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Personal Injury Lawyer Entitled to Interest on Loans and Expenses From Former Client


In this personal injury lawyer bill review case (2011 BCSC 1799) the lawyer filed an appointment for the review of the bills that he had rendered to his former client.  The client was a back seat passenger in a vehicle that was hit from the rear by another vehicle and hired the lawyer to pursue a claim for damages arising from the motor vehicle accident. She entered into a contingency fee agreement, the most pertinent provision of which is as follows:

5.   All actual disbursements and costs incurred including an opening file charge of $150.00 and a closing word processing charge of $150.00 in the prosecution of the case shall be paid by [the client] as they are billed out. Should [the client] fail to pay the accounts as rendered within 15 days of its account date, then [the client] shall pay interest on such outstanding accounts at a rate of 18 percent per annum, calculated and compounded monthly, not in advance.

The lawyer gave evidence and confirmed that at the outset the Insurance Corporation of British Columbia, ICBC, raised an issue as to whether the claimant ought to pursue recourse under the WCB compensation scheme.  ICBC refused to make any Part 7 payments even for prescriptions or physiotherapy that were mandated by the claimant’s physicians.   With ICBC having refused to make any Part 7 payments the claimant she asked her laywer to advance her funds which he agreed to do pursuant to the contingency fee agreement.
The personal injury lawyer advanced funds to the claimant to pay for treatment for physiotherapy and massage therapy as well as a work hardening program and, importantly, for surgery to address medical concerns with respect to her back and shoulder. Loans inclusive of interest totalled approximately $30,000.
The client, for reasons unknown, discharged the lawyer and hired another lawyer who went on the settle the case a few months later.
The Court was satisfied that the disbursements in question were all necessary and proper for the conduct of the litigation and found that there is no evidence to support that ICBC was prepared to pay these treatment expenses.
The registrar must also (per s. 73(3) [of the Legal Profession Act]) add  interest at the rate provided in the agreement and accordingly interest was recoverable by the lawyer as claimed in the sum of $11,977.02 in keeping with the terms of the contingency fee agreement.
The Court did make the following observation regarding advancing money to clients in personal injury lawsuits:

[37]  It behooves a solicitor to clearly and carefully document any financial matters between himself and his or her client. If a client is to obtain an advance from a lawyer, he or she should receive a letter from the lawyer setting out the agreement, documenting all of the relevant terms and setting out the reasons for the advance. The client should also be given the opportunity and urged to obtain legal advice before concluding the agreement to borrow money from her lawyer.

[38] This should all be done to guard against the lawyer taking what would be an inappropriate personal interest in the litigation thereby putting at risk his or her obligation to provide the client with objective advice and undivided loyalty.

Posted by personal injury lawyer Mr. Renn A. Holness, B.A. LL.B.

Tags: British Columbia Lawyers, Car Acccident Settlement, Find Lawyers, Free Legal Advice, ICBC Lawyers, Interest on Loans for Personal Injury, Law Firm Personal Injury, Lawyer Vancouver, Legal advice, Settlement

One responsePersonal Injury Lawyer Entitled to Interest on Loans and Expenses From Former Client

  • Interest on Personal Injury Claim Loans Must be Foreseeable | Holness Law Group

    October 20, 2014 4:50am

    [...] pay her living expenses because she was unable to work due to her car accident related injuries.The personal injury lawyer paid interest on loans to benefit the [...]

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"Renn A. Holness is a gifted lawyer and author to over 1000 legal blog articles. Married father of two daughters, son of a neurosurgeon and founder of Holness Law Group."

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