Author Archives: Admin4

http://canlii.ca/t/gmg5b

[1]                    Cassie Hodge seeks to bring a class action against her former lawyer, Gary Neinstein, and his law firm, Neinstein & Associates.  She alleges that the Neinstein firm, while acting under improper contingency fee agreements with her and other clients, took unauthorized fees, failed to obtain court approval when required by law, and charged illegal interest rates on disbursements.

[2]         Ms. Hodge applied to certify her action as a class proceeding.  Her application was dismissed by Perell J. for Reasons dated July 29, 2014.[1]Subsequently, for Reasons dated November 4, 2014,[2] Perell J. ordered Ms. Hodge to pay costs to the respondents in the amount of $328,758.45.

[3]         Ms. Hodge appeals to this Court from the Order dismissing the certification application.  She also seeks leave to appeal the costs Order, and if leave is granted, asks that the costs Order be set aside or reduced.

[105]      When the two alternative procedures are compared, it is clear that the class proceeding provides the class members with the only realistic opportunity of advancing their claims.  The common issues are all threshold questions that need to be answered.  They are not insignificant or mere side-issues, but go to the heart of the dispute between the clients and their former lawyers.  Under the class proceeding, all clients would receive notice of their potential claim.  The preliminary issues with respect to the enforceability of the contingency fee agreements and propriety of some of the other charges would be settled in advance.  Once the common issues were settled, all that would remain would be for the solicitors to establish what would be a reasonable fee in all the circumstances.  This might require individual assessments, but if so, the burden would be on the solicitors to establish the fairness of their fees.  If there is a finding that those solicitors knowingly entered into unenforceable agreements and failed to bring the application for approval required under the Solicitors Act, I find it completely appropriate that the onus should then be on the solicitors to initiate whatever individual assessments are required to obtain their fees.

[106]      Unless this is done by way of a class proceeding, there is a real risk that the vast majority of any improper fees taken by the solicitors will be retained by them, simply because individual clients are unable to initiate proceedings on their own.  It is important to the administration of justice that this should not happen.  This is particularly so given the role of lawyers as the gatekeepers entrusted to protect their clients.

[107]      I am also of the view that judicial economy favours the class proceeding rather than individual applications.  Even assuming only 10% of clients come forward to assert individual claims, that would be an unwieldy number of claims to case manage effectively, particularly with multiple lawyers with different strategies.  The overarching issues of enforceability of the agreements, the effect of s. 28.1(9), and the propriety of many of the billing practices need to be determined uniformly.  There would need to be a system to avoid inconsistent verdicts, which would be difficult with actions being commenced at different times and in different places.  In my view, going forward with one test case, or joinder, or consolidation of multiple claims would all be more cumbersome than adjudicating the common issues first in one proceeding that decides the rights of the whole class.

[108]      Finally, I have considered the importance of behaviour modification.  I find this to be a significant advantage to the class proceeding.  Leaving individuals to pursue their own individual remedies will inevitably mean that even if some individuals are successful, there will be others who simply will not come forward.  If individual clients are left to their own devices to right these wrongs, there will be little financial incentive for lawyers to follow the procedures demanded by the legislation.  There will be no encouragement for lawyers to advise their clients of their rights in the contingency fee agreement as required by the Solicitors Act and Regulations and no incentive for lawyers to bring the appropriate applications for approval before taking their fees.  It would be far too tempting for lawyers to simply take whatever fees they believe they can negotiate with the client, ignoring the legislation, and doing so with impunity unless the clients themselves go elsewhere for advice and take proceedings against their own lawyers after the fact.  The notoriety of the class proceeding will serve as a reminder and a warning to all lawyers in Ontario that the fundamental requirements for contingency fee agreements must be followed and that those who ignore them do so at their peril.

[109]      Taking all of these factors into account, I find the that a class proceeding is the preferable procedure. The motion judge erred in law and erred in principle in failing to so find.

