Court File and Parties

Court File No.: CV-1639-18 Date: 2019-06-10 Superior Court of Justice – Ontario

Re: Adam Krukowski, a person under disability by his Litigation Guardian, Ewa Krukowski And: Aviva Insurance Company of Canada

Before: The Honourable Mr. Justice C.S. Glithero

Counsel: Robert K. Deutschmann, Counsel for the Applicant

Ruling on Application

[1] This is an application under Rule 7.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for the court’s approval of a proposed settlement of an accident benefits claim in respect of Adam Krukowski, a person under disability. In issue are the adequacy of the quantum and terms of the proposed settlement, whether the proposed plan for management of the settlement funds is appropriate, and whether the proposed legal fees ought to be approved as claimed on a contingency fee basis. A thorough and helpful response was received from the Office of the Public Guardian and Trustee to which I will make further reference.

Chronology

[2] Adam Krukowski is 25 years of age and resides with his sister’s family and mother in Kitchener, Ontario. He was operating a snowmobile on January 20, 2014. He ran into a ditch and hit a culvert, which caused him to be thrown from the vehicle. As a result of the accident Adam sustained various injuries including a severe brain injury, right femur fracture, a fractured sternum.

[3] The snowmobile was not insured and counsel’s investigation satisfied him that his client would be shown to have known or that he ought reasonably to have known that he was operating the snowmobile while not insured.

[4] As a result of a corresponding exclusion under the Statutory Accidents Benefits Schedule, Adam was not eligible for income replacement benefits or housekeeping and home maintenance benefits. Rather his accident benefits were limited to medical/rehabilitation and attendant care benefits.

[5] On April 16, 2014, Adam’s mother completed an application for accident benefits in his name.

[6] A disability certificate was signed on May 6, 2014 with the health practitioner signifying to Aviva that the physical and cognitive deficits would preclude Adam from returning to work.

[7] An in-patient evaluation done by a neuropsychologist dictated on June 3, 2014 diagnosed Adam as having “rather severe neurocognitive impairments relative to his severe traumatic brain injury, and further opined that Adam was unable to return to work and would require supervision once he returned home”.

[8] On October 10, 2014, Adam and his sister, Ewa Krukowski met with Mr. Deutschmann for the first time. They entered into a contingency fee retainer agreement which called for a fee in the amount of 15% of any full or partial settlement reached with the accident benefits insurer, including costs and interest, disbursements and HST. If no settlement was reached, no fees would be charged. The agreement provided that if the retainer was terminated the fee would be $350 per hour for a partner, $200 per hour for an associate, and $100 per hour for a clerk.

[9] An application for determination of catastrophic impairment was completed on November 17, 2014. It determined Adam to have suffered a catastrophic impairment as a result of his severe neurocognitive impairment. This report was provided by Aviva to Mr. Deutschmann on January 13, 2015.

[10] An occupational therapy initial assessment and attendant care needs report dated November 24, 2014 detailed Adam’s ongoing difficulties and concluded that it was his severe brain injury and related cognitive symptoms that necessitated ongoing attendant care. This assessment was conducted at the request of Aviva.

[11] An assessment report as to speech and language pathology dated December 17, 2014 confirmed various difficulties in that field. That report was commissioned by Aviva.

[12] A neurological assessment conducted in July of 2015 resulted in a neuropsychological assessment report dated September 9, 2015 which detailed ongoing cognitive and behavioural difficulties. This report was commissioned by Aviva.

[13] On February 1, 2017 Adam’s case manager from the rehabilitation facility contacted counsel indicating concerns about Adam’s capacity to manage his own financial affairs so counsel’s office arranged for Adam to undergo a capacity assessment made pursuant to the Substitute Decisions Act, 1992, S.O. 1992, c. 30. The assessment report indicates that it was the rehabilitation consultant case manager who requested the report. It concluded that Adam was incapable of managing his finances and his property. The report is dated November 16, 2017.

