Fontaine et al. v. Duboff Edwards Haight & Schachter; The Attorney General of Canada et al., Defendants (Respondents) [Indexed as: Fontaine v. Duboff Edwards Haight & Schachter]
111 O.R. (3d) 461
2012 ONCA 471
Court of Appeal for Ontario,
Rosenberg, Juriansz and Rouleau JJ.A.
July 4, 2012
Appeals -- Jurisdiction -- Courts approving settlement agreement in class actions concerning Indian residential schools and making orders addressing issues of implementation and administration of settlement agreement -- Implementation orders providing for assessment of fairness and reasonableness of legal fees by adjudicator and for review of adjudicator's rulings by chief adjudicator -- Implementation orders providing that request for direction could be brought to administrative judge -- Administrative judge acting in his capacity as Superior Court judge in issuing directions -- Directions incorporated as final order of judge of Superior Court -- Appeal lying to Court of Appeal under s. 6(1)(b) of Courts of Justice Act -- Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(1)(b).
Civil procedure -- Class proceedings -- Settlement -- Implementation -- Legal fees -- Courts approving settlement agreement in class actions concerning Indian residential schools and making orders addressing issues of implementation and administration of settlement agreement -- Implementation orders limiting legal fees that counsel could charge to claimants and providing for assessment of fairness and reasonableness of legal fees by adjudicator and for review of adjudicator's rulings by chief adjudicator -- Implementation orders providing that request for direction could be brought to administrative judge -- Fee review decision of chief adjudicator not reviewable by way of appeal to Superior Court or application for judicial review to Superior Court -- Decision only reviewable by administrative judge through request for direction where it was alleged that chief adjudicator's decision reflected failure to enforce provisions of settlement order and implementation orders.
Nine provincial and territorial superior courts issued concurrent reasons approving a national settlement agreement ("S.A.") concluding class actions in relation to Indian residential schools, followed by a set of nine identical approval orders incorporating the S.A. and addressing issues of implementation and administration of the settlement ("implementation orders"). The implementation orders limited the legal fees that counsel could charge to claimants who asserted their claims through the Independent Assessment Process ("IAP") to 30 per cent of the compensation award and permitted an independent adjudicator under the IAP ("adjudicator") to assess the fairness and reasonableness of the legal fees. An adjudicator's ruling was subject to review by the chief adjudicator. The implementation orders also provided for the ongoing supervisory role of the courts in relation to the S.A. Issues that arose regarding the administration or implementation of the S.A. could be brought to the attention of a designated administrative judge, selected from among the nine judges who heard the motions for approval of the S.A. DEHS, a Manitoba [page462] law firm, entered into a contingency fee agreement with one of its IAP clients for 30 per cent of any compensation awarded. An adjudicator reduced the proposed fee. DEHS's appeal to the chief adjudicator was dismissed. DEHS and the chief adjudicator submitted a joint request for direction to an administrative judge. The administrative judge ruled there is no right to appeal from, or to obtain judicial review of, decisions of the chief adjudicator in the fee review process. He then issued directions concerning the manner in which certain factors are to be considered by adjudicators when reviewing the fairness and reasonableness of legal fees. DEHS appealed. The chief adjudicator brought a motion to quash the appeal for lack of jurisdiction.
Held, the motion to quash and the appeal should be dismissed.
The request for directions was made to the administrative judge acting in his capacity of a Superior Court judge. In issuing the directions, he was acting in a judicial capacity. The directions finally determined the issue whether legal fee decisions of the chief adjudicator are subject to further appeal or review. They were incorporated as a final order of a judge of the Superior Court of Justice. An appeal lay to the Court of Appeal pursuant to s. 6(1)(b) of the Courts of Justice Act.
A fee decision of the chief adjudicator is not reviewable by way of an appeal or application for judicial review to the Superior Court. The chief adjudicator's decision is only reviewable by an administrative judge through a request for direction, but this review is available only in very limited circumstances. In particular, a request for direction may only be brought where it is alleged that the chief adjudicator's decision reflects a failure to enforce the provisions of the S.A. or the implementation orders. DEHS failed to establish that the chief adjudicator's decision reflected such a failure.
APPEAL from the order of Chief Justice Winkler acting in his capacity as administrative judge for the Indian Residential Schools Settlement Agreement dated March 7, 2011; MOTION to quash an appeal.
Cases referred toBaxter v. Canada (Attorney General) (2006), 2006 ONSC 41673, 83 O.R. (3d) 481, [2006] O.J. No. 4968, 40 C.P.C. (6th) 129, 153 A.C.W.S. (3d) 1044 (S.C.J.) Statutes referred to Constitution Act, 1867, s. 96 Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(1)(b) [as am.] Judicial Review Procedure Act, R.S.O. 1990, c. J.1, s. 2(1)2 Legal Profession Act, C.C.S.M., c. L107, s. 55(5), (7)
Harley Schachter, for appellant Duboff Edwards Haight & Schachter. E.F. Anthony Merchant, Q.C., for intervenor Merchant Law Group LLP. Charles Hofley and Leanne N. Fisher, for respondent chief adjudicator, Independent Assessment Process. Catherine Coughlan and Dalal Mouallem, for intervenor Attorney General of Canada. [page463]
The judgment of the court was delivered by
ROULEAU J.A.: --
Introduction
[1] For more than 100 years, Canada required aboriginal children to attend residential schools. The children were isolated from their families and communities and many were subjected to profoundly disturbing physical, sexual and psychological abuse. The schools were operated primarily by religious organizations under Canada's supervision. The last residential schools were closed in 1996. Canada has since acknowledged its long-standing policy respecting the Indian residential schools as a seriously flawed failure.
