Court File and Parties

COURT FILE NO.: CV-20-00654073 DATE: 20210211 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: LAILA FIRBY, by her Litigation Guardian, ANDREA CLEATOR AND: INTACT INSURANCE COMPANY

BEFORE: Mr. Justice Chalmers

COUNSEL: J. Campisi, for the Applicant No one appearing for the Respondent

HEARD: In writing

Endorsement

[1] The Applicant brings this Application pursuant to R. 7.08 seeking an order of the court approving the Accident Benefit settlement of Laila Firby. Ms. Firby is a party who is disabled within the meaning of Section 6 of the Substitute Decisions Act, 1992. Ms. Firby is currently 68 years of age.

Background

[2] On January 11, 2019, Ms. Firby was walking across Paterson Ave. at its intersection with Danforth Ave. when she was struck by an unidentified vehicle. The vehicle left the scene of the accident. Ms. Firby was taken by ambulance to St. Michael’s Hospital where she was diagnosed with severe traumatic brain injury and multiple fractures. She required surgery to her shoulder. She had functional impairments as a result of the brain injury. She was required to participate in occupational therapy, speech language pathology, and physiotherapy. Her cognitive difficulties make living independently impractical.

[3] On April 9, 2019, Dr. Marotta completed a capacity assessment. He concluded that Ms. Firby was incapable of managing her own affairs or instructing counsel. On April 16, 2019, Laila’s daughter, Andrea Cleator was appointed the Attorney for Property. On December 27, 2019, Ms. Cleator was named the Litigation Guardian.

[4] Ms. Firby, by her Litigation Guardian, retained Campisi LLP to represent her in both her tort action and the claim for accident benefits. The Litigation Guardian entered into a contingency fee agreement with the law firm, which provided that upon the successful negotiation or disposition by a trier of fact, the law firm is entitled to a fee of 25% of a lump sum settlement plus HST and disbursements.

AB Settlement

[5] The Accident Benefit claim settled on September 18, 2020, for the all-inclusive amount of $744,116.26. The breakdown of the settlement was as follows:

Past and Future income replacement benefits $ 22,916.00 Past and Future medical benefits $287,511.95 Past and Future rehabilitation benefits $143,755.97 Past and Future Attendant care benefits $215,633.96 Past and Future housekeeping $ 75,198.38

[6] Of the amount of the settlement the sum of $297,646.50 is to be placed in a structure.

[7] The accident benefit policy provided coverage for $1,000,000 for med/rehab treatment and attendant care benefits. Ms. Firby had used $114,164.87 in medical benefits, $85,447.24 in rehab benefits and $58,457.84 in attendant care benefits, for a total of $258,069.95. The settlement was for $646,901.88 for med/rehab and attendant care. As a result, the settlement was for almost 90% of the remaining limits. The lump sum settlement allows Ms. Firby to manage her own care without having to continue to apply for benefits from her AB insurer. Here, Ms. Firby was resistant to treatment and it is unlikely she would have incurred treatment which was equal to or exceeded the amount of the settlement. The amounts paid for income replacement and housekeeping take into account Ms. Firby’s age and the fact that her future claims will be limited.

[8] I am of the view that the AB settlement is appropriate and reasonable in all the circumstances.

Proposed Fees for the AB Claim

[9] Campisi LLP proposes a fee of $186,029.07 for legal fees, $24,183.78 for HST and $9,990.77 for disbursements. This fee is based on 25% of the total settlement of $744,116.26, in accordance with the contingency fee agreement.

[10] A contingency agreement is not binding on a party under disability until the agreement receives approval by the court. The fee agreement was not approved by the court before it was finalized and therefore the agreement must now be reviewed as part of the court approval process: Solicitors Act, R.S.O. 1990, c. S.15, s. 5(1). The agreement may be enforced only if it is in all respects fair and reasonable between the parties: Solicitors Act, s. 24.

[11] Contingency fee agreements are subject to careful scrutiny by courts. Only the court is entitled to determine whether the contingency fee agreement is fair and reasonable as between the parties: Jorisch v. Toronto Catholic School Board, 2017 ONSC 784, at para. 48. In determining whether the agreement is fair and reasonable, the court is to follow a two-step process. First, the fairness of the agreement is assessed as of the date it was entered into. The second step is to determine the reasonableness of the agreement as of the date of the hearing: Henricks-Hunter v. 81488 Ontario Inc. (Phoenix Concert Theatre), 2012 ONCA 496 at para. 20.

