IN THE SUPREME
COURT OF BRITISH COLUMBIA

Date: 20111228

Docket: S136757

Registry: New Westminster

Between:

Belinda March

Client

And:

Stanley T. Cope, Personal Law Corporation

Solicitor

Before: District Registrar Cameron

Oral Reasons for Decision

[1]            
On September 15th,
2011, Stanley T. Cope filed an appointment for the review of the bills that he
had rendered to his former client, Ms. Belinda March.

[2]            
The background of
this matter, stated briefly, is as follows.

[3]            
Ms. March was
a back seat passenger in a vehicle that was hit from the rear by another
vehicle on July 29th, 2007.

[4]            
On August 6th,
2007, Ms. March retained Mr. Cope to act as her solicitor to pursue a
claim for damages arising from the motor vehicle accident. She entered into a
contingency fee agreement, the most pertinent provisions of which as they
relate to the issues that were defined at the outset of this hearing, are 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 Ms. March as they are billed out. Should Ms. March
fail to pay the accounts as rendered within 15 days of its account date, then Ms. March
shall pay interest on such outstanding accounts at a rate of 18 percent per
annum, calculated and compounded monthly, not in advance.

10.       Ms. March
acknowledges that Mr. Cope has invited her to have the terms of this
contract reviewed by another solicitor for the purposes of obtaining
independent legal advice as to the provisions thereof.

[5]            
Mr. Cope gave
evidence and confirmed that at the outset ICBC raised an issue as to whether Ms. March
ought to pursue recourse under the WCB compensation scheme. There was some evidence
that she may have been in the course of her employment at the time of the motor
vehicle accident as she was driving to open the store at which she worked.

[6]            
Mr. Cope
testified that he advised Ms. March to protect her claim fully by ensuring
that she followed the advice of her medical advisors as to treatment.

[7]            
By September of
2007, Ms. March determined not to pursue a WCB claim and Mr. Cope
proceeded with her tort claim arising out of the motor vehicle accident. There
was no detailed or specific discussion about bringing a Part 7 claim although
as matters transpired, Mr. Cope, or another lawyer in his office, did do
what was necessary to protect her cause of action in respect of Part 7 benefits.

[8]            
Mr. Cope
testified that ICBC refused to make any Part 7 payments even for prescriptions
or physiotherapy that were mandated by Ms. March’s physicians. Ms. March
was very keen to regain her pre-accident health and she faithfully followed the
advice of her physicians as to treatment, so said Mr. Cope.

[9]            
With ICBC having
refused to make any Part 7 payments, Ms. March was left to fund the costs
of her treatment herself. She was unable to do so and she asked Mr. Cope
to advance her funds which he agreed to do pursuant to the contingency fee
agreement.

[10]        
From October 2007
through February 2011, Mr. Cope advanced funds to Ms. March 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 Ms. March’s back and shoulder.

[11]        
These advances
were all documented by way of regular interim disbursement accounts rendered by
Mr. Cope to Ms. March that all included the following wording:

This
account actuates the interest provision of our fee contract.

[12]        
In addition to
funding actual treatment, Mr. Cope testified that at the request of Ms. March
on two occasions he provided her with advances of $5,000 on her injury claim. He
said these advances were based on an oral agreement with the client to pay
interest on them on the same terms as provided for in the contingency fee
agreement.

[13]        
Ms. March
also arranged for some funds to be advanced to her by a third party lender
during the course of the retainer with Mr. Cope. This was necessary as she
was not able to resume her employment after the accident and she was having
trouble meeting her expenses. I understand these loans inclusive of interest
totalled approximately $30,000.

[14]        
For reasons that
were not elaborated upon at the hearing, Ms. March discharged Mr. Cope
in early 2011 and retained Mr. Cedrone.

[15]        
Her personal
injury claim settled in approximately September 2011.

[16]        
Ms. March
gave Mr. Cedrone instructions to pay some of the disbursements incurred by
Mr. Cope on her behalf and also to pay his fee account rendered in keeping
with the provision of the contingency fee contract, which reads as follows:

2.         The
parties hereto agree that the fees payable for professional services rendered
shall be

(b)        $450.00
per hour for all services rendered by Mr. Cope and the prevailing hourly
rate charged by Stanley T. Cope Personal Law Corporation for assisting junior
counsel and paralegals where and when the engagement of Mr. Cope is
terminated for any reason prior to settlement or judgment.

[17]        
Mr. Cedrone
holds sufficient funds in trust to pay for any of the remaining disbursements
and charges incurred by Mr. Cope and for any interest to be allowed on
those amounts.

[18]        
Mr. Cedrone’s
primary submission was upon disbursements that were, in his words, not
necessary or properly incurred. He said that Mr. Cope should have more
aggressively sought payment for these expenses being for treatment from ICBC
under Part 7. He says that if he had done that, Ms. March would not have
needed to borrow from Mr. Cope to pay for these ongoing treatments and for
surgery.

[19]        
With respect, I do
not find this argument has any merit.

[20]        
Ms. March
needed the treatments and ICBC was not prepared to make any immediate payments
to her under Part 7.

[21]        
To advance her
personal injury claim effectively, Mr. Cope testified that he required her
to follow her medical advice and when she did so there were costs to be
incurred.

[22]        
Mr. Cope also
testified that Ms. March did not wish to wait 12 to 15 months for some
recommended surgery and asked that he fund the surgery so she could have it
done "privately". He did so and she was able to obtain her surgery
almost immediately in February of 2010 but at a significant cost.