[2] Various class action proceedings were brought against the Attorney General of Canada in relation to the Indian residential schools in Canada. On December 15, 2006, nine provincial and territorial superior courts issued concurrent reasons approving a national settlement agreement ("S.A.") concluding the class actions: see Baxter v. Canada (Attorney General) (2006), 2006 ONSC 41673, 83 O.R. (3d) 481, [2006] O.J. No. 4968 (S.C.J.). The reasons of the courts were followed by a set of nine identical approval orders incorporating the S.A. and addressing issues of implementation and administration of the settlement ("implementation orders").
[3] The S.A. provides two mechanisms through which class members can obtain individual compensation: (1) the Common Experience Payment ("CEP"), which is available to all eligible class members who resided at a residential school; and (2) the Independent Assessment Process ("IAP"), which is available to those claimants who establish that they suffered serious physical or sexual abuse, or psychological harm at a residential school.
[4] Most claimants under the IAP retain counsel to represent them. Under the terms of the S.A., Canada agreed to contribute an amount up to 15 per cent of the compensation awarded to the claimant for legal fees. This amount is paid in addition to the full amount of the award paid out to the successful claimant.
[5] When the S.A. was approved, Winkler R.S.J. (as he then was) expressed concern that it did not provide for any review of the fees charged by counsel to their clients under the IAP: see Baxter, at paras. 73-78. All nine approving courts addressed this issue in the formal implementation orders of the S.A.
[6] The implementation orders were not opposed by the parties to the S.A., including the appellant -- a Manitoba law firm. [page464] The implementation orders limit the legal fees that counsel may charge to IAP claimants to 30 per cent of the compensation award. This limit is inclusive of, and not in addition to, Canada's 15 per cent contribution to legal fees. The implementation orders also permit an independent adjudicator under the IAP ("Adjudicator") to assess the fairness and reasonableness of the legal fees. With respect to this type of review, the implementation orders provide, at para. 18:
THIS COURT FURTHER ORDERS that upon a claimant's request which request shall be made at the conclusion of the hearing, or within fourteen (14) days thereof, or on the Adjudicator's own motion, legal counsel's legal fees for conducting the IAP may be reviewed by the Adjudicator for fairness and reasonableness. In the event of such a review legal counsel shall in addition to submitting their retainer agreement provide any other information pertinent to their legal fees. The Adjudicator shall assess the fairness and reasonableness of the legal fees in accordance with the generally accepted principles and authority for the assessment of accounts, including the following:
a. time expended by legal counsel;
b. the legal complexity of the matters;
c. the degree of responsibility assumed by legal counsel;
d. the monetary value of the matters at issue;
e. the importance of the matter to the claimant;
f. the degree of skill and competence demonstrated by the legal counsel;
g. the results achieved and the contribution of legal counsel to the result;
h. the ability of the claimant to pay; and
i. the claimant's expectations as to the amount of the legal fees,
and [the Adjudicator] shall take into account the fact that Canada will contribute an amount equal to 15% of the compensation award towards the legal fees.
[7] The assessment of the legal fees can be initiated at the claimant's request or on the Adjudicator's own motion.
[8] Paragraph 19 of the implementation orders provides that claimants or their legal counsel may request the Chief Adjudicator or his designate to review an Adjudicator's ruling on the fairness and reasonableness of legal fees (for ease of reference, in these reasons "Chief Adjudicator" includes the Chief Adjudicator's designate). Any such request is to be brought within seven days of the Adjudicator's ruling and the Chief Adjudicator is to release written reasons within 14 days.
[9] The implementation orders also provide for the ongoing supervisory role of the courts in relation to the S.A. The orders state, at para. 23, that [page465]
the Courts shall supervise the implementation of the Agreement and this order and, without limiting the generality of the foregoing, may issue such further and ancillary orders, from time to time, as are necessary to implement and enforce the provisions of the Agreement, the judgment dated December 15, 2006 and this order.
[10] Schedule "A" to the implementation orders is a Court Administration Protocol ("CAP"). The CAP sets out a process for addressing issues that may arise regarding the administration or implementation of the S.A. The CAP provides that -- where a matter requires "court orders, directions or consideration" -- the party, counsel or other entity bringing the matter forward should file a "Request for Direction". The request will be brought to the attention of one of two designated Administrative Judges, who are selected from among the nine judges who heard the motions for approval of the S.A.
