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.