[14] By letter dated December 11, 2017 the Office of the Public Guardian and Trustee (PG&T) advised counsel that it was the statutory guardian of Adam’s property, pursuant to the Substitute Decisions Act, 1992, S.O. 1992, c. 30, and that it would be reviewing the matter and then decide whether or not to continue counsel’s retainer, and requested a copy of counsel’s prior retainer.

[15] By way of a contingency fee agreement dated March 15, 2018, the PG&T, acting as litigation guardian, retained counsel to continue the matter. The agreement provided that counsel was entitled to a contingency fee of 15 % on the amount recovered, exclusive of costs, taxes and disbursements, but plus HST. It further provided that the Incapable Client was entitled to any costs. It further provided that if the retainer was terminated fees owing would be calculated on the basis of $192 per hour for Mr. Deutschmann and $60 per hour for clerks. This agreement was not limited to amounts recovered by settlement only, as was the original one (or a subsequent one as described in para. 17).

[16] On December 20, 2017 Novus Rehabilitation Limited provided a case management update for Aviva and detailed Adam’s ongoing difficulties. The report details that it was counsel who requested the capacity assessment originally and that funding for ongoing involvement by this Novus Rehabilitation Limited was being provided by Aviva.

[17] By letter dated August 2, 2018 the PG&T advised that a new guardian had been appointed and that its involvement was terminated with Adam’s sister being his guardian of property from that point on. That same day a new contingency fee agreement was entered into between Ewa, Adam’s sister on his behalf, and counsel. This was the third contingency agreement and contained the same terms as did the original one signed in October of 2014.

[18] By letter dated November 26, 2018, the case manager from Novus proposed a monthly budget she thought to be reasonable for Adam in the amount of $1,826.65. Adam receives ODSP in the amount of $1,151 per month and will do so, regardless of settlement, until he reaches 57 years of age and thereafter the monthly payment would be reduced proportionate to other income received and terminates at age 65.

[19] Counsel obtained a report from Henderson Structured Settlement dated December 21, 2018. It opined that Adam had an adjusted life expectancy of between 48 – 53 years. The report noted a limit for medical/rehabilitative benefits in a catastrophic injury case as being $1,000,000, but indicated there had been past payments made in the amount of $377,241.31, leaving remaining coverage available in the amount of $622,758.69. The report indicated it would cost $454,573.20 to purchase a structured annuity to provide a $2,000 monthly benefit indexed at 2% per annum and that at Adam’s rate of usage, the coverage would be exhausted in 21 years and 2 months.

[20] The same report indicated a lifetime limit in this catastrophic injury case for attendant care benefits to be $1,000,000, which had to be reduced by past payments totalling $111,178.60, leaving a remainder available of $888,821.40. Henderson determined that a structured annuity to pay $3,000 a month would cost $631,953.32 which would last for 24 years and 9 months, or that a structured annuity to pay $6,000 a month would cost $778,775,59, which would last for a term of 12 years and 5 months.

The Proposed Settlement

[21] The proposed settlement for which approval is sought in this application provides for payment of $1,200,000 in total by Aviva. It provides that from this amount Mr. Deutschmann would receive a total of $ 205, 691.91. The remainder, $994,308.09 would be used to purchase a structure which would produce non-indexed monthly income of $ 3,085.53 for life, with a guarantee to a secondary payee or beneficiary for 35 years. Adam would also continue to receive ODSP in the amount of $1151.00 which results in a combined monthly income of $ 4,236.53.

[22] The fee amount of $ 205,691.91 is calculated on the basis of 15% of $ 1,200,000 being $180,000 plus HST in the amount of $23,400 plus disbursements including applicable HST in the amount of $2,291.91.

[23] The proposed settlement is silent as to the issue of costs as an element of the settlement amount.

[24] By letter dated January 29, 2019, I wrote the office of the PG&T, advising they had had previous involvement in this file, that I was considering an application for approval of the settlement of a person under a disability pursuant to Rule 7.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and asked for their input with respect to the reasonableness of the settlement and the reasonableness of the fees claimed by counsel, pointing out that as worded the contingency fee agreement entitled counsel to a fee only if the matter was settled, and included costs, whereas the previous contingency fee agreement between counsel and the PG&T had provided that costs would not form part of the sum upon which the contingency fee would be based.

