FEES Address By D. E. (Tom) Gauley, Q.C. Barrister and Solicitor Saskatoon, Saskatchewan
PROFESSIONAL CONDUCT SEMINAR Fees La"... yers who are members of the Law Society are also officers of the Court and it is therefore necessary to examine the jurisdiction of the Court as well as the authority of the Benchers of the Law Society to determine the extent to which both the Court and the Benchers have power to control lawyer's fees. Turning firstly to The Queen's Bench Act, R.S.S. 1978, Chapter Q-l, the relevant sections would appear to be Section 12 which deals with the jurisdiction of the Court and Section 89 which empowers the Judges of the Court lito make rules" and in particular Section 89(1)(e) which states: "89(1) The judges of the court or a majority of them present at any meeting held for that purpose shall have power to make rules for any or all of the following purposes, that is to say: (e) for providing a table or tariff of fees and allowances for services by barristers, solicitors, and counsel in all causes, actions and matters in the court and for preliminary services by solicitors relating to proceedings subsequently taken in the court, of fees and charges to be allowed to witnesses and jurors, and, subject to section 60, of all fees, charges and allowances proper to be fixed or provided for under this Act and rules of court: 1I Reference should then be made to Order XLVI of the Rules of Court and in particular Rules 542 and 565 which state: "542. Subject to the provisions of The Queen's Bench Act and these rules, the costs of and incidental to all proceedings in the court, including the administration of estates and trusts and compensation or allowance to any executor, administrator, guardian, committee, receiver or trustee, shall be in the discretion of the court; provided however that notwithstanding anything contained in rules 544, 545, 546, 549, 551, and 553, the costs of all parties to any proceedings, including third parties, the amount thereof, the party by whom,
- 2 - or the fund or estate or portion of an estate (if any) out of which they are to be paid, shall be in the discretion of the court or judge thereof, and the court or judge may in any case award a gross sum in lieu of or in addition to any taxed costs, and may allow costs to be taxed to one or more parties on one scale, and to another or other parties on the same or another scale, and the amounts taxed on the excess of one scale over another to be set off one against another, and in case no order is made the costs shall follow the event." 11565. In all cases and matters in which duly enrolled solicitors holding annual subsisting certificates as such are employed, they shall be entitled to charge On the taxation of costs between party and party and shall be allowed such fees as are set out in Schedule I of the Tariff of Costs with such variations as are provided for in rule 549, and between solicitor and client, such solicitors shall be entitled to charge and shall be allowed such higher, further or other fees exclusive of counsel fees as the taxing officer shall in his discretion allow, subject however, to an appeal to the court, and as to counsel fees such further fees as may be allowed on application to the court." The Benchers of the Law Society pursuant to the provisions of The Legal Profession Act are responsible for disciplinary action against its members and Section 54 (1) of that Act states in part: "54(1) The discipline committee shall, on a written order of the benchers, or may, either of its own motion or on the application of any person, inquire into and determine any matter of complaint against a member of the society where it is in substance alleged, or the committee has reasonable grounds for believing, that the member has been guilty of: (a) professional misconduct or conduct unbecoming a barrister and solicitor or gross negligence in conducting or handling for a client any matter whether in litigation or not; or (b) default in payment of moneys received by him in his capacity as a barrister and solicitor; or (c) a breach of any provision of this Act or of any rule or bylaw made or passed hereunder."