Ontario court authorizes classaction against Toronto personal injury lawyer

 http://business.financialpost.com/legal-post/ontario-court-authorizes-class-action-against-toronto-personal-injury-lawyer

Class action approved against Neinstein and Associates LLP

http://www.lawtimesnews.com/201601045139/inside-story/monday-january-4-2016

http://canlii.ca/t/gmm16

[5]        Mr Neinstein acknowledges imperfect conduct, but argues that his actions were designed to advance the interests of his primary client, Mike, and arose from his sense that (i) Mike’s primary attachment was to his spouse, Bessie, and (ii) Mike’s sisters and mother were pursuing their own self-interest in obtaining control of Mike’s assets rather than protecting Mike’s best interests.  Mr Neinstein argues that he has had a long and distinguished career representing unfortunate accident plaintiffs, and that his mis-steps in this case are isolated incidents in an otherwise exceptional career.

[6]        The Appeal Panel considered these general arguments at the end of its reasons:

We wish to specifically address the assertion that Mr Neinstein’s good work for his client at a reasonable fee should be a significant mitigating factor.  This assertion is troubling.  It is no answer to an allegation of conflict of interest to assert that one client’s interests are being zealously advanced when the other client’s interests are being impaired.  It is no answer to an allegation to a failure to serve a client that another client is being well-served.  Misleading the court and the PGT can never be justified on the basis of zealous client representation.  Indeed, any such suggestion fails to reflect the obligations of counsel to the administration of justice.  As to the breaches of court orders and the attempt to preclude a complaint to the Law Society, these had nothing to do with advancing Mike’s interests.

Lawyers, as professionals, must honour their obligations to all of their clients at the same time as honouring their obligations to the administration of justice and to the Law Society.  It misconceives fundamental obligations to suggest otherwise. (Appeal Panel Decision, paras. 140-141)

I agree.  Mr Neinstein’s conduct here was well outside the range of behaviour that may be explained on the basis of excessive client loyalty.  Mr Neinstein’s seniority at the bar makes his conduct all the more troubling: a lawyer of Mr Neinstein’s experience should know better than to behave so unprofessionally.  And this was no momentary slip or isolated departure from professional standards.  It was a pattern of persistent misconduct that went on for years, and displayed a studied indifference to standards of civility and professional obligation.

[7]        The reasons of the Appeal Panel are thorough, persuasive, and address all the points raised on this appeal.  Certainly its decision is reasonable.  Therefore, for the following reasons, despite Mr Greenspan’s and Ms Lutes’ very able written and oral arguments, the appeal is dismissed.

http://canlii.ca/t/glrpz

[9]         In July 2009, the appellants terminated their relationship with R.N. and they so advised Langdon. In October 2009, the appellants retained A.M. as their new lawyer. Instead of moving immediately to set aside the administrative dismissal, A.M. focussed on R.N., alleging that he had been negligent in his handling of the personal injury action and demanding that R.N. report himself to his professional liability insurer, LawPro.

[25]      It is an understatement to say that the appellants were not well served by their former legal counsel in this case. Their first lawyer, R.N., took on Ms. Chrisjohn’s personal injury claim and did little to advance it. When the personal injury action was dismissed, he did not move promptly to set aside the dismissal. While there is evidence that R.N. suffered from personal problems as early as 2007, as the motion judge observed on the evidence before him, “what influence these problems had on R.N.’s conduct and decisions from 2002 to 2007 is unclear”.  And as Langdon points out, during this time, R.N. managed to settle Ms. Chrisjohn’s long-term disability claim.

[26]      After Ms. Chrisjohn changed counsel, A.M. commenced and pursued the solicitor’s negligence action on her behalf against R.N., and did not take any steps in the personal injury action. Indeed, he did not deliver a notice of change of lawyer in that action until 2013, shortly before his retainer ended. He informed Langdon that the personal injury action was not being pursued. This was, as the motion judge concluded, a “deliberate” and “strategic” decision, and not inadvertent, even if, in retrospect, A.M. should have moved to set aside the administrative dismissal at the same time he pursued the solicitor’s negligence action.