Overview of the Appeal
[11] This is an appeal from directions issued by Winkler C.J.O. in his capacity as Administrative Judge pursuant to the CAP. The appellant, Duboff Edwards Haight & Schachter ("DEHS"), and the respondent, Chief Adjudicator, jointly brought a Request for Direction to the Administrative Judge following a review of the fairness and reasonableness of the legal fees that the appellant contracted to charge its client in the IAP. In his directions, the Administrative Judge determined, among other matters, that there is no right to appeal from, or to obtain judicial review of, decisions of the Chief Adjudicator in the fee review process. DEHS brought an appeal to this court from the Administrative Judge's directions.
[12] The respondent brought a motion to this court to quash the appeal on the basis that the court does not have jurisdiction to hear an appeal from a judge's order giving directions pursuant to the S.A. The motion to quash was heard together with the appeal.
[13] For the reasons that follow, I would dismiss the motion to quash and would also dismiss the appeal.
Facts
(1) The Adjudicator's legal fee review
[14] The appellant, DEHS, represents claimants under the IAP and is a signatory to the S.A. In July 2006, DEHS entered into a contingency fee agreement with one of its IAP clients for 30 per cent of any compensation awarded. The client's claim was heard in April 2009 and the Adjudicator awarded $103,000. [page466] Legal fees claimed at 30 per cent of the award were $30,900, plus applicable taxes totalling $3,708.
[15] The reported time value of DEHS's fees and disbursements when the claim hearing took place was $15,685.88. The Adjudicator informed the client of his right to initiate a legal fee review at the original claim hearing and in a letter following the hearing. The client did not seek a review.
[16] On May 25, 2009, the Adjudicator undertook a legal fee review hearing on his own motion. The Adjudicator gave notice to the appellant of his intention to review the legal fees, and received both written and oral submissions from the appellant. The Adjudicator received the oral submissions by way of a conference call with counsel in the presence of the claimant.
[17] On June 30, 2009, the Adjudicator issued a ruling adjusting DEHS's proposed fee down to $20,600, plus taxes totalling $2,472. The approved fees reduced the 30 per cent contingency fee to 20 per cent (15 per cent to be paid by Canada, 5 per cent to be paid by the client).
[18] A dispute erupted between Canada and the claimant involving whether GST and PST owing on compensation awarded under the S.A. is a disbursement to be paid by Canada on behalf of the claimant. A separate hearing to deal with those issues was scheduled to take place before the Chief Adjudicator on November 19, 2009. At the end of those proceedings, the reported time value of DEHS's fees and disbursements had increased from $15,685.88 to $27,532.18.
(2) Chief Adjudicator's decision
[19] On July 29, 2009, DEHS appealed the decision of the Adjudicator to the Chief Adjudicator by way of written submissions. DEHS argued a list of 13 grounds for review. Of particular relevance to this appeal, DEHS argued that the Adjudicator erred in these three ways: (1) by basing his decision on the time that had been spent up to the date of the hearing, and on the fact that the hearing was completed in less than one day when the GST and PST disbursement issue was not yet settled and would require significant additional time; (2) by considering what other lawyers might charge for IAP claims for other clients; and (3) by presuming that 15 per cent is the "standard" fee in IAP hearings.
[20] On September 17, 2009, the Chief Adjudicator issued a ruling dismissing DEHS's appeal and upholding the Adjudicator's decision to reduce the legal fees. The Chief Adjudicator held that the Adjudicator's decision provided a transparent reasoning [page467] path, fell within a range of reasonable outcomes and was consistent with similar cases that had been the subject of fee review.
[21] In response to DEHS's three concerns described above, the Chief Adjudicator first noted that the reduced fee would be "subject to a possible further ruling [by the Adjudicator or the Chief Adjudicator] that will be made on completion of the decision regarding the question of whether GST and PST on this case are a legitimate disbursement to be paid by Canada".
[22] On the second point he reasoned that
[a]n adjudicator does not operate in a vacuum. Adjudicators bring with them the experience of handling other cases and learning what other lawyers charge for the same kind of work. To refer again to my fee review [appeal] decision of W-13760 I stated:
Many lawyers across Canada accept Canada's contribution of 15% as full payment for their services. Lawyers in Quebec who handle IAP cases have agreed among themselves to limit their fees to Canada's contribution. It is difficult to accept that some lawyers would expect more than others for similar cases and delivery of the same quality of work. In fact, in many cases the difference cannot be reconciled.
I continue to stand behind these words. The fact that other lawyers working in the IAP process accept payment at Canada's contribution is a well known fact among lawyers and adjudicators working in this process.
[23] Finally, regarding DEHS's third point, the Chief Adjudicator was satisfied that the Adjudicator never presumed that a standard fee should be 15 per cent in an average case. He reiterated that there is no such presumption, only a maximum fee of 30 per cent and a minimum fee of zero. The Chief Adjudicator concluded that, in all respects, the Adjudicator acted in accordance with the terms of the S.A. and there was no basis to interfere with the legal fee review decision.
