Law Times

June 12, 2017

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Page 2 June 12, 2017 • Law Times NEWS to each other, at issue was the amount that Wilkins owed SLS. The firm owed Wilkins $65,054 from a file it resolved that he had carriage of, and the lawyer agreed that he owed SLS $427,004 for the two settled claims — an accidents benefits claim and a tort claim. But the firm disputed this amount. The agreement held that the firm would be paid 50 per cent of fees from the agreed- upon files, after a referral fee was deducted from the total fees, and the firm claimed the referral fees paid on the claims were unrea- sonable. The files were on the agree- ment's schedule as one of the files Wilkins would take with him, but no referral fee had been identified. Wilkins had settled the acci- dent benefits claim for $288,000 and paid out a referral fee on that claim of 33 per cent of $95,040 to a referring lawyer. SLS argued that this fee was unreasonable as the firm typically paid a 15-per- cent referral fee. On the tort claim, which was settled for $1.1 million, Wilkins paid 33 per cent or $372,240 as a referral fee to a paralegal who worked with Wilkins at SLS and joined him at his new firm. SLS disputed the paralegal's entitle- ment to the referral fee and the reasonableness of the fee that was paid. Wilkins argued that while re- ferral fees were paid out at 15 per cent at his old firm, he could not continue to work there because he was going to lose his referral sources because he could not pay a higher fee rate. New law society rules that have capped referral fees at $25,000 were not yet in place when these fees were paid out. Ontario Superior Court Jus- tice Jasmine Akbarali found that there was nothing in the agree- ment that required Wilkins to pay out the 15-per-cent fee that was typical at SLS, but she agreed with the firm that the money paid to the paralegal was not a proper referral fee but compen- sation. The judge added that the fee in the second claim, there- fore, should not have been de- ducted and that Wilkins, there- fore, owed the firm $572,265. The judge also awarded $21,389 in costs against Wilkins. Thomas Slade, a lawyer with Supreme Advocacy who was recently retained to represent Wilkins in the matter, says that an appeal of the decision has not been filed yet, but he has notified opposing counsel of his inten- tion to do so. Slade says he takes issue with the finding that the money paid to the paralegal was not properly a fee. "Mr. Wilkins paid out a re- ferral fee as promised, but now [he] is being expected to pay that money personally all over again to his former firm," he says. Slade adds that one of the dif- ficulties in this area is that the law society's rules around refer- ral fees recently changed, and that the courts should, therefore, focus on the intentions of the parties when they entered the agreement, as well as its terms. James Srebrolow, a partner at SLS, who represented his firm in the matter, says the firm chal- lenged the referral fee to the paralegal as he was an employee at the time of the referral. "You can't refer something to yourself," he says. Lawyers say it is common to see these types of disputes hap- pen when lawyers leave a firm, but what was unusual in this matter was that it got to litiga- tion — something lawyers say likely could have been avoided. Akbarali echoed that senti- ment, saying the dispute could have been avoided if the two parties had communicated. "It would have been far more preferable for SLS and Mr. Wilkins to communicate with each other about these is- sues earlier," she wrote in the decision. "Each appears to have held back funds owing from the other because they did not trust that the other was paying what each was owed. On this, they were both right. When SLS at- tempted to begin a dialogue, Mr. Wilkins should have en- gaged with the firm on the out- standing issues." Erin Cowling, the principal of Flex Legal, says there are a number of steps lawyers should take to avoid similar disputes, such as making sure to have a clear agreement in writing with the law firm. They should also get in touch with the law society to make sure they understand their responsibilities, she says. "You have to be aware of your professional obligations with the Rules of Professional Conduct and ultimately you're respon- sible to your client as well," says Cowling, who was not involved in the case. Grinhaus says there are les- sons lawyers can take from the decision when considering to leave an employer to start their own firm. "Don't burn your bridges," he says. "Don't take clients if you can avoid it. Take referral sources, because referral sources are not usually locked up by a con- tract." LT a number of times as Islam had requested disclosure of a dash cam video of the officer who issued his ticket and so that Islam could perfect applications. He eventually filed an applica- tion that the proceedings should be delayed under s. 11(b) of the Charter. Mary Paterson, a partner with Osler Hoskin & Harcourt LLP, says the case is an example of the frustration that courts and parties on all sides have with the procedural difficulties of the system. "An $85 ticket requires people to go to court multiple times, de- mand disclosure, get photocop- ies of it. It's a very intense system to deal with what is a small dol- lar figure ticket," she says. Prosecutors argued that Islam, who was self-represented, caused the overwhelming ma- jority of delay that happened in the case, saying his submissions were "inaccurate, imprecise and have no basis in reality." They also claimed that had the trial started on the second scheduled date in February 2016, it would have been well within the 18 months. The total delay was 30 months from the time he was issued the ticket, but Opalinski determined that eight months and 18 days were attributable to Islam as he had failed to perfect applications. This still left a net delay of 21 months, which Opa- linski noted was well beyond the 18-month cap set out in Jordan. Opalinski noted that part of the issue of delay rests with the prosecutors but also the "often irreverent response and caustic and adversarial behaviour" of Islam. "This case should never have taken the time it has taken to get to today's date," she wrote. Islam's case is also notable as Opalinski ruled in an earlier decision that he could serve the government using a web-based electronic faxing service, rather than a traditional fax machine. The Crown unsuccessfully challenged this method of ser- vice. Islam says his case shows there is a lack of communication and clarity for self-represented litigants in the provincial courts and deficiencies in its system. "It's a very old school mental- ity in the sense you have to go file an affidavit, commission it, send in a fax receipt, all that sort of stuff that is very archaic," he says. James Morton, of Morton Barristers, says the decision con- firms that the delay in POA mat- ters starts at the time a ticket is issued. A spokeswoman for the Ministry of the Attorney Gen- eral declined comment and re- ferred questions about the case to the City of Toronto. John Gosgnach, a City of Toronto spokesman, says that city staff are still reviewing the decision and considering whether or not to appeal. 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Ontario (Transportation) • Inclusion of several important judgments from other common law jurisdictions • New material relating to environmental protection and pollution throughout • Examination of important lower court judgments on such topics as: – expert testimony in professional negligence cases – liability of third parties for the wrongs committed by others – vicarious liability disputes – liability for injuries caused by animals New Edition Tort Law, Sixth Edition Lewis N. Klar, Q.C., and Cameron Jefferies Available risk-free for 30 days Order Online: | Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Order # 988018-65203 $305 Hardcover approx. 980 pages May 2017 978-0-7798-8018-8 Shipping and handling are extra. Price(s) subject to change without notice and subject to applicable taxes. © 2017 Thomson Reuters Canada Limited 00244QH-A86400-CM Stay on top of your game with one of tort law's most trusted names

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