Court File and Parties

COURT FILE NO.: CV-20-00650261-0000 DATE: 20210129

RE: RAHILA SEDIQIE, by her Litigation Guardian Khojatamim Sediqui, Applicant AND: WATERLOO INSURANCE COMPANY, Defendant

BEFORE: G. Dow, J.

HEARD: Written Submissions

COUNSEL: Zev Bergman, counsel for the Applicant Mary A. Meaney, counsel for the Respondent

Endorsement

G. DOW, J.

[1] The applicant’s counsel and the litigation guardian seek approval of a proposed settlement arising from injuries to Rahila Sediqie (born January 1, 1950). She was a passenger in a head on motor vehicle collision which occurred on July 11, 2017 near Blue Mountain. The applicant had immigrated to Canada in the mid-1990s from Afghanistan and was living independently prior to the accident.

[2] Rahila Sediqie suffered “catastrophic” level injuries for the purpose of claiming statutory automobile accident benefits. This included a head injury with hemorrhaging in multiple areas of the brain with resulting issues of memory loss, headaches and right leg weakness. Following emergency treatment at the Collingwood General and Marine Hospital, the applicant’s family transferred her to the Rouge Valley Health System as of July 14, 2017. Treatment continued at that location for the next three months. At that point, she was discharged to Seven Oakes Long Term Care facility where she remains to the present. The medical evidence produced supports her need for ongoing, extensive medical, rehabilitation treatment and attendant care.

[3] Applicant’s counsel retained Innovative Case Management Inc. who assessed the applicant in March, 2018 and concluded that she met the definition of “catastrophic” under the Ontario Statutory Accident Benefits Schedule (“SABS”). This made available up to $1 million of lifetime benefits for medical, rehabilitation and attendant care.

[4] Applicant’s counsel was retained with the assistance the litigation guardian, Khojatamim Sediqui (Tamim”). This is the applicant’s English speaking nephew who has been a secondary school teacher for many years and appears well suited to monitor and look out for the best interests of his aunt. He became her Attorney for Personal Care in February, 2018. For his and his aunt’s protection, he will need to have a separate account for all funds received and expended for the benefit of Rahila Sediqie and be subject to the passing of accounts upon the request of the Public Guardian and Trustee.

[5] The Retainer Agreement provided to me was signed July 17, 2017. While not specific, the Retainer Agreement provided for counsel to “obtain a favourable settlement” with regard to the July 11, 2017 “Personal injury incident”. I infer from this and counsel for the applicant confirmed that, in addition to the proposed settlement of Rahila Sediqie’s claim for statutory automobile accident benefits, a claim for tort damages has been commenced. Discoveries in that matter were scheduled for January 28, 2021 and the mediation is scheduled to proceed on March 9, 2021. I am advised that there are two companion actions arising from the accident, likely a result of other individuals injured in this collision. The police records indicate four occupants in each vehicle.

[6] The Retainer Agreement provided for a contingency fee of 25% to be paid plus HST on any settlement over $250,000.00. This is reduced to 22% if the recovery or “favourable settlement” is in excess of $1 million. The proposed settlement is in the amount of $675,000.00, all inclusive. As part of the proposed settlement, it is acknowledged the applicant has been paid $18,500.00 in non-earner benefits and $184,347.72 in medical, rehabilitation and attendant care benefits. This resulted in $815,652.78 being available to the applicant over the balance of her lifetime as expenses are applied for, approved and incurred within the provisions of the SABS.

[7] Counsel for the applicant sensibly deposed the discount on the potential lifetime limit available funds is appropriate as it puts control of the funds with the applicant and her nephew to be used as required for her benefit.

[8] I had concerns with the scope of the materials filed in the Application Record dated October 8, 2020 (received by me December 18) and requested additional material by letter dated December 24, 2020. I received the written response of counsel January 21, 2021 and have added these documents to the court file.

[9] The settlement proposed that an annuity be purchased for the applicant in the amount of $450,000.00 and provide payments of $2,764.86 per month. The payments continue for and are guaranteed for 15 years. The payments end on October 1, 2034. The applicant will then be 84 years of age or beyond her life expectancy (when the life impairment rating of plus four years is included) and as assessed for the annuity companies canvassed by the structured settlement company retained for this purpose. The remaining $225,000.00 is to be divided with the payment of $16,140.52 for disbursements incurred by applicant’s counsel (including expert accounts), and a solicitor and client fee of $164,714.87 plus HST of $21,412.93. This is in accord with the 25% contingency on the settlement amount after disbursements are deducted. The remaining $22,731.68 is to be paid to the litigation guardian for the benefit of Rahila Sediqie.

[10] The applicant’s only source of income is about $1,500.00 per month from an old age pension. Her current expenses are approximately $2,600.00 per month which has decreased subsequent to the COVID pandemic as a result of reduced availability of treatment from service providers having access to her long term care facility.

