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More clarity on resolving lawyer fee assessments?

Ontario Divisional Court ruling says matters can still be dealt with in Small Claims Court.
|Written By Yamri Taddese

Order could be restored at the Ontario Superior Court’s overstretched fee assessment office, thanks to a decision yesterday from the Divisional Court that relieved the court of sole jurisdiction to handle those files.

The Divisional Court’s ruling contradicts another one released by the same court in 2014. Jane Conte PC v. Josephine Smith shocked the system when it said all lawyer fee disputes must be resolved at the Superior Court. Prior to the 2014 ruling, those matters could be dealt with at the Small Claims Court.

A more liberal interpretation of the Solicitors Act, Justice Michael Dambrot’s decision in Cozzi v. Heerdegen, says the Small Claims Court has jurisdiction to deal with claims arising from simple retainers. Dambrot says only contingency fee arrangement accounts need be assessed by the Superior Court’s assessment office.

In Conte, Justice Ian Nordheimer pointed to a little-known section of the Solicitors Act, which states all claims for non-payment must go to the Superior Court.

“Partly because of that decision, a very significant jam was created,” says Toronto lawyer Ben Hanuka of Law Works PC. “Everything had to be diverted through this narrow pipe [at] the assessment office.”

In an endorsement written early this year, Superior Court Justice Sean Dunphy said the delay required to get an assessment hearing is “unacceptably long.” But in the same ruling, Dunphy dismissed requests by Toronto intellectual property law firm Gilbert’s LLP for an order that two clients pay outstanding bills arising from undisputed retainers.

Essentially, the issue at the centre of the chaos is poorly drafted legislation, according to Hanuka. He says, s. 17 of the Solicitors Act might could, technically, be read to suggest that every written agreement for legal services must get a blessing from the Superior Court before a payment can be made.

“The problem is that it’s almost nonsensical,” Hanuka says, adding Dambrot’s decision in Cozzi is “the only way forward.”

After Nordheimer wrote Conte, paralegals like Frederick Goodman, who went the Small Claims Court to resolve lawyers’ fee dispute matters, could no longer do those jobs as paralegals don’t have standing at the Superior Court. This morning, speaking from the Small Claims Court, Goodman says he’s “back in business.”

“This decision . . . restores our ability to pursue claims for lawyers in the Small Claims Court for unpaid accounts but only in so far as those [accounts] which are not contingency fee arrangements,” says Goodman .

With files from Michael McKiernan


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