[27]      Ms. Chrisjohn’s intention throughout was to recover damages for the personal injuries she suffered as a result of the 2002 collision. Unfortunately, however, the personal injury action had been dismissed in 2007, and from at least 2010, the respondent considered the dismissal to be final and that the action against it had ended.

http://canlii.ca/t/gf4ns

[25]      All five lawyers are members of the Lerners firm in London.  In the statement of claim the plaintiff claims against these defendants “damages for breach of solicitors undertaking, of confidential email, and defamation.”

[26]      These allegations are primarily directed at Murray, who was retained by the Chrisjohn family after their claim was administratively struck. The only allegations in the statement of claim in any way related to Lerner, Moses, Schenke and Dantzer concern a letter sent to them by the plaintiff which stated in the header “Private and Confidential of the Highest Order -Without Prejudice”, which the Defendants “unlawfully disseminated, disclosed, distributed and copied”. In fact, the letter contained no “without prejudice” information and was instead a disgraceful and insulting rant that any lawyer should be ashamed to put his name to.

[27]      As for the claims against Murray, namely the breach of solicitors undertaking and defamation, neither can stand. The plaintiff’s claim that Murray breached a solicitor’s undertaking to protect the plaintiff’s contingency fee account is not tenable at law. As there has been no settlement or payment to the plaintiff, even if there was an undertaking to protect the plaintiff’s account there would be no fees payable to the plaintiff, and therefore no damages have resulted from the alleged breach of the undertaking.

[28]      The defamation claim is also doomed.  The statement of claim fails to provide even the most basic particulars with respect to this cause of action. The reader is unable to determine what words or statements the plaintiff alleges were defamatory, when they were allegedly made or by whom.

[29]      As all these allegations are patently ridiculous and incapable of proof, their actions will be struck without leave to amend.

[41]       In sum, I conclude that the statement of claim should be struck in its entirety, against all defendants, and without leave to amend.

[42]      This action is utterly unmeritorious and has been a complete waste of time and resources for both the court and numerous defence counsel involved. Before this motion proceeded the plaintiff was invited on several occasions to withdraw or improve his claim, but instead responded primarily with profanity and abuse.

[43]      Further such behaviour is to be strongly discouraged. The plaintiff shall therefore pay costs on a substantial indemnity basis, adjusted by me to reflect reasonable hours, as follows:

http://canlii.ca/t/glcb3

[11]                 At some point the number of inadvertent failures and the lack of any apparent “tickler” or follow-up system may lead to a tipping point.  This case comes very close to that line but I see no reason to punish the Plaintiff, who retained a licenced lawyer, and was entitled to expect proper handling of the file.

[12]                 Here the same insurer was on for accident benefits, as the bike rider had no insurance that would respond.  The insurer conducted surveillance to address accident benefits claims and ultimately settled them for a relatively modest amount.

[13]                 Here the Plaintiff’s lawyer’s firm’s actions were less than appropriate.  They seem to have made a number of errors, failures to diarize and I suspect the possibility of an internal mail system that failed to bring both of the Court notices to Mr. Lam’s attention.  The inadvertence and misplaced assumptions that a defence would be filed ought not to be placed at the feet of the individual Plaintiff.

http://canlii.ca/t/gkx8z

[22]           The premium charged by the Defendant may or may not be justified. The settlement achieved by the Defendant appears to have been advantageous to the Plaintiff, but the parties dispute exactly how advantageous the settlement should have been to warrant a premium on the bill.

[23]           In any case, the obscuring of the premium, combined with the Defendant’s refusal to produce copies of its dockets and its trust and client ledgers, constitutes the kind of special circumstance that section 11addresses. It is one thing to charge a premium for success where this billing is properly disclosed; it is quite another thing to hide the fact that a premium has been charged. It will be for the Assessment Officer to determine whether the Defendant’s bill is or is not too high.

http://canlii.ca/t/gkwmj

[92]                 The evidence against Ms. Jhuti is compelling.  Even on the basis of a paper record, it seems quite clear that she falsely represented to Mr. Sawah the settlement amounts of both the Accident Benefits claim and the tort claim.  Her explanations for her actions are riddled with improbabilities.  However, since this matter must proceed to trial in any event, I will refrain from making any actual finding of fraud against her.  Her culpability will be determined at trial.

http://canlii.ca/t/gjxlk

[6]          The statement of claim was issued on June 27, 2008 and served shortly thereafter.  The action proceeded through the pleadings stage.  Affidavits of documents were exchanged.  Examinations for discovery for both sides were conducted on April 29, 2009.  The plaintiff underwent a defence independent medical examination by an orthopedic surgeon on May 25, 2010.  The action proceeded to an unsuccessful mediation on September 30, 2010.