[11] The Retainer Agreement provided for billing the applicant based on hourly rates if the Retainer Agreement was terminated. The rates vary from $175.00 per hour for law clerks to $700.00 per hour for senior lawyers called to the Ontario Bar prior to 2008. As a result, I requested production of the time dockets with applicable hourly rates of the individuals involved at the firm as part of evaluating the fairness of the Retainer Agreement. This is in accordance with the decision of Henricks-Hunter v. 814888 Ontario Inc. (Phoenix Concert Theatre), 2012 ONCA 496.

[12] I received 29 pages of time dockets totaling fees incurred of $34,728.64. The individuals performing the work were identified only by initials and without details of their identity, position, level of experience, or hourly rate. Further, in reviewing the time dockets, I noted that the work performed detailed the time expended in advancing the tort claim as well.

[13] In support of the claim for the fee of $164,714.87, counsel submitted:

1. satisfaction and agreement on the part of the litigation guardian as to the proposed fee;

2. retaining the appropriate experts to examine and have the applicant assessed and accepted as “catastrophic” to maximize the monetary limits of accident benefits available;

3. ensuring the applicant received the $18,500.00 in non-earner benefits which were available to her;

4. providing the applicant with access to justice by offering the contingent fee arrangement with his firm accepting the risk of nonpayment if the claim was unsuccessful;

5. providing specialized senior level expertise in personal injury motor vehicle matters; and

6. noting that all time expended in this matter had not been docketed given the contingency fee arrangement.

[14] Regarding the proposed settlement of $675,000.00, all inclusive, I am prepared to approve the settlement and do so. My review of the evidence presented indicates the discount from the total amount of available benefits over time is appropriate to give Rahila Sediqie and her litigation guardian control over the cost of her necessary treatment and ongoing expenses for the remainder of her life.

[15] I have difficulty with the proposed fee to be charged for the legal services provided. The test under Rule 7.08 requires approval of the terms of the settlement to be in the best interests of the person under disability. The test for enforcement of a contingency fee retainer agreement is to first assess the fairness of the agreement as of the date it was entered into. The second test is to assess the reasonableness of the agreement as of the date of this hearing (see Henricks-Hunter v. 814888 Ontario Inc. (Phoenix Concert Theatre), supra at paragraph 13).

[16] Applicant’s counsel acknowledged (in paragraph 48(e) of his affidavit) the risk assumed for an unsuccessful outcome was “moderate to low”. I agree. I was not provided with any evidence of any dispute regarding any benefit applied for and paid to the applicant. The injury suffered were serious and accepted by the respondent’s insurer as catastrophic, without dispute. The skill and ability of the counsel involved in the matter is acknowledged. His firm regularly advertises its expertise in personal injury matters to the public across Southern Ontario. To that end, one would expect there to have been a significant level of efficiency documenting the claim and moving the matter forward. This appears to have occurred as evidenced by the time dockets totalling fees of only $34,728.64 to date for both the accident benefit claim and the tort damages. I am prepared to and find the contingent fee retainer agreement was reasonable when it was entered into. I do not find, based on the evidence before me, that the contingency fee to be charged reasonable as of this hearing. I have applied and considered the factors in Henricks-Hunter v. 814888 Ontario Inc. (Phoenix Concert Theatre), supra at paragraph 22) in reaching this conclusion.

[17] As a result, I must determine the appropriate fee and what is in the best interests of the person under disability. I have attempted to balance the docketed time and legal expenses incurred, the events which have occurred in the claim and what would occur should there be a termination of the Retainer Agreement. I have reviewed the efforts and records of the firm representing the applicant with the percentage fee sought. I am mindful of the need to ensure access to justice for injured persons under disability and that this type of legal service should be valued and willingly undertaken by members of the bar with expertise in this field.

[18] I have concluded the sum of $ 70,000.00 is the appropriate fee in this matter. Given this is based in part on the time dockets provided which included time expended advancing both the accident benefit claim which has now concluded and the tort claim, I also order any settlement reached in the tort matter be forwarded to me for approval. That material should be forwarded to my attention at Judges’ Administration, Room 140, 361 University Avenue, Toronto or electronically to my assistant at michelle.giordano@ontario.ca.

[19] I require a revised draft Judgment to be forwarded to me by applicant’s counsel to reflect the following:

a) settlement of the statutory accident benefit claim of the applicant, Rahila Sediqie is approved;

b) the respondent, Waterloo Insurance Company, pay to Diamond and Diamond Lawyers LLP, in trust, $225,000.00 (in non-structured consideration), which shall be distributed as follows:

i) to Diamond and Diamond Lawyers LLP, the amount of $16,140.52 for disbursements in full satisfaction of these accounts;

ii) to Diamond and Diamond Lawyers LLP, the amount of $70,000.00 for solicitor and client fees, plus $9,100.00 for HST in full satisfaction of legal services rendered to the date of this Judgment;

iii) the balance of the proceed settlements, $129,759.48 be paid to Khojatamim Sediqui, litigation guardian for Rahila Sediqie, in trust for her sole benefit and into a separate account with his passing of accounts as the Public Guardian and Trustee may require; and

iv) the respondent, Waterloo Insurance Company fund the annuity referred to and in the form required and as set out in the previously forwarded draft Judgment

v) service of this Judgment on the Public Guardian and Trustee.

Mr. Justice G. Dow

Released: January 29, 202