[25] By letter dated May 9, 2019 I received the response from the office of the PG&T. It pointed out that its opinion was only one factor among many for the court to consider.

[26] It recites that the proposed settlement is based on $500,000 for medical benefits and $700,000 for attendant care benefits, and that the proposed settlement in that amount represents approximately 79% of the remaining available coverage limits (after deducting past payments).

[27] After analyzing the settlement and offering some suggested additional terms the office of the PG&T advised that in its opinion the settlement is a favourable one for Adam as it generates an income which is expected to exceed his monthly expenses.

[28] The office of the PG&T also opined that while the contingency fee agreement entered into originally, as well in the final agreement, contemplated compensation to counsel only if a settlement was reached, that in its opinion the potential partiality on the part of counsel towards a settlement was not exhibited in this case.

[29] Further, the office of the Public Guardian and Trustee recommended that 10% of the settlement amount, plus tax, should be notionally backed out of the settlement figure as representing an appropriate amount for costs. To do so would result in the amount of $135,600, inclusive of HST being notionally deducted for costs. Fifteen percent of the remainder of the settlement would result in fees to counsel in the amount of $180,415.80 ($159,660, plus HST), which that office thought to be reasonable based on the work completed and the results achieved.

[30] Subsequently I received a supplementary affidavit sworn May 10, 2019 from Mr. Deutschmann accepting the recommendations of the PB&T and proposing that he receive the $180, 415.80 for total fees, and that the additional amount created by the reduction of fees, $25,276.11 also be placed in the proposed structure.

[31] Coincidentally a supplementary affidavit from Adam’s sister and litigation guardian was received supporting the same result.

[32] I advised Mr. Deutschmann that I accepted the $ 1,200,000 settlement amount as being reasonable as had been recommended by the PG&T, but that I had concerns as to the reasonableness of the fees sought, either originally or as a result of the PG&T recommendations. I requested that he advise the trial coordinator as to whether or not he wished an opportunity to attend and make submissions prior to a final decision by me.

[33] Submissions were made in court on June 6, 2019. I will refer to them later.

[34] The application materials demonstrate that the total time docketed for everyone who worked on this file totalled $ 18, 743.99 in fees and $ 2,291.91 in disbursements. These fees are calculated on the basis of $350 per hour for Mr. Deutschmann for hours spent while operating under the first and third retainer agreements, and $192 per hour while he worked under the second contingency fee agreement. The clerk’s time was docketed at $ 100 per hour under the first and third contingency fee agreements and $60 per hour under the second agreement.

[35] The client ledger card contained as an exhibit in the application material indicates that the time spent by everyone in the office on the file was 115.6 hours, of which 24.7 hours were spent by Mr. Deutschmann.

[36] The amount to be recovered by Adam under the original proposal was $994,308.09 ($1,200,000 less $205,691.91). The maximum benefits available to Adam (after deducting amounts already spent) is $1,511,580.09. Under the original proposal Adam would recover 65% of the maximum amounts available to him.

[37] Under the new proposal, resulting from the recommendations of the PG&T the amount to be recovered by Adam would be $1,019,585.10 which is 67% of the total benefits available.

Legal Principles

[38] Hibo Mohamed Abdulahi et al v. Dr. Claudia Kessler et al, 2018 ONSC 3952 involved an action on behalf of a disabled young lady on whose behalf an action was brought claiming damages as a result of complications arising from HIV. Damages were settled in the amount of $3.8 million dollars. Both liability and the quantum of damages were pretty much in dispute. Plaintiffs’ counsel produced a bill of costs, based on normal hourly rates in the range of $350,000, inclusive of HST, plus disbursements. The family was strenuously challenging the amount being sought for fees under the contingency fee agreement (CFA). Counsel accepted a 25% contingency fee as a compromise, instead of the 30% initially agreed upon. That 25% amounted to $920,000 plus HST, but at para. 50 Justice Arrell confirms that a contingency fee agreement is not binding on a party under a disability until it is approved by the court. At para. 51 he held “the onus is on counsel for the family to establish that the contingency fee agreement was: (a) fair at the time it was made; (b) the fees now being charged are reasonable under the circumstances as the court determines at the date of the settlement. See: Raphael v. Lamb, 2002 ONCA 45078, [2002] O.J. No. 3605 at para. 37 (C.A.).”

