Law Times

Page 14 November 26, 2018 • Law Times www.lawtimesnews.com Lawyer challenges rules on settlement approval BY DALE SMITH For Law Times A n Ottawa lawyer is challenging Rule 7.08 in the Ontario Rules of Civil Procedure, which dictates that a judge must approve all settlements includ- ing structures in cases of minors and those with a disability. The lawyer, Joseph Obagi, a partner with Connolly Obagi LLP in Ottawa, is citing that the rule — as interpreted in a recent decision, Dickson v. Kellett, 2018 ONSC 4920 — means that plaintiffs' lawyers are forced to turn over material under liti- gation privilege to defendants, which can include their litiga- tion risk. Lawyers say the recent deci- sion impacts clients with a dis- ability looking to reach struc- tured settlements, because it im- pacts the privacy rights of those clients. Obagi says the Ontario Supe- rior Court of Justice decision in Dickson showed that the usual practice of getting sealing orders to prevent privileged informa- tion being introduced into open court did not meet the Supreme Court of Canada's test for such an order. "If a person under disability wants to retain a lawyer or settle their case, they have to file mate- rials with the court, and there is no procedure in the court right now that automatically seals these documents," says Obagi. The details of the case where the constitutionality of Rule 7.08 is being challenged are under a sealing order. In Dickson, the plaintiff 's lawyer asked for a sealing order and to not serve the defendant, because in the course of trying to get approval for contingency fees and the settlement, solicitor- client and litigation privileged information would have been disclosed. "There may be things in the file that justify the retainer agreement, whatever it is you're proposing — is it a particularly risky file?" says Obagi. "In the process of explaining why, you've got to talk about the risks of the litigation, you've got to talk about the weakness of the litigation and discussions with your client." Some solicitor-client privi- leged information could include a particular reluctance by a cli- ent to want to go to trial, says Obagi. He says that, traditionally, plaintiffs could get the defen- dants to not insist on being served the documents, and de- fendants would generally agree. As well, he says sealing orders were generally granted. However, Obagi says, the problems for plaintiffs' lawyers can arise when a judge doesn't approve of the proposed settle- ment, meaning they have to return to negotiation with the defence after they've disclosed their privileged information to the court as part of the approval process, making settlement ulti- mately more difficult to achieve. "You've given them all the weaknesses of the case and the risks that we face going to trial. It's a real problem on that front," he says. In Dickson, Justice Sylvia Corthorn denied the request, citing the rules of serving the de- fence with an affidavit, and she said that the Supreme Court of Canada's test on sealing orders in Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41 was not met. "Frankly, I think [Corthorn] is right," says Obagi. "It's a big deal about getting these seal- ing orders and it's a high bar. She said we can't just be giving out these sealing orders left and right to protect someone's solic- itor-client privilege." Obagi says this interpretation raises a constitutional question as to whether the government is discriminating against minors and people with disabilities be- cause they are required to go through this process, and they are effectively being forced to disclose solicitor-client privilege and litigation privilege because of Rule 7.08. "Not only are you not provid- ing any protections, you're com- pelling them to disclose their solicitor-client privileges to their opponent," says Obagi. Charles Gluckstein, a partner with Gluckstein Personal Injury Lawyers in Toronto, says sealing orders are often used in partial settlements, because it could af- fect the fairness of the trial for the remaining parties. Gluckstein says that, because counsel is representing a child or a person with a disability, their solicitor-client relationship is subject to court approval, so it's not "purely" solicitor-client privilege as if it were an adult in- volved in a case. He adds that automatically sealing these approvals takes away from the openness and transparency of the court and the ability of the media to scru- tinize the fairness of the system. Gluckstein adds that, on oc- casion, judges will have addi- tional questions as part of the settlement process, delaying settlements in some cases up to a year, but he says he doesn't see any strategic disadvantage for STRUCTURED SETTLEMENTS Your injured client needs more than a settlement. Small structures can do big things. STRUCTURE IT EVERY TIME. 1.800.265.8381 | www.mckellar.com Untitled-1 1 2018-06-04 3:39 PM Joseph Obagi says problems for plaintiffs' lawyers can arise when a judge doesn't approve of the proposed settlement. See Rationale, page 15 If plaintiffs' lawyers are doing it by the book, according to the Solicitors Act, there should be nothing to be afraid of. Kelly Hart

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