(3) The administrative judge's directions
[24] On October 16, 2009, DEHS filed a notice of application at the Manitoba Queen's Bench, seeking judicial review and other relief in respect of the decision of the Chief Adjudicator. Before the matter was heard, the Chief Adjudicator's office took the view that a Request for Direction ought to be brought to one of the Administrative Judges to clarify the procedure for appealing or reviewing decisions of the Chief Adjudicator in the IAP legal fee review process.
[25] In March 2010, the Chief Adjudicator's office and DEHS submitted a joint Request for Direction to Winkler C.J.O., in his capacity as Administrative Judge pursuant to the CAP. The Chief Adjudicator requested directions on whether or not its fee [page468] review appeal decisions are reviewable by the courts and, if so, the proper procedure for such a review.
[26] DEHS requested directions on several general points concerning the interpretation of the terms of the IAP legal fee review process as set out in the implementation orders. Of relevance to this appeal, DEHS sought direction on the issue of how contingency fee agreements are to be dealt with in provinces with statutes that govern the legal fee review process. DEHS also sought directions on three case specific issues, two of which pertain to this appeal: (1) whether the fee review in this case was commenced prematurely; and (2) whether the Adjudicator failed to consider the relevant factors in the fee review process.
[27] In response to the joint request for directions, on March 7, 2011, the Administrative Judge issued directions. He summarized the directions sought by the Chief Adjudicator, at para. 8:
The Chief Adjudicator seeks directions regarding the extent to which IAP legal fee reviews conducted by him (or his designate) are subject to any further appeal; if there is a right to further appeal, to whom the appeal lies; and the nature of such appeal.
[28] The Administrative Judge then summarized the directions sought by DEHS, at para. 9:
DEHS also seeks directions on issues specific to the Chief Adjudicator's legal fee review in [this case]. In addition to the IAP file specific issues, DEHS seeks directions concerning the various factors to be considered by the IAP Adjudicators when they are conducting fee reviews.
[29] On the first question raised by the Chief Adjudicator, the Administrative Judge concluded that no appeal lies from a decision of the Chief Adjudicator. The underlying litigation has ended and the relationship among the parties is governed by the court orders approving the settlement. The claims administration and assessment process is a creature of the S.A. In the words of the Administrative Judge, at para. 17: "[T]he only appeal rights from decisions rendered under the claims administration and assessment process in respect of individual claims are those expressly set out in the terms of the order." The implementation orders provide for an appeal from a fee review to the Chief Adjudicator. Once that appeal route is exhausted, there is no further right of appeal.
[30] The Administrative Judge rejected the suggestion that judicial review of the decision of the Chief Adjudicator is available. He explained, at para. 19, that the Chief Adjudicator acts pursuant to the terms of the implementation orders issued by [page469] the court and, therefore, cannot be said to be exercising a statutory power of decision that is subject to judicial review.
[31] The Administrative Judge went on to say, at para. 22:
Further, no right of appeal can be grounded on the supervisory jurisdiction that the courts have over the implementation of the Settlement and the Settlement Orders. In other words, there is no implicit right to appeal each determination made within the context of the claims administration or assessment process as an incident of the judicial oversight function.
[32] The Administrative Judge then responded to DEHS's request for directions concerning the manner in which certain factors are to be considered by Adjudicators when reviewing the fairness and reasonableness of legal fees. He addressed the following five factors: (1) contingency agreements; (2) the IAP claimants' views concerning legal fees; (3) the 30 per cent limit for legal fees under the IAP; (4) Canada's 15 per cent contribution to legal fees; and (5) fees charged by other lawyers.
[33] The Administrative Judge issued the following directions with respect to each factor:
(1) Contingency agreements
The terms of a contingency agreement are only one factor to be considered by the Adjudicator. The weight to be given to the contingency agreement must be assessed in the context of the facts of each case (at para. 28).
(2) Claimant's views
[O]nce the Adjudicator decides that a fee review is appropriate, the claimant's views are one of the factors that the Adjudicator must take into consideration. In particular, the claimant's views go to his or her expectations [ . . . ]. The weight to be given to the views of the claimant must be assessed in the context of the facts of each case (at para. 32).
(3) The 30% limit for legal fees
The maximum fee under the IAP, 30% of a claimant's compensation award, ought to be reserved for the "most-time consuming or difficult of cases" (at para. 37).
(4) Canada's 15% contribution
Canada's 15% contribution to the legal fees of an IAP claimant, is neither a "positive" nor "negative" factor in the fee assessment process. An Adjudicator must have regard to the total amount of legal fees sought in order to conduct the fairness and reasonableness review" (at para. 38)
(5) Fees charged by other lawyers
The range of fees being charged by lawyers across the country in relation to IAP claims is a fact that may go to the claimant's expectations. That said, it is no more than one factor to be considered (at para. 41).
