Executive Summary: Key Legal and Evidentiary Issues

• Scope and timing of the mandate, including whether fees could be charged for work performed before the formal engagement letter was signed.
• Adequacy of the law firm’s duty to inform the client in advance about the financial terms and foreseeable cost of legal services under the Code of déontologie des avocats.
• Reasonableness and proportionality of the hours billed relative to the strategic licensing and regulatory work required for the restaurant and wine project.
• Significance of the senior lawyer’s limited time on the file compared with expectations created by references to his specific expertise.
• Judicial scrutiny of detailed time entries for meetings, emails, calls and strategic discussions, leading to targeted reductions where the court found the billing excessive.
• Application of jurisprudence on “justes et raisonnables” legal fees to partially uphold the claim while reducing the total invoice amount and associated charges.

Facts of the case

Barrette Légal inc. is a law firm that was retained by Alternative Capital Group in connection with the launch of a new restaurant, wine cellar and intermediary service in Québec. The client sought assistance with strategic planning for the necessary permits and regulatory requirements governing a project where members would bring and consume their own wine on the premises. The engagement therefore involved specialized regulatory and licensing advice, including analysis of the Régie des alcools’ records and the permit landscape for comparable businesses.

On 21 October 2024, Alternative Capital Group signed a mandate letter with Barrette Légal. The letter specified that Me William Archambault would be the lawyer responsible for the file, under the supervision of Me Bruno Barrette. It set out hourly rates not only for these two lawyers, but also for other lawyers, students, stagiaires and paralegals who might be involved. The firm was recommended to the client particularly because of Me Barrette’s expertise in this niche regulatory area, and his reputation was a key factor in the client’s decision to retain the firm.

The law firm later issued a detailed invoice dated 5 December 2024 for legal services rendered between 16 October 2024 and 15 November 2024. Each time entry set out the nature of the work, the time spent and the hourly rate. The total amount of fees and disbursements claimed was 7,502.50 CAD. The services included preparatory research for a “kick-off” meeting, strategic discussions about the optimal regulatory route, review of the Régie’s register to assess what competitors had obtained, participation in client meetings and follow-up communications by email and telephone.

At the small claims hearing in the Civil Division of the Court of Québec, Me Barrette appeared for the law firm and confirmed that the work reflected in the invoice had been done, with 45 minutes of time not billed as a courtesy. Me Archambault also confirmed that he had performed the services attributed to him. The defendant corporation was represented by its president, Mr. Claude Delage, who initially did not dispute the number of hours recorded on the invoice, but objected to paying the full amount for several reasons.

Positions of the parties

Alternative Capital Group argued that some of the hours billed preceded the formal start of the mandate, which it believed should have commenced only when the mandate letter was signed on 21 October 2024. In particular, Mr. Delage objected to the entries dated 16 October 2024, which totalled six hours of work by Me Archambault and Me Barrette. He maintained that he had not been informed that fees would be charged before execution of the engagement letter and that billing should therefore begin only as of the signature date.

The defendant further contended that certain services were unnecessary or not required, suggesting that the approach adopted on the file generated excessive time without sufficiently advancing the project. Although the client had retained the firm based on the glowing references to Me Barrette’s expertise, his personal involvement amounted to only about 3.3 hours, or 16.3% of the 20.2 total hours billed. The defendant implied that this allocation of work did not match the expectation of high-level expert involvement that underpinned the decision to hire the firm.

During the hearing, Mr. Delage expanded his initial position and questioned almost every entry on the invoice, often on the basis that the work was not strictly necessary to move the project forward. Nonetheless, there was no serious challenge to the fact that the hours had in fact been spent; the focus was on whether they should be compensable, and whether the client had been properly informed about costs and billing practices at the outset of the relationship.

Barrette Légal, for its part, maintained that the services were both real and necessary for the project’s regulatory strategy. The firm emphasized that the mandate effectively began on 16 October 2024, notwithstanding the later formal signature, and that the work done before 21 October was preparatory research and strategy essential to the initial meeting and overall planning. It argued that the time entries faithfully reflected the services performed and that the total invoice corresponded to fair and reasonable fees in light of the complexity and stakes of the permitting process.

