Court File and Parties

COURT FILE NO.: CV-19-141057-00 DATE: 2020-06-25 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: OWEN MAIERS a minor through his litigation guardian JEFF MAIERS, Plaintiff AND: LEN’S COVE MARINA, Defendant

BEFORE: The Honourable Justice Dawe

COUNSEL: H. Pottins, for the Plaintiff

HEARD: In Writing

Endorsement (Approval of settlement)

[1] Counsel for the minor plaintiff has brought a motion in writing pursuant to Rule 7.08 of the Rules of Civil Procedure seeking judicial approval of a settlement of the plaintiff’s claim.

[2] In July 2016 the minor plaintiff, then thirteen years old, tripped and fell while at Len’s Cove Marina. He was taken to the hospital and diagnosed as having suffered internal injuries, including a lacerated pancreas.

[3] In February 2018 the plaintiff retained Barapp Law Firm (“Barapp”) to bring a civil action against the defendant Len’s Cove Marina. His litigation guardian signed a contingency fee retainer agreement in which he agreed to pay Barapp 35% of any damages recovered, plus disbursements and HST.

[4] In October 2019 the parties agreed to settle the claim for $85,000, all inclusive. Barapp is proposing that the settlement amount be distributed as follows:

(i) $29,195.72 – 34.3% of the settlement – to Barapp as legal fees; (ii) $3,795.44 as HST on Barapp’s fees; (iii) $1,583.67 to Barapp for disbursements plus HST; (iv) $7,718.21 to OHIP in payment of its subrogated claim; (v) $42,706.96 to the plaintiff, to be paid into court until he reaches the age of majority.

[5] Barapp’s Rule 7.08 motion first came before my colleague Sutherland J. on November 21, 2019. He declined to approve the proposed settlement, endorsing the motion record as follows:

Motion to approve infant settlement. There is no medical evidence provided that Owen has recovered fully from his injuries. Was he not seen by his family physician.

The lawyer has not indicated what steps were taken to support 35% fee.

At this point settlement not approved.

[6] Counsel has now filed a supplemental affidavit attaching additional medical documentation. Based on this new information and the medical documentation that was in the original application record, I am satisfied that the plaintiff has indeed recovered fully from his injuries. Indeed, he appears to have no longer been displaying any signs of lasting injury by as soon as October 2016, some three months after the accident.

[7] In these circumstances, I am satisfied that the proposed $85,000 settlement is reasonable. What remains to be considered is the reasonableness of Barapp’s proposed fees.

[8] As Cronk J.A. observed in Raphael Partners v. Lam at para. 50 (Ont. C.A.):

The factors relevant to an evaluation of the reasonableness of fees charged by a solicitor are well established. They include the time expended by the solicitor, the legal complexity of the matter at issue, the results achieved and the risk assumed by the solicitor. The latter factor includes the risk of non-payment where there is a real risk of an adverse finding on liability in the client's case.

[9] In the case at bar, I have no concerns about the result Barapp achieved for the plaintiff. However, Barapp does not appear to have assumed much risk by taking on this file. While the plaintiff’s injuries were not trivial, he appears to have fully recovered within a few months of the July 2016 accident, well before he retained Barapp and commenced his civil action, in 2018 and 2019 respectively. The defendant marina had insurance, and the settlement appears to have been negotiated between counsel for the plaintiff and the insurance company. In these circumstances, it seems to me there was a strong likelihood from the outset that the plaintiff’s case would ultimately settle somewhere within a relatively narrow band of outcomes.

[10] In his supplemental affidavit, Mr. Pottins states:

As lawyer of record on this matter, I negotiated the settlement between March 2019 and June 2019. I engaged in several phone conversations with the adjuster in order to secure a mutually satisfactory settlement. This included discussing the relevant case law related to minors in slip and fall injuries, and exhaustive discussions and reviews of the medical records.

Prior to obtaining a settlement, Barapp Law firm worked many hours on file review, client consultations, case law review and medical file reviews in order to develop a strategic case strategy and persuasive arguments on liability and damages. We believe that our diligence and expertise were significant factor in obtaining the favourable settlement outcome and we believe this justifies our retainer agreement of 35 percent.

[11] However, Mr. Pottins does not support his assertion that his firm “worked many hours” on the file by providing any dockets or, indeed, any information as to exactly how much time counsel or staff actually spent.

[12] In this regard, it is worth noting that the contingency fee retainer agreement provided that in the event of a breakdown in the solicitor-client relationship Barapp would bill at its ordinary hourly rates of $345/hour for senior lawyers, $225/hour for associates, $180/hour for paralegals and $160/hour for articling students. Barapp’s proposed contingency fee of $29,195.72 would represent almost 85 hours of work by senior counsel at these hourly rates, and considerably more hours if some of the work was done by junior counsel, articling students or paralegals.

[13] This case does not appear to have involved any significant legal or factual complexity. The medical documentation that has been provided to me is not extensive. Essentially, the plaintiff was first taken to a local hospital and went the next day to the Children’s Hospital of Eastern Ontario in Ottawa. He appears to have been discharged a few days later and to have attended a follow-up appointment in October 2016. The associated medical records are only a few pages long, and in my view would have taken counsel only minimal time to review and master. No details have been provided to me about any “client consultations” that were required or about what “case law review” was necessary. It seems likely to me that the actual time expended by Barapp’s lawyers and staff was very much less than 85 hours, and that relatively little of this work had to be done or was done by senior counsel.

[14] I accept that Barapp did assume some slight risk by taking on this case on a contingency basis, and agree that it is not necessarily unreasonable for Barapp to collect more in fees than it would have been able to bill on a per-hour basis. However, I find the proposed fee of $29,195.72, calculated as almost 35% the net recovery, to be manifestly excessive and unreasonable in the circumstances, and conclude that the contingency fee agreement is accordingly unenforceable.

[15] Considering all the relevant circumstances, I would consider a fee based on 20% of the net recovery, plus HST, to represent appropriate compensation for Barapp. In dollar terms this comes to $17,000 plus $2,210 in HST, or $19,210 in total.

[16] I am satisfied that the amount Barapp proposes to recover for disbursements and to pay to OHIP for its subrogated claim are both reasonable. Accordingly, once Barapp’s fees are adjusted, the revised breakdown of the settlement funds will be as follows:

(i) $17,000 to Barapp as legal fees; (ii) $2,210 as HST on Barapp’s fees; (iii) $1,583.67 to Barapp for disbursements plus HST; (iv) $7,718.21 to OHIP in payment of its subrogated claim; (v) The balance of $56,488.12 to the plaintiff, to be paid into court until he reaches the age of majority.

[17] Judgment will issue in accordance with this endorsement.

The Honourable J. Dawe

Date: June 25, 2020