Court says client must pay personal injury lawyer for work in case

A Toronto-area lawyer has been granted a charging order for almost $240,000 after a client involved in a motor vehicle collision attempted to deal directly with an insurance company from which he was seeking damages.

Court says client must pay personal injury lawyer for work in case
Muhammad Alam says a recent ruling involving him and his firm shows that lawyers can successfully take their client to court to obtain fees for their work in personal injury matters.

A Toronto-area lawyer has been granted a charging order for almost $240,000 after a client involved in a motor vehicle collision attempted to deal directly with an insurance company from which he was seeking damages.

In Anjum v. Doe, 2018 ONSC 4344, lawyer Muhammad Alam sought an order removing himself as the counsel of record for his client, Javed Anjum, as well as a charging order for any settlement that Anjum reached for injuries he sustained in the collision.

Anjum had retained Alam days after the September 2010 collision, when the tractor trailer Anjum was travelling in was overtaken and struck by another, uninsured vehicle. The ruling noted Alam filed a statement of claim on Anjum’s behalf in 2012, and in June 2017, Alam resolved the accident benefit claim “for a substantial sum.”

In his work on the case, Alam attended three examinations for discovery, helped with medical defence medical assessments and assisted with hiring medical legal experts, the ruling noted, as well as attended a mediation and pretrial conference.

The trial was scheduled to begin in January 2019.

However, this past April, Anjum told Alam he wanted to settle his claim and deal directly with the defendant, State Farm Insurance. In May, Anjum told Alam he was terminating his agreement and seeking a new lawyer.

Justice David Price of the Ontario Superior Court of Justice sided with Alam and said the lawyer and his firm were entitled to a charging order against any settlement Anjum may receive, for his years of work on the matter.

“Mr. Alam and his firm are entitled to a charging order because their services, which have brought the action to the point where a settlement can be negotiated or a judgment obtained, were instrumental in enabling Mr. Anjum to recover the damages he is claiming in his action,” said the ruling.

According to the ruling, the retainer agreement between Anjum and Alam specified that Alam couldn’t end the agreement to avoid paying fees and that Anjum would have to pay a fee to Alam’s law practice to cover the firm’s work on the file, plus disbursements the firm incurred on his behalf. It also stated that if there was a settlement or judgement, Alam would be paid immediately for his work, and if there was a new lawyer involved, they would pay Alam’s fees and HST as a first charge.

“This kind of ruling really helps — it helps all other lawyers as well,” says Alam, partner and founder of Alam Law Office PC. “They should take a stand. Any time that you feel like your client is just trying to take advantage of you, you should just stand up and don’t let them go, because we work very hard for these individuals.”

In the ruling, Price said that if a judgment or settlement was achieved by Anjum it would be due to “the instrumentality” of Alam.

“The determination as to a lawyer’s entitlement to a charging order for fees and disbursements in an action depends on whether it can reasonably be said that a settlement or judgment obtained by the client will have been achieved through the ‘instrumentality’ of the lawyer’s efforts,” Price wrote.

“It is my view that in the circumstances of the present case, this can reasonably be said.”

Darcy Merkur, a partner in personal injury law firm Thomson Rogers, says the main takeaway for lawyers from the ruling is that the court will ensure that lawyers who represent personal injury plaintiffs will be paid for their work, “even when a client tries to skirt the system by firing them before a settlement.

“I think it’s a great ruling,” says Merkur.

Patrick Brown, principal partner at McLeish Orlando LLP, says, “Where lawyers work up files and expend both time and money in moving the file forward and building it up to obtain a reasonable resolution, the court, as in this case, will recognize those efforts and ensure that the lawyer is not left high and dry.” 

“To do otherwise would lead to backroom deals so as to avoid the legitimate payment of reasonable legal accounts,” he said in an emailed statement.  

Kate Mazzucco, a partner at Beacon Law LLP, said the case shows the risks that lawyers who work on behalf of plaintiffs in personal injury matters take on.

“Lawyers work for years . . . without being paid for their time throughout. In addition to this, they invest substantial amounts of money into their files in order to advance their client’s case, including the cost of expert fees, medical records and court costs,” she said in an e-mailed comment. She noted that, in “significant cases, these expenses can exceed $100,000.”

“It is welcome that the court in Anjum appropriately recognized these risks and afforded the lawyer protection under the law. Without such protections, a personal injury lawyer’s ability to work on a contingency basis would be limited. This would, in turn, limit the ability of injured persons to access lawyers and, ultimately, justice,” Mazzucco said.

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