Legal framework on lawyers’ fees and duty to inform

The court anchored its analysis in the Code de déontologie des avocats (C.d.a.) and in prior case law interpreting the rules on lawyers’ fees and the duty to inform clients of the financial aspects of a mandate. Drawing on decisions such as Gayrard c. Relitza, Blanchet c. Shimoda, Mathieu c. Marchand, Gelber c. Heimann and Ogilvy, Renaud c. Beauce, Société Mutuelle d’Assurance Générale, the judge recalled that an advocate must charge only fair and reasonable fees, proportionate to the services rendered, and must adequately inform the client about the expected cost of services.

Under article 99 C.d.a., the lawyer must ensure, before agreeing to provide professional services, that the client has all useful information concerning the financial terms and obtains the client’s agreement. The lawyer must also keep the client informed, during the mandate, of circumstances that could significantly change the anticipated cost of the services. These provisions are complemented by articles 101 and 102 C.d.a., which set out factors for assessing whether fees are “justes et raisonnables,” including the lawyer’s experience, the time and effort required, the difficulty and importance of the matter, the responsibility assumed, any unusual or urgent services and the results obtained.

The court noted that there is no fixed tariff for lawyers’ fees, and that merely multiplying an hourly rate by hours recorded is not sufficient. Judicial scrutiny looks to the overall fairness of the amount. Prior authorities have held that even when services were necessary and competently rendered, the court may still reduce the claimed amount if the billing does not reasonably reflect the value of the work or if the client was insufficiently informed of likely costs.

Application of the principles to the billing dispute

Applying these principles, the court first examined whether Alternative Capital Group had been properly informed that fees would be charged for work undertaken before signature of the mandate. The evidence did not establish that Mr. Delage had been told that the firm would bill for preparatory research and strategic discussions conducted prior to 21 October 2024. The court accepted that, from the client’s perspective, there was a legitimate expectation that fees would start to accrue only once the engagement letter was signed.

The judge gave particular attention to the two entries dated 16 October 2024. Together, they represented six hours: four hours of preparatory research, regulatory analysis, strategic discussion and participation in the first meeting by Me Archambault, and two hours of strategic discussion by Me Barrette. These entries accounted for fees of 1,300 CAD and 1,200 CAD respectively, for a total of 2,500 CAD. Because the client had not been clearly informed that these pre-signature services would be billed, and given the significant amount involved, the court found that the obligation to inform had not been fulfilled. That justified a reduction of the invoice by the full 2,500 CAD charged for 16 October.

The court then turned to the series of entries between 22 October and 4 November 2024, which consisted largely of emails, calls and discussions that, in the aggregate, exceeded 1,000 CAD. While not suggesting that the work had not been performed, the judge considered these amounts in light of the proportionality requirement and the jurisprudence cautioning against simply stacking hours without regard to the overall value and necessity of the services. In this context, the court deemed it reasonable to reduce these communications-related charges by an additional 500 CAD.

Overall, the original invoice of 7,502.50 CAD was therefore adjusted downward by 3,000 CAD: 2,500 CAD for the inadequately disclosed pre-mandate work on 16 October and 500 CAD for the excessive block of email and telephone communications between 22 October and 4 November. The remaining balance of 4,502.50 CAD was found to be justified, proportionate and consistent with the professional standards governing lawyers’ fees.

Ruling and outcome

In light of this analysis, the Court of Québec, Small Claims Division, partially upheld Barrette Légal’s claim. While acknowledging that the law firm had failed in its duty to properly inform the client about billing for pre-signature work, and that certain communications were billed at a level warranting reduction, the court accepted that the majority of the legal services were both real and reasonably priced given the regulatory complexity of the project.

The court therefore ordered Alternative Capital Group to pay Barrette Légal inc. 4,502.50 CAD in principal, together with interest at 5% per year and the additional indemnity provided for by article 1619 of the Civil Code of Québec, running from 5 May 2025. It also awarded 312 CAD in court costs. In total, the successful party, Barrette Légal inc., obtained a monetary award of 4,814.50 CAD (4,502.50 CAD plus 312 CAD in costs), with further statutory interest and indemnity to accrue in an amount that cannot be precisely quantified from the judgment alone.