Ruling finds charge arose when counsel did work to pursue client’s claim that later settled
In a matter arising from a personal injury proceeding, the British Columbia Court of Appeal ruled that the charge of the client’s former lawyer could still attach to a settlement even if no settlement existed during the termination of the retainer.
In December 2020, the appellant in Yilmaz v. Dhugga, 2026 BCCA 277, signed a contingency fee agreement retaining a law firm.
Under the agreement, the firm would act on the appellant’s behalf in connection with claims arising from an October 2019 accident, and the appellant would pay the firm legal fees, calculated at 30 percent of any recovery on the claims.
The lawyer with carriage of the appellant’s action acted as his solicitor of record from 2020 to February 2025, when the lawyer withdrew from representing the appellant for cause. The firm also withdrew from acting for the appellant.
Three months after the withdrawal, the appellant settled his personal injury claim directly with the Insurance Corporation of British Columbia. His former lawyer filed a solicitor’s lien under s. 79 of BC’s Legal Profession Act, 1998 (LPA). The appellant applied to discharge the lien and disputed its validity.
Last Jan. 28, the Supreme Court of British Columbia dismissed the application. The chambers judge acknowledged that the appellant and his former counsel, who had a contingency agreement for legal work, might disagree on the amount of work performed and the nature of the disbursements.
However, the chambers judge determined that the firm did work for the appellant under the contingency fee agreement and that he did not meet the burden to discharge the lien because there was a chance that additional fees might still be due.
The appellant appealed from the chambers judge’s decision refusing to strike the lien.
Lien not struck
The Court of Appeal for British Columbia dismissed the appeal. The appeal court held that the charge arose when the lawyer did work on the client’s behalf to pursue a claim resulting in some recovery or preservation of property.
The appeal court determined that the case clearly met the conditions of s. 79(1) of the LPA, which did not require the former lawyer to establish a precise causal connection between his work and the recovery of settlement funds.
The appeal court rejected the appellant’s argument that no charge could attach to a settlement if there were no settlement in place at the time of the termination of the retainer.
The appeal court found this argument irreconcilable with FitzGibbon v. Piters, 2012 BCCA 269, which stated that a law firm that withdrew before a subsequent lawyer’s negotiation of the settlement was nevertheless entitled to a lien on that settlement.
The appeal court pointed out that the appellant’s retainer with the firm continued for around five years before the firm’s withdrawal and that the settlement funds arose from the proceeding for which he hired the firm.
Regarding Hosseini v. Oreck Chernoff, 1999 BCCA 386, cited by the appellant, the appeal court said that case did not disentitle the former lawyer, in this context, from an LPA lien on the basis that he withdrew from acting for the client before the settlement of the proceeding for which the client retained him.
The appeal court added that Cliffs Over Maple Bay (Re), 2011 BCCA 346, and Wang v. Jiang, 2020 BCSC 901, also did not independently support the appellant’s position or undermine the chambers judge’s conclusion.
The appeal court noted that the registrar would determine the extent to which the firm’s work contributed to the final settlement.
