Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: KENZIE ALICE BUNCH, a minor by her Litigation Guardian, KIMBERLY MARIE BUNCH, KIMBERLY MARIE BUNCH, personally, and JEFFREY BUNCH Plaintiffs
AND:
MIDWIFE AMY JACKSON, MIDWIFE ALEXIS SIESWERDA, MIDWIFE NATHALIE QUEVILLON-DUSSAULT, DR. RAGA BADR ELMAARIF SIRROR, DENNIS MICHAEL POULIN, ALEXANDRA BRAZEAU, NURSE BRITTANY LOWEY, NURSE MILDRED M. WESELAK, NURSE EMMA SURINS, NURSE DONALDA L. SEGGEWESS, NURSE BARBARA MARY MCFARLANE, NURSE ANNE SCOTT, NURSE HEATHER LYNN MARIN, NURSE KATHRYN KIRCHENR, NURSE CHELSEY KEYES, NURSE J. DOE, THUNDER BAY REGIONAL HEALTH SCIENCES CENTRE, COMMUNITY MIDWIVES OF THUNDER BAY, DR. RUDOLF NOVAK, and THIUNDER BAY ULTRASOUND INC. Defendants
BEFORE: Mr. Justice Chalmers
COUNSEL: R. Bogoroch and H. Brown for the Plaintiffs
HEARD: In writing
ENDORSEMENT
OVERVIEW
1The Plaintiffs bring this Motion pursuant to R. 7.08 for an order approving the settlement of the claim, in the amount of $10,000,000 all-inclusive of claims, interest, costs, H.S.T. and disbursements.
2The minor Plaintiff, Kenzie Alice Bunch (“Kenzie”) was born on June 7, 2015. She has cerebral palsy, which is manifested by spastic quadriplegia epilepsy and global decay. She is unable to feed, dress or otherwise care for herself. She is unable to walk independently or communicate. She currently requires 24-hour care and it is expected that this will always be the case.
3Kimberly Bunch (“Kimberley”) became pregnant in approximately September 2014. On September 30, 2014 she came under the care of the Community of Midwives of Thunder Bay. The Defendants, Amy Jackson and Nathalie Quevillon-Dussault were her primary obstetrical caregivers. Kimberley’s pregnancy was complicated by gestational diabetes mellitus, which was controlled by diet.
4At approximately 4 a.m. on June 7, 2015, Kimberley went into labour. The midwives were notified, and she went to the Thunder Bay Regional Health Sciences Centre. Kimberley was admitted to the labour and delivery ward. At 7:05 p.m. Kimberley delivered Kenzie via spontaneous vaginal delivery. The delivery was complicated. Kenzie was limp and pale at birth. There was a need for resuscitation. The medical reports prepared on behalf of the Plaintiffs conclude that Kenzie sustained neurological injury due to intrapartum hypoxia-ischemia.
5Kenzie’s parents retained Bogoroch & Associates LLP to act on their behalf and on behalf of their daughter. On February 24, 2017, they entered into a Contingency Fee Agreement (CFA). The CFA provides that the fee is 35% of all amount recovered excluding disbursements and excluding costs payable to the clients.
6On January 7, 2021 the parties attended a private mediation. The parties agreed to settle the action, subject to court-approval, in the amount of $10,000,000 inclusive of claims interest and costs. The proposed allocation of the settlement is as follows:
a. $8,500,000 for the claims for Kenzie;
b. $182,500 for the FLA claim of Kimberley;
c. $182,500 for the FLA claim of Jeffrey Bunch;
d. $85,000 for the Ministry of Health’s subrogated interest;
e. $905,000 for partial indemnity costs; and
f. $145,000 for disbursements.