[34] The Administrative Judge confirmed that the factors listed in para. 18 of the implementation orders (set out above, at [page470] para. 6) are to be taken into account in rendering a decision as to the fairness and reasonableness of legal fees, and those factors cannot be ignored by the Adjudicator. He explained, at paras. 37 and 41:
In conducting a review of the fairness and reasonableness of legal fees, IAP Adjudicators must consider the factors set out in paragraph 18 of the Implementation Orders . . . [T]he test is "fairness and reasonableness" in all the circumstances and, as such, it remains necessary for Adjudicators to apply the required factors in arriving at their determination in any particular case. . . . . .
In the same way that the lawyers cannot limit the discretion of the Adjudicators as set out in paragraph 18 [of the Implementation Orders], the Adjudicators cannot ignore its provisions. (Emphasis added)
[35] Finally, with respect to DEHS's request for directions on its specific concerns related to the assessment of its legal fees, the Administrative Judge said, at para. 44:
No appeal lies from the decision of the Chief Adjudicator pursuant to paragraph 19 of the Implementation Orders. Accordingly, the request for a review of the decision is denied.
[36] DEHS appeals from these directions.
Preliminary Issue: The Chief Adjudicator's Motion to Quash
[37] I would dismiss the motion to quash for the following reasons.
[38] The Chief Adjudicator argues that when the Administrative Judge issued directions, he was acting pursuant to the S.A. and not in his capacity as a judge of the Superior Court. Directions given by the Administrative Judge are not court orders in the traditional sense. Rather, they are made pursuant to a self-contained system designed to administer a private agreement reached by the parties.
[39] I disagree. The S.A. was incorporated into a series of court orders. Paragraph 23 of the implementation orders states that "the Courts shall supervise the implementation of the Agreement and this order". The CAP sets out the procedure through which parties to the S.A. can ask the court to exercise its supervisory jurisdiction. It provides, at para. 2, that "[a]ll matters that require court orders, directions or consideration, will be brought to the attention of the Administrative Judges at first instance by the filing of a Request For Direction". The Administrative Judges are chosen from among the [page471] nine judges who heard the motions for approval of the S.A., or their successors.
[40] In my view, the Request for Direction was made to the Administrative Judge acting in his capacity as a Superior Court judge appointed pursuant to s. 96 of the Constitution Act, 1867. Under the terms of the implementation orders and the CAP, the Administrative Judges are representatives of the nine provincial and territorial superior courts that approved the S.A. Thus, in issuing his directions, he was acting in a judicial capacity. The judicial role of the Administrative Judge is confirmed by the fact that his directions were affixed with the seal of the Superior Court, were released on Superior Court forms and refer to the court file number for the claim that was issued by the class members to the S.A.
[41] The Administrative Judge's directions finally determined the issue whether legal fee review decisions of the Chief Adjudicator are subject to any further appeal or review. His directions were incorporated as a final order of a judge of the Superior Court of Justice. An appeal lies to this court pursuant to s. 6(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43.
Issues
[42] The appellant in his factum raised the following issue:
Are decisions of the Chief Adjudicator immune from judicial scrutiny by the Superior Courts of each province?
[43] However, in the course of oral submissions, it became clear that the appellant does not take issue with the Administrative Judge's conclusion that no appeal lies to the Superior Courts of each province from a decision of the Chief Adjudicator. Rather, the appellant's position was that the Chief Adjudicator is subject to the rule of law and the rules of natural justice. In the event that these rules are breached, a judge of the Superior Court in the province, having jurisdiction over the parties and the subject matter, could intervene to correct those errors.
[44] Having regard to counsel's position in oral argument, I would reframe the issues as follows: (1) Are there any circumstances in which a Chief Adjudicator's decision in the fee review process is reviewable by a judge of Superior Court? (2) Did the Administrative Judge err in not granting the specific directions requested by the appellant? [page472]
Discussion
Issue 1: Are there any circumstances in which a Chief Adjudicator's decision in the fee review process is reviewable by a judge of Superior Court?
Positions of the parties
[45] The appellant argues that the Administrative Judge's directions in this case leave the parties to the S.A. in an impossible position. According to the appellant, the Administrative Judge effectively ruled that he has no jurisdiction to correct any errors of law or to redress any denial of natural justice that the Chief Adjudicator may have committed in reviewing an Adjudicator's fee review assessment. Thus, decisions of the Chief Adjudicator are immune from judicial scrutiny, even if he or she fails to comply with the terms of the S.A. and implementation orders and the rules of natural justice. Such decisions would also be immune from judicial scrutiny if the Chief Adjudicator incorrectly concludes that the Adjudicator complied with the terms of the S.A. and the implementation orders and the rules of natural justice. For convenience, reference to a failure to comply with the S.A. and the implementation orders includes a failure to comply with the rules of natural justice.
[46] The intervenor Attorney General of Canada and the intervenor Merchant Law Group agree that, pursuant to the terms of the CAP, recourse to the Administrative Judges from a decision of the Chief Adjudicator should be available in limited circumstances where a legal fee review decision does not comply with the terms of the S.A. or the implementation orders.
