In this dispute over legal fees (Pihl Law Corp. v. McCall, 2011 BCSC 328) the client hired a lawyer to help resolve a $100,000.00 tax bill with CRA. The client said that the lawyer was introduced to him as a tax expert which he said turned out to not be the case. The client claimed that he was lured into this litigation and then abandoned at the 11th hour when the lawyer got cold feet and withdrew as his lawyer. As a result of the withdrawal, which the client said was without reasonable cause, the client submitted that the contract he had with the lawyer was breached and he seeks return of all of the legal fees he paid.
The court however was of the view that the lawyer terminated the retainer with just cause. The client was communicating a lack of faith in his ability and had stopped payment on cheques and refused to provide a retainer. The court therefore reviewed the accounts to assess the reasonable fee for the services rendered and found:
“[49] It was the solicitor’s [lawyer’s] responsibility to clarify what his skill level was and to ensure that his skill level met the client’s expectation. This was not done.
[50] The solicitor provided necessary and proper services in commencing the appeal, gathering documents, negotiating with counsel for the CRA, and building the case. I find that he billed a reasonable amount for those services, and these services were well within his skill level.
[51] It is also a solicitor’s responsibility to continuously evaluate the strength of the client’s position and to clearly advise him if he thought his chances of success were diminishing. I find that the solicitor did do this with certain arguments presented by the client and Mr. Napper. I appreciate that the analysis changes over time as more facts become evident and more discussion is had with the opposing counsel. Through the solicitor’s efforts, the case was at that point in the early spring of 2009. I do not see any evidence in the spring of 2009 of a focused analysis of the likelihood of success. At that stage, it might have been appropriate to recommend seeking an opinion from a tax lawyer instead of allowing the client and his accountant to continue to craft ingenious arguments.
[52] The focus for the solicitor shifted away from the merits of the case and to collecting his fee. He was very slow in returning calls, and although he did not completely abandon the client, it does not appear that he was evaluating the case either.
[53] I find that the client did not obtain much value in the services after mid-February 2009, and so I am disallowing the accounts dated April 6, 2009, onward. The solicitor should have called the client when the accounts fell behind and had a direct conversation with him to either get their relationship back on tract or terminate it. Ignoring the client’s calls did nothing to advance the file and contributed to the breakdown of the relationship.”
The lesson to be learned from this case for potential clients is make sure you ask your lawyer about his or her expertise before to hire them. Also try to hire a lawyer with experience in the legal field for which you are seeking help. For lawyers, the lesson is to always ensure the client knows if you are specializing in a particular area of law before you take on a case. Also, ensure you are informing the client of the ongoing risks in the case as the evidence changes. Posted by Mr. Renn A. Holness