Ruling rejects argument that former client had statutory right to assessment
In a dispute over legal fees, the Ontario Superior Court stayed the client’s proceedings that sought a fee assessment and ordered her dispute with the family law firm to proceed via arbitration pursuant to an arbitration clause in their retainer agreement.
In Bhogal v. Lawson, 2026 ONSC 2282, the plaintiff was a former client of the defendant family law firm. In the context of their fee dispute, the plaintiff sought an assessment of her legal fees under Ontario’s Solicitors Act, 1990.
The firm alleged that all fee disputes were subject to arbitration under an arbitration clause in the retainer agreement.
Citing s. 7(2) of Ontario’s Arbitration Act, 1991, the plaintiff asked the court to exercise its discretion not to stay her fee assessment proceedings.
Stay granted
The Ontario Superior Court of Justice determined that the circumstances did not justify exercising its discretion to refuse the stay under s. 7(2) of the Arbitration Act.
Citing Haas v. Gunasekaram, 2016 ONCA 744, the court listed the following factors to consider when deciding whether to grant a stay under s. 7 of the Arbitration Act:
- whether there was an arbitration agreement
- what the dispute’s subject matter was
- what the scope of the agreement was
- whether the dispute arguably fell within the agreement’s scope
- whether there were grounds to exercise discretion to refuse the stay
As the parties did not dispute the first to fourth factors, the court tackled the fifth part of the test. The court saw no improvident bargain arising from any unequal bargaining power between the parties.
The court found that the plaintiff had an opportunity to review the retainer agreement, which clearly set out the arbitration provision, and to ask questions prior to signing.
The court noted that the plaintiff asked no questions before signing beside a notation stating that she had read and understood all the terms. The court added that she twice signed the schedule pertaining to arbitration.
The court acknowledged that the plaintiff might have been distressed when she sought a lawyer and when she signed the retainer agreement. However, the court saw no evidence to:
- determine the plaintiff’s distress level
- decide whether her distress level could warrant finding unequal bargaining power or a disadvantage in the contracting process that prevented her from comprehending and appreciating the full impact of the retainer agreement’s terms
- find that the defendant firm engaged in improper tactics or undue pressure
- suggest any limitations to the plaintiff’s ability to review or understand the agreement or ask questions about it
The court rejected the argument of the plaintiff’s counsel that the arbitration provision was oppressive because it required the parties to share the arbitration costs or because it required an experienced and consequently expensive arbitrator.
The court pointed out that the arbitration provision allowed the arbitrator to adjust the allocation of costs between the parties rather than sticking to the 50-50 split. The court added that the potential financial cost to the plaintiff did not necessarily amount to an improvident bargain.
The court also disagreed with the argument of the plaintiff’s counsel that the client had a right under the Solicitors Act to assess legal fees through the court, which prevailed over the retainer agreement’s terms.
According to the court, through the arbitration provision, the parties chose to have an arbitrator rather than a judge assess fees. The court concluded that it should respect the parties’ choice to resolve disputes via an arbitrator.