[7]          This motion is supported by an affidavit from one of the plaintiff’s lawyers whom I will call lawyer D.C..  This affidavit is 83 paragraphs long and has 71 exhibits.  The affidavit describes in great detail the history of the action and the correspondence which the plaintiff’s lawyers sent and received in the course of this action.  Much of this correspondence deals with efforts which the plaintiff’s lawyers made to collect information and documents in support of the plaintiff’s claim.

[8]          Lawyer D.C. says that after the mediation failed he intended to set this action down for trial but that owing to inadvertence, he failed to diarise a deadline for doing so as was his standard diarizing practice at the time.  The action was never set down for trial.

[9]          On September 20, 2010 the court registry issued a status notice in this action.  Lawyer D.C. says that neither her nor his form received a copy of this status notice and therefore were unaware of any pending dismissal of this action.  This is disputed.

[23]      Lawyer D.C. failed to set this action down for trial.  He offers several explanations for this failure.  First, he says that he failed to diarise a deadline for setting this action down for trial.  Secondly, he says that between 2009 and 2012 he had a case load of from 250 to 300 files in addition to numerous other responsibilities at his firm.  It took him some time to realize that this file load and his other firm responsibilities were completely unsustainable.  He eventually requested and got permission to reduce his file load and transfer files to other lawyers.  He does not say just when this happened.  He does say that between January 2011 and September 2013, he overlooked prosecution of this action in favour of other priority issues.  Finally, lawyer D.C. says that he always intended to proceed with the plaintiff’s claim.

[24]      The plaintiff himself has sworn an affidavit in support of this motion.  He states that it has always been his intention to proceed with this action.  He also says that he was in contact with the office of lawyer D.C. from time to time and understood that his action was proceeding in the normal course.  Finally, he says that he has instructed his lawyers to proceed with a motion to set aside the registrar’s dismissal order.

[25]      To repeat myself, I am satisfied that his action was satisfactorily prosecuted until just after the failed mediation of September 30, 2010.  There is no evidence that lawyer D.C. or anyone at his firm ever made a conscious and deliberate decision not to prosecute this action.  There is no evidence that the plaintiff ever instructed his lawyers not to prosecute this action.

[26]      Lawyer D.C. has explained the delay in the prosecution of this action in the limited sense that I now know why this delay occurred.  However the overall delay is so great that the explanation is not fully satisfactory. I therefore conclude that the plaintiff has not fully met the first Reid criterion.

Balancing Exercise

[52]      Finally I must balance the interests of the parties.  If this motion is dismissed and the allegations in the statement of claim are true the plaintiff will suffer prejudice.  Because the registrar dismissed this action with costs, if this motion is dismissed the plaintiff must pay those costs to the defendant.  Since this action is almost ready to be set down for trial those costs would be substantial.  In some cases where the court has dismissed a motion like the present one, the court has said that the plaintiff will not be without a remedy because the plaintiff can sue her or his negligent lawyer.  In other cases the courts have cautioned against speculating as to whether the plaintiff has such a remedy.  At the very least, if the plaintiff’s motion is dismissed and he is left to start a new action, the day he receives compensation will be delayed for several years.

[53]      I must also consider whether the defendant will be prejudiced if this motion is granted.  In that event, I am of the view that the defendant will not be prejudiced because on the evidence before me he can still present his case at trial.

Conclusion

[54]      This motion is therefore granted.  The registrar’s dismissal order of January 6, 2011 is set aside.  The time for the plaintiff to set this action down for trial is extended to 90 days from the final disposition of this motion.  This may seem like a very generous time extension.  However, my experience in other motions has been that even diligent lawyer experience considerable delays in getting formal orders issued and entered by court staff.