[39] At para. 52 he concludes the contingency fee agreement was fair at the time it was made as it complied with the Solicitors Act, R.S.O. 1990, c. S.15 requirements and the terms were within the legal industry norms at the time. The parents signed the agreement. They previously worked under a contingency fee agreement, and they produced no evidence to indicate any lack of understanding regarding the contingency fee agreement or any unfairness when it was signed. See: Hendricks-Hunter v. 814888 Ontario Inc., 2012 ONCA 496, [2012] O.J. No. 3207 (C.A.) at para. 20.

[40] At page 53 he noted the Court of Appeal in Raphael v. Lamb, supra, indicated that the reasonableness of the fee is based on the time expended, the legal complexity of the matter, the results achieved and the risk assumed by the lawyer. He concluded the issues in that case to be complex, both as to liability and damages, and had serious international law issues and that the lawyer assumed a significant risk in expending his own time and incurring large disbursements. He also concluded the results were good. But held that “reasonableness dictates that a lesser percentage fee must apply when an award is this high. The proposed fee is significantly disproportionate to the time expended even when all the other positive factors are considered.” He determines the fair and reasonable fee to be 21.5% noting that it is more than double the time expended on the file.

[41] Hendricks-Hunter v. 814888 Ontario Inc., [2012] ONCA 496 is a more recent case again upholding the test as established in Raphael (supra). The Court of Appeal held that the motion judge had erred in failed to consider whether to enforce the CFA after applying the Raphael analysis. The court held that the motion judge had erred in failing to consider whether the CFA should be enforced and by proceeding directly to the determination of the amount of fees without regard to the CFA. At para. 14 they held that because of the importance of the role played by contingency fee agreements, the time spent by the lawyer is a relevant factor but does not control the question of whether the lawyer is entitled to the fees provided through the contingency fee agreement. At para. 17 the court held that on a hearing of a Rule 7.08 motion or application, the judge cannot simply disregard a finalized contingency fee agreement. Rather, the motion judge must assess both the fairness and reasonableness of the agreement. If the agreement is fair and reasonable, the motion judge may give effect to it.

[42] At para. 20 the court noted that Raphael provides at para. 37 that “The solicitor bears the onus of satisfying the court that the way in which the agreement was obtained was fair.” and that the fairness requirement “is concerned with the circumstances surrounding the making of the agreement and whether the client fully understands and appreciates the nature of the agreement that he or she executed.”

[43] The court dealt with the reasonableness factor at para. 22 relying on the test for reasonableness as set out in Raphael at para. 50 indicating the factors to be considered are:

(a) the time expended by the solicitor; (b) the legal complexity of the matter at issue; (c) the results achieved; and (d) the risk assumed by the solicitor.

[44] Batalla v. St. Michael’s Hospital, 2016 ONSC 1513 was a case where counsel sought approval of a fee in the amount of $1,537,223, inclusive of taxes, but not including disbursements. The docketed time, inclusive of taxes was $101,837. At para. 44, Justice Wilson held “the mere fact that the plaintiffs signed a CFA does not equate with an entitlement to charge a fee according to the terms of such an agreement. As was pointed out in the report of the OCL, “a fee agreement is not binding on a party under a disability and until it receives the approval of this Honourable Court.” Justice Wilson found she had no information as to what discussions took place surrounding the signing of the CFA and hence it did not comply with the requirements of the Solicitors Act, R.S.O. 1990, c. S.15.

