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w w w . C A N A D I A N L a w y e r m a g . c o m F E B R U A R Y 2 0 1 6 13 \ AT L A N T I C \ C E N T R A L \ W E S T REGIONAL WRAP-UP C ontingency fees can't be stacked but should be shared when two law firms are dealing with the same client, British Columbia Supreme Court district registrar Scott Nielsen ruled recently in Holness Law Group Professional Law Corp. v. Mann, which saw both firms claiming a 30-per- cent share of the client's award. Holness asked for its March 20, 2015 legal bill to be reviewed under the provi- sions set out in the B.C. Legal Profes- sion Act because it wanted to collect the contingency fee of $33,075 before taxes it said was fair and consistent with its contin- gency agreement with client Robyn Deep Mann, an auto accident injury claimant. The fee was opposed by Mann's coun- sel Collette Parsons Harris, which Mann retained after terminating Holness. Mann opposed Holness' contingency fee for three reasons: first, when it was combined with the fee paid to CPH, it exceeded the amount that could legally be charged a cli- ent as set out by the act; secondly, a fee was being paid to CPH, and if there was any kind of payment to both firms, it should be apportioned; and finally, Holness' charge was too much for the services it rendered. The Law Society of B.C. rules state, sub- ject to a review by B.C.'s Supreme Court, allowing an exception, the contingency fee a lawyer may charge on a motor vehicle- related injury or wrongful death cannot exceed 33-1/3 per cent of the award. Mann had the misfortune of being involved in four accidents in 2008, 2010, 2011, and 2012. She came to Holness in 2008 and signed a contingency agree- ment, which stipulated Mann would pay $250 if she decided to pursue action by herself or if she retained another firm, then Holness would be entitled to be paid if a settlement was reached. Holness handled Mann's personal injury actions and the Part 7 action for roughly four years until September 2012, when the client termi- nated the retainer. At the time Holness was discharged, the only Insurance Corp. of B.C. settlement offer it had been able to get for Mann was $20,000. CPH was retained by Mann and CPH paid Holness' disburse- ments, which amounted to $9,219.59, and agreed to protect Holness' fee as agreed, or assessed, when the client's claims concluded. CPH amended the Part 7 notice of civil claim to include all the accidents and alleged bad faith on the part of ICBC. A trial covering the four accidents was sched- uled in April 2015. Although Holness had originally filed the Part 7 claim, it had not been served by the insurance company. In March 2015, ICBC settled for $252,000 plus taxable costs and disburse- ments of $53,000. CPH advised Holness of the settlement and that it charged a 30-per-cent contingency fee on the settle- ment. The legal fee charged to Mann was $75,600, plus 12-per-cent tax. But Mann believed Holness would share the $75,600 on a quantum merit basis. However, Hol- ness takes the position it is entitled to a fee in addition to CPH's charge. Holness submitted a final accounting of its work on the file of $37,044 after taxes. "Holness based their fee upon 30 per cent of what they had calculated their contin- gency ought to have been based upon a 'work and progress' worksheet prepared by them. The amount charged by Holness coincidentally amounts to exactly 43.75 per cent of the amount billed by CPH," Nielsen said in reasons. CPH argued that the contingency fee should be divided between the two firms in keeping with the LSBC rules and within the best interest of the client. Holness argued it was not bound by another firm's contingency agreement. Nielsen reasoned: "The contingency fees of CPH and HLG, as billed, would total $108,675 of the $252,000 settlement amount, or 43.13 per cent of the damages plus applicable taxes." Nielsen reasoned if Holness' position was given effect, it would result in the stacking of contingency fees, and conceiv- ably give rise to a situation where com- bined contingency fees could consume an entire award of damages if enough lawyers were dismissed and others retained. "This would be an absurd result and contrary to s. 66 of the LPA," he reasoned. Nielsen said there would also be a nega- tive impact on the client. "This would ulti- mately exploit clients and dissuade them from dismissing a lawyer who the client may no longer wish to represent them. Despite losing confidence in their coun- sel, a client could be forced to continue to retain that lawyer for fear of escalating fees. He said for the sake of "justice and fair play" a single contingency fee would be shared between the two firms on a quan- tum merit basis taking into consideration the LPA cap on fees at 33-1/3 per cent. He ruled that since both firms had agreed on 30 per cent, that would be the figure used. The client did not dispute the $75,600 plus tax paid in contingency fees. In determining how the award should be shared, Nielsen looked at a number of factors including how much work each firm had put into the case and the yielded results. "The correspondence generated by CPH was approximately 760 pages, consisting of 194 e-mails; 26 letters to the client; 47 letters to the defendants; and 76 letters to medical practitioners, experts, and record holders. Holness produced approximately 262 pages of file correspon- dence, which was handed over to CPH," he said in reasons and also pointed to Holness having the case for four years and yielding only a settlement of $20,000. "Holness received one defence report and obtained one plaintiff 's report. CPH was served with five defence reports and arranged for six plaintiff 's reports. No doubt, the investment in the plaintiff 's experts was partly responsible for the defendants' increasing their offer from $20,000 to $252,000. . . ." Nielsen awarded 80 per cent of the contingency fee to CPH while Holness received 20 per cent. Since it was a dispute between the two law firms, he ruled no interest was payable to either. — JEAN SORENSEN jean_sorensen@telus.net No stacking the contingency fee deck, registrar rules

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