference (3) the effects accomplished and (4) the threat assumed by the law firm (the “Raphael framework”).
So, can a attorney use s.24 of the Solicitors Act to problem a retainer settlement?
Sure (while it may perhaps be rare and unquestionably unusual).
The Court docket of Charm held that practically nothing in segment 24 precludes a law firm from bringing a movement to invalidate a retainer settlement on the basis that the retainer arrangement is unfair and/or unreasonable.
Section 23 explicitly enables for an application by “a celebration to the arrangement,” which includes the law firm.
Having said that, in the rare circumstance of a attorney hard their have retainer settlement, s. 24 would have to be interpreted and used in light of its reason of defending customers.
The Courtroom of Attractiveness held that in such a circumstance, the Raphael framework would require to be modified. First, it must be presumed that retainer agreements are built rather and that their phrases are affordable.
2nd, the law firm looking for to problem the validity of a retainer agreement will bear the stress of demonstrating some extraordinary circumstance to rebut this presumption.
The court did not tackle the mother nature and style of fantastic situation which could justify invalidating a retainer agreement on a lawyer’s movement less than s. 24, leaving this issue for a different day in a proceeding where by it is squarely lifted and argued.
We can anticipate that with time, the jurisprudence will expose how, why, and below what situations (as exceptional as they may perhaps be) the courtroom may perhaps set apart a retainer agreement on the basis that the conditions are not honest to the law firm – we will remain tuned!