7Bogoroch & Associates LLP proposes to render an account in the amount of $3,136,500 inclusive of counsel fee, H.S.T. and disbursements. The breakdown of the fee is as follows:
a. $2,550,000 for Kenzie’s claim;
b. $331,500 for H.S.T.;
c. $145,000 disbursements; and
d. $109,500 for Kimberley and Jeffrey’s claims
8The fee for Kenzie is based on a 30% of her gross recovery net of disbursements and the amount paid for partial indemnity costs (30% of $8,500,000). This is a reduction from the 35% figure set out in the CFA.
ANALYSIS
9Pursuant to R. 7.08(1) no settlement of a claim made by a person under disability is binding without approval of a judge. The judge’s task is to review the reasonableness of the proposed settlement and the fees, to protect the person under disability. This process is not a “rubber stamp”. It requires the judge to determine the reasonableness of the settlement and fees based on the evidence.
10Contingency fee agreements are 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.
11Contingency 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: Jorisch v. Toronto Catholic School Board, 2017 ONSC 784, at para. 48. In determining whether the CFA 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. 814888 Ontario Inc. (Phoenix Concert Theatre), 2012 ONCA 496, at para. 13. As stated by the Ontario Court of Appeal in Raphael Partners v. Lam (2002), 2002 45078 (ON CA), 61 O.R. (3d) 417 (S.C.):
When a fee agreement is challenged under the Act, the solicitor bears the onus of satisfying the court that the way in which the agreement was obtained was fair and that the terms of the agreement are reasonable. 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: Best v. Yegendorf, Brazeau, Seller, Prehogan & Wyllie (1998), 1998 14646 (ON SC), 37 O.R. (3d) 633 (Gen. Div.).
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: Cohen v. Kealey & Blaney (1985), 10 O.A.C. 344 (C.A.); Desmoulin v. Blair (1994), 1994 333 (ON CA), 21 O.R. (3d) 217, 120 D.L.R. (4th) 700 (C.A.): at paras. 37, 50
12The time spent on by the file by the Plaintiffs’ lawyers is a relevant factor in determining the reasonableness of the fees charged. This factor can only be properly evaluated by reviewing the time dockets. As stated by J. Wilson, J. in Mohamed v. TD Insurance Meloche Monnex, 2020 ONSC 3320:
[…] Obviously dockets are required to be produced in all cases. A judge cannot assess the reasonableness of fees proposed to be charged without the facts and the chronology reflected in the dockets confirming what has been done on the file, and by whom.
The failure to provide dockets, disbursements and written retainer agreements is a common oversight. Dockets and disbursements must be produced by all counsel in any section 7.08 approval application for a minor or person under disability, whether or not the fee arrangement is based upon a contingency fee. Similarly, any written retainer agreement also must be produced.
This disclosure is crucial, mandatory information in all Rule 7.08(1) motions and should be standard practice.
Failure to make this essential disclosure causes delays and increases costs: Paras. 10 -13.
13Plaintiffs’ counsel did not produce the time dockets. Ms. Brown, in her affidavit, states that from February 2017 to date, the firm’s total docketed time is in excess of 940 hours. Ms. Brown was called to the bar in 1993 and Mr. Bogoroch was called to the bar in 1983. Also working on the file were Toby Samson who was called in 2016 and Alexandra Roman who was called to the bar in 2017. Also assisting was Elisa Gill, a law clerk with 18 years of experience. Based on the CFA, Mr. Bogoroch’s hourly rate is $875, Ms. Brown’s hourly rate is $650 and the rates for Ms. Samson and Ms. Roman are in the range of $400-500. The hourly rate for law clerks is in the range of $150-300.
14I am not prepared to approve the settlement at this time. I require further evidence to establish the reasonableness of the proposed fee. Plaintiffs’ counsel is directed to produce the time dockets which set out the hours for each professional who worked on the file.
DISPOSITION
15I adjourn this mater for a period of 14 days to allow Plaintiffs’ counsel to provide additional material to support the claim for the fees. Counsel is directed to produce the time dockets which set out the time each professional worked on the file.
16I remain seized.
DATE: MAY 4, 2021