[45] During his appearance before me Mr. Deutschmann referred to several cases which approach the issue on the basis of considering the fees generated by docketed time and then determining whether a “premium” should be added to that, based on many of the same factors to which I have referred. For instance in Giusti v. Scarborough Hospital, court file 04-CV-266485, in her 2008 decision Spies J held at para. 71 she preferred to approach it not from the perspective of deciding whether to approve the CFA or not, but rather to determine whether a premium should be awarded over and above the hourly rate fees.

[46] Justice Spies applied the same approach in Adler v State Farm, court file number 07-CV-346386. At para. 33 of the 2009 decision she held “I conclude that when approving fees for an AB settlement, with a party under a disability, at least in these circumstances, a substantial premium is not appropriate.” The circumstances there included the fact that the settlement, while reasonable, was not going to provide for all the plaintiff’s needs.

[47] I don’t see any substantive difference between the 2 approaches, as in either the aim is to determine reasonableness by taking into account the same factors. It matters not whether that exercise is to determine whether a premium over docketed time is reasonable, or to determine whether the amount claimed under the CFA, or something less, is reasonable.

Discussion

[48] The fact that fees here are claimed on the basis of the contingency fee agreement (CFA) is significant in terms of considering the reasonableness of the amount claimed for legal fees. Even so, in respect of fees, I remind myself of the rationale of Rule 7.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. As was held in Wu (Estate) v. Zurich Insurance Company (2006), 2006 ONCA 16344, 268 D.L.R. (4th) 670 (Ont.C.A.), leave to appeal to S.C.C. refused [2006] 2 S.C.R. xiii, at para. 10:

The requirement for court approval of settlements made on behalf of parties under disability is derived from the courts parens patria jurisdiction. The parens patria jurisdiction is of ancient origin and is “founded on necessity, namely the need to act for the protection of those who cannot care for themselves … to be exercised in the “best interests” of the protected person … for his or her “benefit” or “welfare”; re: Eve, 1986 SCC 36, [1986] 2 S.C.R. 388 at para. 73.

[49] The court’s responsibility under the rule is a meaningful and significant one and requires careful and consideration of all the relevant materials. I adopt a submission made by counsel for the Public Guardian and Trustee as quoted by Justice Hackland in Aywas v. Kirwan, 2010 ONSC 2278 at para. 18 Justice Hackland indicated:

It is well established that the factors to be considered when fixing costs to be paid to counsel for a party under a disability are:

(i) the time expended by the solicitor; (ii) the legal complexity of the matters dealt with; (iii) the degree of responsibility assumed by the solicitor; (iv) the monetary value of the matters in issue; (v) the importance of the matters to the client; (vi) the degree of skill and competence demonstrated by the solicitor; (vii) the results achieved; (viii) the ability of the client to pay; (ix) the client’s expectation of the amount of the fee; (x) the financial risk assumed by the solicitor of pursuing the action, including the risk of non-payment, the likelihood of success and the amount of the expected recovery; and (xi) the social objective of providing access to justice for injured parties.

See: Re solicitor, 1973 ONCA 653, [1973] 1 O.R. 652 (C.A.) – this was a CFA case with both tort and accident benefit claims.

[50] Having considered the materials filed, together with the recommendations of the PG & T and the additional information provided when Mr. Deutschmann appeared before me, I conclude that the proposed settlement in the total amount of $1,200,000 (leaving aside the issue of counsel’s fees) is in the best interests of Mr. Krukowski. The Henderson Structured Settlement report estimates Adam’s life expectancy, taking into account his impairments, to be anywhere from approximately 48 to 53 years. Were it not for the structured settlement proposed, medical/rehabilitation benefits would be exhausted well before the period of life expectancy, as would attendant care benefits, under the proposed settlement

[51] The monthly payments are for life and accordingly provide significant financial stability.

[52] Without a settlement, there is no guarantee that Aviva would continue to fund the various benefits, or at the level now being paid. Future disputes as between Adam and Aviva could result in relay and increased legal fees.