[47] The respondent Chief Adjudicator argues that the ongoing supervisory role of the court contemplated by the implementation orders does not allow the Administrative Judge to review or correct fee decisions made pursuant to the implementation orders. The only appeal from a legal fee decision lies to the Chief Adjudicator. In accordance with the IAP legal fee review process, there is no further appeal from that decision. The intention of the parties to the S.A. is clear: the process is meant to be expeditious. The S.A. is final and the process giving effect to the S.A. must be limited to what is set out in the implementation orders.
[48] The Chief Adjudicator also submits that allowing further review of IAP legal fee determinations, whether framed as an appeal, judicial review or a Request for Direction, stands to re-introduce power imbalances that the IAP was intended to [page473] avoid and to frustrate the efficiency and finality that was intended for the IAP and S.A. more generally.
[49] Furthermore, there are sufficient checks and balances built into the IAP legal fee review process to ensure that the Chief Adjudicator respects the terms of the implementation orders. For example, the Chief Adjudicator's appointment is approved by the court and the Chief Adjudicator remains accountable to the court and the parties to the S.A.; the Chief Adjudicator is accountable to an oversight committee comprised of interested parties; and the Chief Adjudicator reports to the courts on a regular basis on all aspects of the implementation and operation of the IAP.
Analysis
[50] The Administrative Judge correctly concluded that no appeal lies from a legal fee review decision of the Chief Adjudicator. I agree with his reasons on this point and the appellant did not press the contrary position in oral argument.
[51] The Administrative Judge also correctly concluded that there is no right to seek judicial review from a legal fee review decision of the Chief Adjudicator. The court's jurisdiction to issue a declaration under s. 2(1)2 of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1 (the "JRPA") relates only to "the exercise, refusal to exercise or proposed or purported exercise of a statutory power". As the Administrative Judge explained, the Chief Adjudicator is not exercising a statutory power of decision, but rather renders his fee review appeal decision pursuant to the authority derived from the implementation orders, as approved by the relevant provincial and territorial superior courts.
[52] The appellant further contends that the office of the Chief Adjudicator is a quasi-judicial public body that is subject to judicial review proceedings by way of an application for an order in the nature of mandamus or certiorari under s. 2(1)2 of the JRPA. I do not agree with this assertion. Judicial review is not available to review the exercise of authority by a judicially created body, which has been given certain duties as provided by the terms of the S.A. and the implementation orders. The office of the Chief Adjudicator was created by order of the courts in approving the negotiated terms of settlement of class action litigation. The authority of that office is exercised in relation to those class members who have elected to advance claims through the IAP and their counsel. The terms of the S.A. and the implementation orders set out the process for reviewing decisions of the IAP Adjudicators. Recourse to the [page474] courts is only available if it is provided for in the S.A. or the implementation orders.
[53] I turn now to whether a process, other than an appeal or judicial review, is available to review a decision by the Chief Adjudicator. The Administrative Judge properly confirmed that the IAP Adjudicators "cannot ignore" the provisions of the implementation orders and that "it remains necessary for Adjudicators to apply the required factors" when conducting a legal fee review at first instance. In the perhaps unlikely event that the final decision of the Chief Adjudicator reflects a failure to consider the terms of the S.A. and implementation orders, including the factors set out in para. 18 of the implementation orders, then, in my view, the parties to the S.A. intended that there be some judicial recourse. Having said that, I emphasize my agreement with the Administrative Judge's comment, at para. 22 of his reasons, that "there is no implicit right to appeal each determination made within the context of the claims administration or assessment process as an incident of the judicial oversight function". As I will go on to explain, the right to seek judicial recourse is limited to very exceptional circumstances.
[54] The parties intended that implementation of the S.A. be expeditious and not mired in delay and procedural disputes. As noted by the Chief Adjudicator, there are already many checks and balances in place to ensure that the process is administered fairly and in accordance with the terms of the S.A. The Chief Adjudicator is granted broad discretion by the terms of the S.A.
[55] The implementation orders speak to the principles that are to be applied by the Adjudicator in carrying out a fee review at first instance. The parties provided for an ongoing right to seek the assistance of the courts to require compliance with the terms of the implementation orders. As noted, the implementation orders provide, at para. 23:
[T]he Courts shall supervise the implementation of the Agreement and this order and, without limiting the generality of the foregoing, may issue such further and ancillary orders, from time to time, as are necessary to implement and enforce the provisions of the Agreement, the judgment dated December 15, 2006 and this order.
[56] The CAP specifies that recourse to the courts may be obtained by way of a Request for Direction that is to be brought to one of the two Administrative Judges, as designated by the courts.
[57] Thus, in the very limited circumstances where the final decision of the Chief Adjudicator reflects a failure to comply [page475] with the terms of the S.A. or the implementation orders, the aggrieved party may apply to the Administrative Judges for directions. These limited circumstances would include where the Chief Adjudicator upholds a decision of the Adjudicator as fair and reasonable even though the Adjudicator failed to consider the factors set out in para. 18 of the implementation orders in arriving at his/her fee review decision in a specific case. By providing for recourse to an Administrative Judge in these limited circumstances, the parties will be able to ensure that the bargain to which they consented is respected.
