Law Times

lAw Times • April 4, 2011 NEWS PAGE 5 Contingencies for non-legal services OK: lawyer Continued from page 1 reluctant to off er those services up on a contingency-fee basis unless there is a promise of some premium for the risk that they're taking," he says. "Th ese kinds of cases will be diffi cult to prosecute because very few fi rms have the resources to put up $1 million in cash for disbursements and carry it for a long period of time." But Juriansz wrote that as class counsel had mitigated their own risk by retaining the fi rm on a Jakibchuk served at firm's reception Continued from page 1 arbitration competition, a moot that attracts contestants from across the country. Following a dinner to cel- ebrate the end of the competi- tion, the Mathews Dinsdale crowd moved on to Cheval for the after-party. Diebel detailed her experi- ence of the night in a lengthy complaint letter to Mathews Dinsdale partner Neil Ornstein dated the day after the party. "As the night wore on, the free booze fl owed," she wrote in the letter attached to Cowling's claim. "I was so very ashamed of being complicit with this night of debauchery." Diebel alleged Cowling and contingency basis, it was appro- priate for them to absorb the extra cost rather than increasing the to- tal fees paid to them. "If the pre- mium allowed to class counsel is predicated on the risk of counsel's fees and disbursements, granting service providers a contingency premium should result in a redis- tribution of the premium rather than an enlargement of the pre- mium," he wrote. In any case, the Class Pro- ceedings Act doesn't contemplate contingency-fee agreements with anyone other than class counsel, said Juriansz, who noted that allowing them in other cases would amount to a "fundamen- tal change to the design of the act." He also dismissed concerns about access to justice. "In the almost 20 years the [act] has been in eff ect, a great number of class actions have proceeded without the court al- lowing premiums to service pro- viders," he wrote. But according to O'Sullivan, 'This has been an extremely difficult and stressful experi- ence for my client to be sued by a partner in the firm,' says Paul Schabas. another lawyer had rubbed up against her and put their arms around her "at any chance they got." "While I like to dance, I don't like being groped," Diebel wrote. Jakibchuk, who helped organize the moot, says in his claim that he saw Cowling dancing closely with an intoxicated law student and alleged he grabbed her breast at one point. He later told Orn- stein about what he had seen and claimed he was assured the mat- ter "would be handled delicately." In his claim, Cowling said the allegations were false and "cal- culated to cause harm" and had quickly circulated throughout the fi rm. When he learned his actions were being questioned, he asked Mathews Dinsdale to undertake an independent investigation. Kelley McKinnon, a partner at Gowling Lafl eur Henderson LLP, delivered a confi dential report on the matter in May 2009 after interviewing all of the parties concerned. Diebel's defence says she resigned a month later, although Cowling claims the fi rm ter- minated her. According to Jakibchuk's claim, he asked to see a copy of the report but was denied. But he says the managing partner assured him he "had nothing to worry about from the con- tents of the report." Ten months later, Jakibchuk did have something to worry about when Cowling's claim was served on him at Mathews Dinsdale's reception. Jakibchuk's claim calls the action a "cal- culated move to intimidate" him and "force him to leave [the fi rm's] employment." Mathews Dinsdale should have provided full indemnifi ca- tion for the defamation suit, Jakibchuk claims, because it arose in his capacity as an employee there. Instead, his claim alleges the fi rm off ered him no support and isolated him, thereby forc- ing him out. Th is month, Cowling agreed to drop the defamation suit along with contribution towards Jakibchuk's legal costs. In a statement to Law Times, Cowling said he was forced to commence the defamation action "in order to address the attacks on my reputation." "In January 2009, serious false allegations were made against me and others at Mathews Dinsdale & Clark by Sarah Diebel and Adrian Jakibchuk and disseminated publicly. I was exonerated but this fact was not made public," he wrote. He also provided a copy of a letter from managing part- ner Richard Baldwin dated Jan. 18, 2011. "Th e partners of Mathews Dinsdale & Clark LLP believe that all of the part- ners present at the 2009 Canadian Labour Arbitration Com- petition, including Mr. David Cowling, conducted them- selves appropriately and acted at all time during the weekend of the competition in an appropriate and professional man- ner," it reads. Cowling said the fi rm agreed to compensate him and paid the costs for him to discontinue the libel action. "I have now resigned from the partnership and look forward to moving on in my new fi rm," he said in his statement. there's no legal prohibition against service providers off ering services on a contingency basis. He notes that issue could form a basis for his clients to apply for leave to appeal the decision. "Since there was never any historical impediment to that, then there was no need to spell it out specifi cally in the act, as there was with lawyers, where there had historically been an impediment to contingency fees," he says. Much of the dispute in the case arose from what Juriansz called the "adversarial void" in motions to approve settlements and class counsel fees. Th ey typically go unopposed because individual members' stakes are too small for them to participate. Th e Court of Appeal has also ruled that class members have no standing to ap- peal an order that approves coun- sel fees. Th at places both counsel and the judge in an awkward po- sition, Juriansz said. "Th e line between a skeptical and confrontational approach may be diffi cult to navigate for a court that bears the full responsi- bility for testing the merits of the position put forward by counsel in order to fulfi l its responsibility to protect members of the class," he wrote. "In a case such as this, the motion judge should give serious consideration to the ap- pointment of amicus curiae or a guardian of the settlement fund on the hearing of counsel's appli- cation for approval of their fees." But Charles Wright, a part- ner in the class actions depart- ment at Siskinds LLP, says he wouldn't like to see adversarial hearings over class counsel fees become the norm. "It would be a step in the wrong direction if, after taking on a case on an entirely contingent basis, fund- ing it, and working on it for a long time, counsel then had to essentially engage in litigation over their fee," he says. Juriansz suggested that ap- pointing independent counsel to advise the representative plaintiff could reduce the awkwardness of the position lawyers can fi nd themselves in on an unopposed motion for fees. Wright says he would consider that when a particularly large fee was at stake or in a complicated case such as this where the value of the settlement was unclear. Usually, there isn't such confusion because the vast majority of class action settlements in Canada are in cash, according to Wright. "When you have that much money at stake, it's not neces- sarily unfair to plaintiff counsel to have some money and time spent on making sure the court gets the fee right and the con- trary voice is heard," he says. Wendy Matheson www.mathesonforbencher.com Torys_LT_Feb28_11.indd 1 www.lawtimesnews.com 2/23/11 9:36:16 AM

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