[53] The proposed settlement has the advantage of a guarantee of payments to a secondary payee or beneficiary for 35 years, whereas without a proposed settlement, payments would terminate with Adam’s death or when the benefit amounts are exhausted.

[54] The proposed settlement provides finality and security to Adam and his family caregivers as opposed to a future or greater uncertainty.

[55] The proposed settlement is adequate to meet Adam’s foreseeable needs

[56] For these reasons I approve the proposed settlement (aside from the issue of counsel’s fees), subject to adding the recommendations from the PG&T, namely that:

i. Ewa file an amended management plant to the PG&T for approval within 30 days of the judgement approving the settlement. ii. That Ewa be required to pass her accounts at Adam’s guardian every 2 years or less as may be ordered by the court on application by the PG&T.

[57] The commentary under Rule 2.08(3) of the Rules of Professional Conduct of the Law Society of Upper Canada enumerates factors to be considered in determining the appropriate percentage for a contingency fee as follows:

In determining the appropriate percentage or other basis of the contingency fee, the lawyer and the client should consider a number of factors, including the likelihood of success, the nature and complexity of the claim, the expense and risk of pursuing it, the amount of the expected recovery and who is to receive an award of costs.

[58] Additionally, I agree with R. Smith J in (Re) Cogan, 2007 ONSC 50281, 2007, 88 O.R. (3d) 38 that there is an additional factor relevant, that is the attainment of valid social objective of insuring access to justice.

[59] I find the contingency fee agreement under which these fees are claimed, namely that entered into in August, 2018, to have been obtained in a fair manner in the sense as described by Cronk J.A. in Raphael Partners v. Lam (2002), 2002 ONCA 45078, 61 O.R. (3d) 417 at para 37 that:

“The fairness requirement of s. 24 of the Act is concerned with the circumstances surrounding the making of the agreement and whether the client fully understands and appreciates the nature of the agreement that he or she executed.”

[60] In this case, the contingency agreement is in writing and clearly indicates the 15% fee and provides an example of how it would be calculated. The agreement confirms that counsel and the client have discussed other types of retainers, that hourly rates vary amongst solicitors with whom the client can speak to compare rates, that the agreement will have to be reviewed by and approved of by a Judge, that the amount of any legal fees taxes and disbursements are subject to judicial approval, that the representation can be terminated at any time and that if that were to occur the agreement sets out the hourly rates to apply.

[61] I also take into account that the application material contains the original affidavit of the litigation guardian, together with a supplementary affidavit from her, both of which express her satisfaction as to the understanding of the agreement and her assessment that it is fair and understood.

[62] Accordingly, I conclude that the agreement was freely made, understood and accepted by the litigation guardian.

[63] Within the factors enumerated for consideration on the issue of reasonableness, I take into account the following:

A. The Time Expended by the Solicitor

[64] I have set forth those times in paragraphs 34 and 35, that is the time spent by counsel, but also by the clerks whom I accept are very experienced in this field. Mr. Deutschmann and his firm spends 75% of their practice on motor vehicle claims, usually involving both tort and accident benefit issues, but also cases involving accident benefit claims only. I accept Mr. Deutschmann’s assertions, when he appeared before me, that he has considerable experience in this field, as do his clerks, and that as a result they are able to handle these claims expeditiously and that they have considerable expertise in directing clients to the appropriate resources in an effort to maximize their clients’ awards.

[65] Notwithstanding this experience with the result that perhaps comparatively few hours are expended, nevertheless the amount claimed here for fees, either originally, or as recommended by the PG&T, whose recommendations counsel accepts, are still several multiples of the docketed time valued at counsels’ chosen rates.

B. The Legal Complexity of the Matter in Issue

[66] Mr. Deutschmann fairly concedes that the issues were not legally complex. I take into account that the claim for accident benefits was made before he even became involved in the file. As he conceded when he appeared before me, accident benefits were being paid by Aviva before counsel became involved. Before he was involved, the application was made for a determination of catastrophic injury and that determination was received by Aviva shortly after counsel had been retained, and disclosed to him by Aviva a couple of months later. Particularly once that determination had been made, in my assessment the level of legal complexity was minimal.