- 3 - It will be noted that under Section 54(1) (c) supra, a breach of the Act or any rule or by-law may subject a person to discipline and consequently one tutns to the Code of Ethics and for the purposes of this discussion to the rule which deals with fees. The Benchers of the Law Society of Saskatchewan adopted the Code of Professional Conduct promulgated by The Canadian Bar Association effective the 1st day of January, A.D. 1978. The Rule dealing with fees is found in Chapter X and states as follows: "The lawyer sl)ould not (a) (b) stipulate for, charge or accept any fee which is not fully-disclosed, fair and reasonable; appropriate any funds of his client held in trust or otherwise under his control for or on account of his fees without the express authority of his client, except as permitted by the Rules of his Governing Body." The commentary under the Rule sets out a useful summary of the factors that have been considered to ascertain what is "fair and reasonable" as well as providing case references. Reference should also be made to Section 80 of The Legal Profession Act and in particular to subsection (1) which states in part: "No barrister and solicitor. or maintain an action for recovery disbursements until the expiration shall commence of fees, charges or of one month.... It should be noted that this section is not limited to court actions that have been commenced but relates to any account for legal services rendered by a barrister and solicitor. Subsection (6) of Section 80 sets out the extent to which the account should be itemized in the first instance and subsequent sections prescribe the procedure to be follow'ed on a taxation.
- 4 - Orkin on Legal Ethics contains an interesting historical review of fees commencing at page 143. He points out the difference that exists in England as between a barrister and a solicitor in that a barrister cannot maintain a suit for his fees whereas a solicitor is able to do so, No such distinction exists in this province. See also Halsbury's Laws of England, 4th Ed. paras. 1190 to 1201. I should also like to refer to Orkin on The Law of Costs particularly Chapter 1 headed "Classification of Costs" and Chapter 4 headed IISo1icitor and Client Costs", I propose to deal primarily with solicitor and client costs and more particularly with solicitor and his client costs. Initially I wish to refer to those instances where there is no agreement between the lawyer and his client be it related to a contingency fee or otherwise. As to the inherent jurisdiction of the Court to deal with lawyer's charges, Orkin states at page 75: "The court has jurisdiction at common law, quite apart from any statutory authority, to compel a solicitor to deliver a signed bill to his client and account for moneys received in his professional character, since solicitors are officers of the court and subject to its jurisdiction. It follows that the court has the right to direct the taxation of a solicitor and client bill of costs under its inherent jurisdiction; and where the employment of a solicitor is so connected with his professional character as to afford a presumption that it forms the ground of his employment by the client, the court may exercise this jurisdiction to compel him to execute faithfully the trust reposed in him.1i Our Court of Appeal dealt with the general jurisdiction of the Court and the rule to be followed if there was no tariff to be applied In re Royal Bank v. Mars et al (1931), 1 W.W.R. 138, Martin J.A. at page 144 stated: "Where there is no tariff of costs which can be applied to regulate charges for business done by a solicitor, and where there is no specific contract
- 5 - betwee~ the solicitor and his client, the general custom and practice of solicitors is to be the guide, if such custom or practice exists; if there is no custom, the value of the services rendered is to be estimated on a quantum meruit: Widdifield on Costs, 2nd ed., pp. 197 et seq; In re Richardson (1870) 3 Ch. Ch. 144, at 149. 