[12] The docketed time spent by the professional staff is a relevant factor to determine the reasonableness of the agreement. In a contingency fee arrangement, lawyers and their professional staff may not record all of their time. Here, counsel states that although they do their best to capture all the time spent, there is time that is not captured, including telephone calls. Although there is reference to the time dockets being attached at Exhibit DDD, the exhibit was not included in the application material received by the court.

[13] Counsel for the Plaintiff provided the following summary of the dockets pertaining to the accident benefit proceeding:

Initial consultation with Laila and her family; various meetings and communications with Andrea Cleator in her capacity as Litigation Guardian; obtaining and reviewing all medical records and reports; production of relevant documents to the Respondent; preparing forms for License Appeal Tribunal; attending case conference; preparing for Tribunal proceedings; drafting FSCO forms and related documents, including OCF forms; drafting correspondence to counsel, client, and experts; communications and correspondence to Accident Benefits Insurer’s representatives/adjuster; communications and correspondence with various treatment providers; Correspondence to the Intact claims manager; negotiating a resolution of the Accident Benefits claim; review of settlement documents and releases; communications and correspondence with treatment providers to follow up for outstanding amount owed; and other necessary and ancillary matters throughout.

[14] Counsel for the Applicant takes the position that the fees charged are fair and reasonable given the unique challenges in the claim. The challenges include the determination of Laila’s capacity, the additional time and effort to manage and address Laila’s condition and the family’s concerns, the additional time to communicate with Laila’s litigation guardian, the advancement of the process through the LAT, beyond the norm communications with the adjuster and supervisor at Intact, challenging the reasons provided by the insurer for the insurer examinations, advancing Laila’s rights under PIPEDA, issues involved in editing the medical practitioner’s report, funding of the home modification, and addressing issues with respect to the Power of Attorney.

[15] Although the summary of the dockets and the detail provided with respect to the unique features of the matter is helpful, I require the actual time dockets to determine whether the fee of $186,029.07 is fair and reasonable in all the circumstances.

The Tort Settlement

[16] On October 13, 2020, a few weeks after the settlement of the AB claim, Ms. Firby settled her tort action she brought against her insurer pursuant to the uninsured/unidentified motorist coverage. The settlement was subject to court approval. The proposed settlement was in the amount of $990,000.00 all-inclusive of claims, interest, costs, HST and disbursements. The breakdown of the tort settlement was as follows:

Laila Firby – Damages inclusive of interest $877,036.29 Party and Party costs $ 87,500.00 HST $ 11,375.00 Disbursements $ 14,088.71 Subtotal $990,000.00

[17] Campisi LLP proposed a fee of $219,259.07 which was 25% of the total tort settlement not including costs, plus HST of $28,503.68 and disbursements of $14,088.71.

[18] The matter came before me for court approval of the settlement. It is not clear from the record as to why court approval of the Accident Benefit claim was not sought at the same time as the tort action. As a matter of practice, it is preferable that both the Accident Benefit and tort actions be subject to the same court approval process.

[19] Although I found the amount of the tort settlement to be reasonable in the circumstances, I required additional material to determine whether the proposed fees were reasonable. I directed the Plaintiff’s solicitor to provide the actual time dockets. The time dockets showed that the total time docketed on the tort file was 81.60 hours. Based on the hourly rates of the professionals who worked on the file, the value of the docketed time was $46,974.75. The Plaintiff’s solicitor was seeking a premium of $172,284.32 in the settlement of the tort action.

[20] By endorsement dated December 15, 2020, I reduced the amount claimed for fees in the tort action from $219,259.07 to $175,000.00.

Disposition

[21] I adjourn this matter for a period of 20 days to allow the Applicant’s solicitor to provide additional material to support the claim for his fees. The time dockets, which set out the hours for each professional who worked on the file and their hourly rates, are to be provided. Care must be taken to ensure that the dockets for the Accident Benefit proceeding not include any work which was incurred with respect to the tort action.

[22] I remain seized.

DATE: February 11, 2021