[58] Before leaving this issue, I note that I agree with the Chief Adjudicator's submission that allowing a party to request directions when it is alleged that the Chief Adjudicator's decision reflects a failure to apply the terms of the implementation orders raises concerns about finality, efficiency and has the potential to overburden the Administrative Judges. However, I am satisfied that these concerns are alleviated by the clear limits on when such a request is available. Moreover, the Administrative Judges who hear such requests are well aware of the concerns that led to the adoption of the implementation orders, namely, the need to protect vulnerable claimants and the need for timely resolution of disputes in light of the advanced age of many claimants: see Baxter, at paras. 74 and 85.
Issue 2: Did the Administrative Judge err in not granting the specific directions requested by the appellant?
[59] The appellant argues that the Chief Adjudicator's decision upholding the Adjudicator's fee review decision was not carried out in accordance with the terms of the implementation orders. According to the appellant, the fee review decision of the Chief Adjudicator is infected by four errors. Three of these errors were committed by the Adjudicator and went uncorrected by the Chief Adjudicator. The fourth error was allegedly committed by the Chief Adjudicator. The alleged errors are as follows: (1) The Adjudicator did not consider or apply Manitoba law which requires that a contingency fee agreement be set aside before an assessment of fees is carried out. (2) The Adjudicator failed to give due or proper weight to the expectations of the client in assessing the fairness and reasonableness of the fee agreement. (3) The Adjudicator carried out the fee assessment before the appellant had completed all of the work required. [page476] (4) The Chief Adjudicator relied on the erroneous assumption that all Quebec lawyers had agreed to limit their contingency fee to 15 per cent. These errors -- whether on their own or taken together -- are said to demonstrate that the Chief Adjudicator acted outside the scope of his authority and in breach of the terms of the implementation orders, warranting directions by the Administrative Judge to correct said errors.
[60] I will now explain why none of these alleged errors demonstrates any basis for finding that the Administrative Judge errred in refusing the appellant's request for specific directions concerning the Chief Adjudicator's decision in this case.
(1) The alleged failure to apply Manitoba law
[61] The appellant argues that it entered into a contingency fee agreement with its client, who is a resident of Manitoba, and that their agreement is governed by s. 55(5) and (7) of Manitoba's Legal Profession Act, C.C.S.M. c. L107 (the "Act"). These sections read as follows:
55(5) The client may, at any time within six months after the remuneration provided for in the contingency contract is paid to or retained by the member, apply to the Court of Queen's Bench for a declaration that the contract is not fair and reasonable to the client. . . . . .
(7) If the judge hearing the application is satisfied that the contingency contract is not fair and reasonable to the client, the judge must (a) declare the contract void; (b) order the costs, fees, charges, and disbursements of the member in respect of the business done to be taxed as if no contingency contract has been made; and (c) if the member has received or retained more than the amount so taxed, order repayment of the excess to the client.
[62] According to the appellant, the Adjudicator ought to have considered these statutory provisions because para. 18 of the implementation orders requires that a fee review be conducted "in accordance with the generally accepted principles and authority for assessment of accounts". The appellant says that the Act requires the court to set aside a contingency fee agreement before the court can order that the fees be taxed as if there was no such contract. In this case, the Adjudicator assessed the reasonableness of the legal fees without first explaining why the [page477] contingency agreement ought to be set aside and he is thus said to have failed to comply with Manitoba law and the terms of the S.A. and implementation orders.
[63] In my view, the appellant's position misconceives the effect of the S.A. and the implementation orders. Indeed, in initiating a review of the fairness and reasonableness of the legal fees charged by the appellant, the Adjudicator was acting in accordance with the terms of the implementation orders, rather than outside of the terms of those orders. Conducting a fee review assessment "in accordance with the generally accepted principles and authority for assessment of accounts" -- as provided by para. 18 of the implementation orders -- does not obligate the Adjudicator to follow the process for assessing contingency fee agreements set out in the Manitoba Act. The terms of the implementation orders create a complete procedural code for assessing the fairness and reasonableness of legal fees. The client or the Adjudicator is not required to also follow procedures under provincial legislation for assessing contingency fee agreements.
[64] None of the parties to the S.A., including the appellant, opposed the terms of the implementation orders, including the criteria to be taken into account by the Adjudicator in the legal fee review process. Paragraph 18 of the implementation orders sets out these criteria. Moreover, in contrast with the Act, para. 18 requires the Adjudicator to consider the fairness and reasonableness of the legal fees, and not the fairness and reasonableness of the contract between the lawyer and client.
[65] The Administrative Judge did not err in refusing the appellant's request for a specific direction that the fee review process must be conducted having regard to the particular laws of the province or territory in which the adjudication took place.
(2) The alleged failure to give sufficient weight to the client's expectations
[66] As I have explained, a Request for Direction may be brought where it is alleged that the Chief Adjudicator's decision reflects a failure to enforce the provisions of the S.A. or the implementation orders. Here, the appellant alleges that the Adjudicator failed to give sufficient weight to the fact that the client agreed to a legal fee of 30 per cent of the amount awarded, as provided for in a contract that was freely entered into between the parties.