11 See also Re Malone, Q.C. (1961) 34 W.W.R. 699 at 704 and Braun et a1 v. Thiessen (1972), 5 I.I.R. 114, at page 119 wherein Disbery J. quoted from Middleton J. in Re Solicitors (1911), 18 O.W.R. 366 at page 597:!lIThe amount of fee charged can only be based upon the nature of the case and the skill and ability brought to bear upon it. When a solicitor is employed to adjust a matter of difficulty, nothing more injurious to the client could be suggested than that the solicitor's remuneration must depend upon the length of time taken and the number of interviews had. One may grasp a situation with great rapidity, and his skill and experience may lead to its satisfactory solution in a way that after the event appears easy. Another, lacking the necessary skill and experience, may plod away at great length and in the end fail to reach as satisfactory a result, but an itemised bill would give him greater remuneration.'" "Other factors, inter al ia, which have been taken into consideration in fixing a solicitor-client fee are the complexity of the matter, the amount involved or recovered, the skill displayed and the ability of the client to pay: see the Saskatchewan cases of Hogarth v. The Kin~, (1934) 2 W.W.R. 340; Yule v. Saskatoon (No.4) (1 55), 16 W.W.R. 503, 1 D.L.R. (2d) at 540, affirmed 17 I.W.R. 296, 1 D.L.R. (2d) 540 (C.A.); and Bremner v. Brooks, Johnson J., action 281, (1966) 540 (not yet reported). The Court should fix the fee at such a sum as may be fair and reasonable having regard to all the circumstances of the case or, as Thomson J. said in the Yule case (p. 313): "In fixing the remuneration.. ~l factors essential to justice and fair play must be taken into account.'" Let us now look at those instances where there is an agreement between the lawyer and his client be it a contract for a contingent fee or otherwise. Item No. 8 in the commentary to the chapter dealing with fees in the Code of Professional Conduct states:
- 6 - "8. Except as prohibited by the laws of the jurisdiction in which the lawyer practices, it is not improper for him to enter into an arrangement with his client for a contingent fee provided such fee will be fair and reasonable." This matter was dealt with by our Court of Appeal in Speers v. Hagemeister et al (1975) 52 D.L.R. (3d) 109 at page 112, Hall J. stated: "A solicitor and client may make an agreement as to fees and contract themselves out of the Legal Profession Act, R.S.S. 1965, c. 301, and the tariff established thereunder: see Allan v. Dangerfield (1911), 18 lv.l.r. 184; MacMillen v. Taylor, (1932) 3 lv.lv.r. 264. In that event, however, the Court will examine the agreement to determine whether it is fair and reasonable. A fair and reasonable agreement will not be interfered with. One which is not will be rectified: Re Solicitor (1911), 19 lv.l.r. 249; Gala v. Philion (1919), 13 S.L.R. 427, (1920) 3 lv.w.r. 348; Re Malone, Q.C. (1961), 34 lv.lv.r. 699." See also: Gala v. Philion (1920) 3 lv.lv.r. 348; Re Malone, Q.C. (1961) 34 lv.lv.r. 699; Hleck et al v. Man. (1977) 2 lv.lv.r. 557; The Contingent Fee in Canada 6 Alta. Law Review 184, Walter B. Williston, Q.C.; Contingent Fees: A Supplement to Legal Aid 41 Modern Law Review 286, Robin C.A. W ite; Court Awarded Attorneys' Fees: What is "Reasonable"? 1977 Univ. of Penn. Law Review 231, Samuel R. Berger. The courts will always review and examine rather carefully any contract for fees between a lawyer and his client. Not only will the court examine all of the circumstances to see if the fees are "fair and reasonable" but will also consider whether or not the contract is champertous. See Monteith v. Call.dine (1964), 49 lv.lv.r. 641 (B.C.C.A.). lvhittaker, J.A. at pages 651 to 655 reviews the agreement in light of the law of champerty and states at page 653:
- 7 - tilt should not be assumed, from anything I have said, that there can never be a champertous arrangement between solicitor and client. If a solicitor, hearing that Smith has been in a motor cat accident, seeks Smith out, the latter not having up to that time contemplated any action, and bargains for a retainer including a percentage of any sum recovered, that would be champerty, and the agreement CQuid not be enforced; that is, assuming champerty to be contrary to public policy in this province. Such an arrangement would incltide the necessary elements of maintenance. II Davey, J.A. commencing at page 643 considered whether or not the client must receive independent legal advice and came to the conclusion that independent advice is not necessary to support such an agreement. He did go on to say however at page 644: "That is not to say that the absence of independent advice may not in some circumstances be fatal to an agreement under sec. 108." To conclude, a lawyer as a member of a profession and as an officer of the Court must be aware that his charges come under the scrutiny of the Court and are governed by the code of conduct prescribed by The Law Society. In the first instance he may find that his charges will be reduced because they are not Hfair and reasonable ll and in the latter instance he may find himself the subject of disciplinary proceedings. If it is found that in setting his fees he has acted contrary to the Code of Professional Conduct prescribed by the Society he may be punished for his misconduct. D. E. (Torn) Gauley, Q.C.