A judge approved a $280,000 City of Toronto municipal negligence settlement, then cut the law firm's fee over advertising
The plaintiff tripped in Toronto property in October 2020. Six years later, his law firm’s fee took a similar fall. As the court approved a $280,000 municipal negligence settlement, it nevertheless cut the law firm’s contingency fee, which is a percentage-based fee charged on the amount recovered. The reason? The firm’s own advertising.
A clear case of municipal negligence
The case of Abbas Sharifzadeh, represented by his Litigation Guardian, Azardokht Nejad, et al. v. The Corporation of the City of Toronto, 2026 ONSC 4325, presented a case of municipal negligence.
Plaintiff Abbas Sharifzadeh was approximately 70 years old when he tripped and fell on October 3, 2020, on a City of Toronto property. His injuries included:
- a nasal fracture
- two broken teeth
- soft tissue injuries to his shoulders, neck, and back
Proving municipal negligence, however, was far from simple. Sharifzadeh had two pre-existing conditions that complicated the damages picture:
- cervical stenosis, a narrowing of the spinal canal in the neck
- cognitive decline, diagnosed as chronic macroangiopathic disease
The court found that much of the post-incident treatment could not be linked directly to the fall. By the time the matter reached the court, his condition had progressed to the point where he was legally classified as a person under disability; meaning he could no longer direct his own legal proceedings. His spouse was then appointed as his litigation guardian and is also a plaintiff in her personal capacity.
What triggered the court’s scrutiny of the settlement
The action was filed in 2021 and settled five years later at a pretrial conference on December 2, 2025, at $280,000 all inclusive.
Under Rule 7.08 of Ontario’s Rules of Civil Procedure (RPC), any settlement involving a person under disability must receive court approval. In municipal negligence cases, this safeguard ensures the settlement truly serves the injured party. That review extends beyond the settlement amount itself, and it also covers the legal fees being charged.
The court received the approval request on April 21, 2026, and wrote to plaintiff’s counsel with concerns days later. In response, Diamond & Diamond Lawyers LLP filed a 422-page Supplementary Motion Record.
The court then applied the two-part test from Henricks-Hunter v. 814888 Ontario Inc. (Phoenix Concert Theatre), 2012 ONCA 496: Was the contingency agreement fair when signed? Was it reasonable at the time of the hearing?
It answered yes to the first question and no to the second.
Why the judge reduced the lawyers’ fee
Diamond & Diamond sought $73,885.27 in fees plus HST, based on a retainer providing for 33% of all amounts recovered. Here is what the court found:
- the firm’s own time records showed docketed fees of $53,177.90, well below the contingency amount sought
- twelve law clerks worked on the file, which the judge said likely increased total time spent rather than reducing it
- many time entries were as small as one-tenth of an hour, which weakened the claim that significant unrecorded time existed
The sharpest part of the ruling came next. Because Diamond & Diamond regularly advertises its personal injury expertise across southern Ontario, it held the firm to a higher standard of efficiency. In the court’s view, that public positioning created an expectation the file did not meet.
The approved fee: $65,000 plus HST. For personal injury lawyers handling municipal negligence files, the ruling serves as a pointed reminder: courts read law firm advertising too.
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