Court says fee reasonableness requires consideration of risks throughout litigation
The Ontario Court of Appeal has upheld a lower court's decision to reduce counsel fees payable under a contingency fee agreement arising from a $12.75-million medical malpractice settlement involving a child who suffered permanent birth injuries.
In D.V. v. Cordocedo, 2026 ONCA 705, the court dismissed trial counsel's challenge to the approved $1.65-million fee. Still, it partly allowed the appellants' request to anonymize names and redact identifying information from the court record.
The child suffered severe birth asphyxia during delivery in 2017, resulting in permanent brain and motor function injuries requiring around-the-clock care. His parents retained counsel to pursue a negligence action against the midwives, their professional corporation, an obstetrician and a hospital. The contingency fee agreement provided for fees of 35 percent if the claim settled before the action was set down for trial and 40 percent thereafter.
The parties reached a provisional settlement in October 2024, three months before a scheduled seven-week trial. The respondent midwives entirely funded the settlement.
Trial counsel voluntarily reduced their contractual fees and proposed approximately $2.5 million, excluding HST, for representing the child. The motion judge approved the settlement but reduced that fee to $1.65 million.
On appeal, counsel argued that the reduction undermined contingency fee agreements and access to justice. An intervener proposed a rebuttable presumption that a contingency fee is reasonable once a court determines that the agreement was fairly entered into.
The appellate court rejected the proposed percentage-based approach and rebuttable presumption, emphasizing that fairness at the outset of an agreement does not automatically establish the reasonableness of the resulting fee.
The court held that judges must assess reasonableness holistically, considering the risks at the beginning of the retainer, developments throughout litigation and the proposed outcome.
It found that the motion judge properly assessed the evolving litigation risks, including the expert evidence concerning liability, causation and damages. The approved fee represented approximately three times counsel's docketed fees.
On confidentiality, the court authorized initialling the appellants' names and redacting addresses, the child's school name, date of birth, and other identifying information.
However, it rejected broader redactions covering medical records, expert evidence, the child's care needs and settlement details, finding them more extensive than necessary to protect his identity while preserving court openness.
The court directed the parties to prepare the initializations and redactions for the motion judge's approval. It otherwise dismissed the appeal and ordered no costs.