[67] If a contingency fee agreement exists, para. 18 of the implementation orders requires that it be provided to the [page478] Adjudicator. However, contrary to the appellant's suggestion, the existence of a fee agreement, freely entered into, is not determinative of the fairness and reasonableness analysis. The weight to be assigned to the fee agreement in determining the expectations of the client, and ultimately the fairness and reasonableness of the fees, is entirely within the discretion of the Adjudicator.
[68] The reasons of the Adjudicator demonstrate that he considered the views of the claimant in arriving at his legal fee review decision. The Adjudicator observed that the claimant signed the fee agreement without any duress or coercion and that the claimant was content with the appellant's fee. However, it was open to the Adjudicator to refuse to treat the claimant's expectations as the critical factor in assessing the fairness and reasonableness of the legal fees.
[69] Thus, the Administrative Judge did not err in refusing to grant the requested direction addressing the weight that should have been assigned to this factor.
(3) The fee assessment was conducted prematurely
[70] The appellant submits that it was a breach of the rules of natural justice and of the terms of the implementation orders for the Adjudicator to proceed with the legal fee review before all of the legal work in this case was completed. The legal fee review was carried out at the conclusion of the IAP hearing. At that time, a dispute remained between the claimant and the federal government over liability for GST and PST owing on compensation awarded under the S.A. The value of the additional time expended by the solicitor in resolving this dispute after the completion of the IAP hearing was claimed to be approximately $12,000.
[71] The appellant contends that by failing to delay the assessment until all of counsel's work was completed, the Adjudicator did not respect the terms of the implementation orders. The Chief Adjudicator did not correct this error on appeal and his decision ought to be set aside.
[72] I would not give effect to this submission. The Chief Adjudicator's designate was aware of the need for additional time to be expended when the fee review appeal was heard. He indicated that the Chief Adjudicator was seized with the dispute regarding the GST and PST and stated that "the Chief Adjudicator may address the matter of fees in this application or if not, the Adjudicator remains seized with this case and can hear more submissions solely on the matter of whether additional fees are justified on the matter of liability for GST and PST". [page479]
[73] The appellant does not appear to have pursued the matter as suggested by the Chief Adjudicator's designate. The appellant has failed to establish that the terms of the S.A. were ignored or that the rules of natural justice were breached. There was no basis for the Administrative Judge to intervene in this respect.
(4) The Chief Adjudicator wrongly assumed that all Quebec lawyers limited their contingency fee to 15 per cent
[74] The appellant submits that the Chief Adjudicator incorrectly referred to Quebec lawyers having agreed amongst themselves to limit their fees to Canada's 15 per cent contribution. The appellant was not given the opportunity to challenge this assertion. This error is said to fail to respect the terms of the implementation orders and to thereby constitute a breach of the rules of natural justice. As such, the Chief Adjudicator's decision should be set aside. Fresh evidence filed by the appellant shows that there is no such agreement among Quebec lawyers.
[75] I agree that the Chief Adjudicator's reference to an alleged agreement among Quebec lawyers is incorrect. I also agree with the appellant's submission that there is no presumption in the S.A. that a 15 per cent contingency fee should apply to most cases. As stated by the Administrative Judge, at para. 41:
The range of fees that are being charged by lawyers across the country in relation to IAP claims is a fact that may go to the claimant's expectations. That said, it is no more than one factor to be considered. The fee must be assessed on its fairness and reasonableness in the context of the facts of the case and the language set out in paragraph 18 [of the implementation orders].
[76] However, despite referencing the supposed agreement among Quebec lawyers, the Chief Adjudicator correctly explained that there is no presumption that the standard fee in an average case is 15 per cent. The Chief Adjudicator confirmed that he understood this by agreeing with the Adjudicator that a 20 per cent fee is appropriate in this case. Viewed in context, the error is not significant enough to warrant intervention beyond the comment made by the Administrative Judge in his general directions concerning the nature of the fee review process under the S.A. and the implementation orders. [page480]
Conclusion
[77] A fee review decision of the Chief Adjudicator in the IAP is not reviewable by way of an appeal to the Superior Court, or by way of an application for judicial review to the Superior Court. The Chief Adjudicator's decision is only reviewable by an Administrative Judge through a Request for Direction under the CAP, but such review is available only in very limited circumstances.
[78] In particular, a Request for Direction may only be brought where it is alleged that the Chief Adjudicator's decision reflects a failure to enforce the provisions of the S.A. and the implementation orders. This very limited availability of a right to seek review of a Chief Adjudicator's decision reflects both the importance of the finality of decisions under the S.A. and the relative expertise of the Chief Adjudicator in the legal fee review process.
[79] In this case, the appellant has not established that the Chief Adjudicator's decision reflects a failure to comply with the S.A. or the implementation orders. Thus, I would dismiss the appeal from the Administrative Judge's refusal to grant the specific directions sought by the appellant.
[80] For these reasons, I would dismiss the appeal. The parties have agreed that there should be no order as to costs.
Motion and appeal dismissed.