C. Results Achieved

[67] The settlement amount of $1.2 million dollars represents almost 80% of the accident benefits still available at the time of the settlement. Taking into account the fees as originally claimed, the amount realized by the client from the settlement would be 65%. Taking into account the recommendations of the PG&T, as accepted by counsel, the amount of the settlement realized by the client rises to 67%.

[68] Looking at it from the other perspective, that of Aviva, by entering into the settlement, they reduced their potential liability from a maximum of approximately $1.5 million dollars remaining after the benefits already paid, to the settlement sum of $1.2 million, a reduced in their liability by approximately 20%. It seems to me that is a meaningful advantage that would incline an insurer to resolve the matter.

[69] Mr. Deutschmann in his appearance before me stresses his belief that the settlement was very successful in that it lead to a result where Adam ended up with more than enough to cover his predicted needs for the rest of his life. Certainly that is a better result than what is sometimes an unfortunate result in these cases, but that is usually where the needs of the disabled client do no attract the same type of levels of compensation as were appropriate in Adam’s case, that is in part due to Mr. Deutschmann’s efforts, but also in large part as a result of Adam’s needs.

[70] As I said in approving the amount of the settlement, it certainly had advantages to Adam and his caregivers and in that sense is a good result. I would rate the result as acceptable or reasonable.

D. The Risk Assumed by the Solicitor

[71] In my opinion by the time Mr. Deutschmann became involved there was essentially no risk to the client that he would not recover substantial accident benefits. It is also my opinion that there was not realistically much risk to the solicitor. While he chose to structure the CFA so as to be based on a complete or partial settlement only, it was counsel who could negotiate a settlement. He had a fair degree of control over the process as the client was relying on his advice as is clear from the affidavit material.

[72] As is seen from the amount of time spent on the file by Mr. Deutschmann and his clerks, the degree of risk on the part of Mr. Deutschmann and his clerks was not extensive as indicated by the time docketed in completing the matter. Compared to most claims, the disbursements were minimal as many were apparently assumed by Aviva.

[73] When he appeared before me I questioned Mr. Deutschmann on this aspect of the retainer agreement, namely that it was dependent on settlement to trigger payment and he advised that if the matter proceeded to arbitration, then he would consider any arbitration award with respect to benefits owing to be an amount upon which he would be entitled to claim the contingency fee, but that he would not be entitled to claim such fee as to future benefits.

[74] This case is perhaps somewhat unusual in that there were three contingency fee agreements as previously outlined. Presumably each one effectively repealed its predecessors. By the time the last agreement was entered into, there was in my opinion virtually no risk to the solicitor. The determination of catastrophic impairment was made in November, 2014, a month after counsel’s initial involvement, and was made without his involvement. As Mr. Deutschmann fairly conceded in questioning before me, it was made as a result of a referral by the hospital, not as a result of counsel’s efforts. Aviva had commenced paying benefits before counsel became involved.

[75] Before me he also conceded that the factor of “likelihood of success” is not very apt to the circumstances of this case. It was a virtual certainty. As he admitted before me, in an accident benefits case involving catastrophic injuries, settlement is very common.

[76] I accept that counsel applied skill and competence in effecting the settlement amount, and that it was of importance to the client and his family.

[77] Mr. Deutschmann admitted that in accident benefits cases the usual percentage for fees in a CFA is 10-15%.

[78] In my opinion, having regard to the above factors, a 15 % rate was not reasonable given the virtual certainty of meaningful recovery with very little if any real risk.

[79] I fix the costs to counsel in the amount of $ 60,000 plus disbursements plus HST. This represents a recovery of 5% if the settlement amount, and more than 3 times the amount invested in the file. In my opinion this represents a sufficient degree of reward, in the particular circumstances of this case, so as to serve to promote the social objective of providing access to justice to injured plaintiffs in circumstances similar to those of Adam.

C.S. Glithero J. Released: June 10, 2019