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LAW FIRM FELL BELOW STANDARDS T he failure of a Vancouver senior law partner and associate to keep on top of a plaintiff 's motor vehicle injury claim that occurred in Hong Kong has resulted in a B.C. Supreme Court ordering them to disgorge fees and settle with the estate of the late plaintiff for approximately $500,000. Justice Paul Pearlman, ruling in Campbell v. Ragona, found lawyers Michael Ragona and Joseph P. Cahan and the firm Alexander Holburn Beaudin & Lang LLP negligent and in breach of fiduciary duty to protect the interests of client William Arthur Bedford Campbell. Campbell was 40 when the action was commenced in May 1994 following a 1992 accident where Campbell's cab was broadsided by a drunk driver. Campbell received injuries that over time would lead to his termination of employment, severe headaches, delusions, and an attempted suicide. Once a noted lecturer and consultant, he would end up living in a trailer, sepa- rated from family, and after developing cancer as his trial moved forward, died a year before the award was handed down. Campbell hired the Vancouver firm to prosecute his case. Ragona was the senior litigator and partner at AHBL at the time and newly called Cahan assisted from 1995 to the case's conclu- sion in 2004. AHBL engaged Ong & Chung, a Hong Kong firm, to conduct the action and in November 1998, the Hong Kong High Court determined the driver was wholly liable. However, as the action had been divided into two trials, damages were not set. In June 2004, the Hong Kong driver applied and was success- ful in having Campbell's action for damages dismissed for want of prosecution. Pearlman, in a 163-page ruling, said he found "that the defendants' failure to effectively manage the conduct of their client's case, and to have the damages assessment tried in 1998, 1999, 2000, 2001, 2002, or 2003 was negligent, constituted a breach of their contract with Mr. Campbell, and caused loss to Mr. Campbell when the Hong Kong defendant successfully applied to strike their client's action for want of prosecution." Pearlman also outlined the frustrations between law firms. The judge maintained that much of the difficulty between the two firms could have been managed with direct communica- tions rather than written correspondence. He cited several areas where he felt the Vancouver firm failed the client's interests. With only a 50-per-cent chance to appeal the decision of the Hong Kong courts to strike the action, Campbell made it known to the Vancouver firm that he had a potential claim for damages for professional negligence against it, Ragona, and Cahan, as well Ong & Chung. Pearlman maintained that Ragona, realizing his firm was in a conflict-of-interest situation, should have insisted that Campbell seek independent legal advice, although he was advised to do so, but deferred. Instead, a $167,530 settlement was reached with the driver and Ong & Chung in December 2004. Campbell v. Ragona can be found at courts.gov.bc.ca/ jdb-txt/SC/10/13/2010BCSC1339cor1.htm. AHBL deducted its fees and disbursements, paying Campbell $63,478.79. Campbell signed a release of claims against Ong & Chung, but not AHBL. Campbell hired lawyer D.C. Creighton to pursue his claim against AHBL. Pearlman maintained because Ragona realized he was in a potential conflict and did not mitigate the situation, "he and AHBL must bear the consequences of their breach of the fidu- ciary duty." "There will be an order that AHBL disgorge and pay to Mr. Campbell's estate the sum of $84,391.86, representing the full amount of the fees charged by AHBL in their account rendered to Mr. Campbell dated December 29, 2004." Pearlman ruled Campbell was entitled to the difference between the settlement and what he would have received had his damage claim gone to court in Hong Kong. He calculated the figure at $465,290 based upon Campbell's death in 2009. The $167,530 settlement would be deducted. On top of the remaining $297,760, he awarded $30,000 for pain and suffering, $20,000 for non-pecuniary losses attributed to the defendant's negligence or breach of fiduciary duty, and $20,000 for mental distress. The judge allowed interest to be calculated on the award, except for the portion that related to earnings. — JS May Jensen Shawa Solomon LLP has changed its name to Jensen Shawa Solomon Duguid Hawkes LLP. Our brand has changed from MJSS to JSS Barristers. All of our individual lawyers' contact information can be found on our new website at www.jssbarristers.ca We remain available to assist with dispute resolution, civil litigation and conflicts. T 403 571 1520 F 403 571 1528 800, 304 - 8 Avenue SW, Calgary, Alberta T2P 1C2 www. C ANADIAN Law ye rmag.com NO VEMBER / DECEMBER 2010 15 SS_CL_Nov_10.indd 1 10/18/10 4:04:56 PM