[23]        
There was no
evidence provided by Mr. Cedrone on behalf of Ms. March to challenge Mr. Cope’s
evidence that Ms. March accepted the costs of obtaining the treatments
carried with them the interest obligations agreed to under the contingency fee
agreement. The treatments provided by third parties were clearly authorized by Ms. March.

[24]        
Mr. Cedrone
did not argue that the contingency fee agreement should be set aside as being
unfair or unreasonable but rather that the interest rate provided for in that
agreement as it related to the challenged disbursements should be reduced from
the contractual rate to a much lower figure of 4 percent.

[25]        
I now turn to the
applicable law found in the Legal Profession Act, S.B.C. 1998, c. 9.

[26]        
Section 71(2)(a)
and (b) of the Legal Profession Act reads as follows:

(2)        Subject to subsections (4)
and (5), the registrar must allow fees, charges and disbursements for the
following services:

(a)        those reasonably necessary
and proper to conduct the proceeding or business to which they relate;

(b)        those
authorized by the client or subsequently approved by the client, whether or not
the services were reasonably necessary and proper to conduct the proceeding or
business to which they relate.

[27]        
Section 71(3):

(3)        Subject to subsections (4)
and (5), the registrar may allow fees, charges and disbursements for the
following services, even if unnecessary for the proper conduct of the
proceeding or business to which they relate:

(a)        those reasonably intended
by the lawyer to advance the interests of the client at the time the services
were provided;

(b)        those
requested by the client after being informed by the lawyer that they were
unnecessary and not likely to advance the interests of the client.

[28]        
Section 73(3)(a),
(b) and (c) which read as follows:

(3)        If a registrar gives a
certificate under subsection (2), the registrar must add to the amount
certified an amount of interest calculated

(a)        on the amount the registrar
has allowed the lawyer for fees, charges and disbursements, exclusive of the
costs of the review,

(b)        from the date the lawyer
delivered the bill to the date on which the certificate is given, and

(c)        at
the rate agreed to by the parties at the time the lawyer was retained or, if
there was no agreement, at the same rate the registrar would allow under the Court
Order Interest Act on an order obtained by default.

[29]        
I am satisfied
that the disbursements in question were all necessary and proper for the
conduct of the litigation. They laid the foundation for Mr. Cope to prove
the nature and extent of the injuries sustained by Ms. March. I also find
these disbursements were incurred on the express instructions of the client.

[30]        
Mr. Cedrone
referred me to a decision of Registrar Sainty in Cope v. Dickson, 2002
BCSC 1406. In that case, the learned Registrar set aside a contingency fee
agreement and after doing so limited the solicitor to interest on unpaid
disbursements at the Court Order Interest Act rates.

[31]        
Mr. Cedrone
agreed that that case was not directly applicable here but urged me to reduce
the interest rate because the client was not as well represented as she should
have been by Mr. Cope and if he had been more aggressive in pursuing ICBC
she would have been indemnified for these expenses by ICBC.

[32]        
As I said earlier,
there is no evidence to support that ICBC was prepared to pay these treatment
expenses and Ms. March did not testify or say otherwise. However, I do
find the case helpful and instructive on the question of interest. At paragraph 51,
Registrar Sainty says:

[51]      The
Agreement (which I set aside) provided for interest on outstanding amounts at
the rate of 18% per annum. The disbursement accounts sent to the client during
the retainer noted "This account actuates the interest provision of our
Fee Contract". Where there is an agreement for interest, the registrar
must (per s. 73(3) [of the Legal Profession Act]) add to the amount
certified, interest at the rate provided in the agreement.

[33]        
The learned
Registrar then goes on to say:

What
then, is the registrar to do where the agreement has been set aside?

[34]        
Of course in this
case it was not urged upon me that the agreement be set aside.

[35]        
I must apply
s. 73(3) and accordingly interest is recoverable by Mr. Cope as
claimed in the sum of $11,977.02 in keeping with the terms of the contingency
fee agreement.

[36]        
I do wish to make
some observations respecting the two $5,000 advances. While I have accepted
that Ms. March agreed to pay interest on these sums and was reminded of
her agreement in the periodic billing she received from Mr. Cope, I am not
persuaded that the contingency fee agreement contemplates such advances.

[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.

[39]        
In this case, I am
satisfied that Ms. March did not suffer any detriment from the absence of
clear documentation for these two loans but that may not always be the case. Accordingly,
I will allow Mr. Cope the interest claimed on the two advances in keeping with
his oral agreement with Ms. March.

[40]        
Section 72(1) and
(2) provide for costs on a review as follows:

(1)        Costs
of a review of a lawyer’s bill must be paid by the following:

(a)        the lawyer whose bill is
reviewed, if 1/6 or more of the total amount of the bill is subtracted from it;

(b)        the person charged, if less
than 1/6 of the total amount of the bill is subtracted from it;

(c)        a person who applies for a
review of a bill and then withdraws the application for a review.

(2)        Despite
subsection (1), the registrar has the discretion, in special circumstances, to
order the payment of costs other than as provided in that subsection.

[41]        
While Mr. Cope
has been successful on this review and those of his accounts that have been
challenged have been fully upheld, I am going to exercise my discretion under
s. 72(2) to order that no costs be payable by either party. I have elected
to do so because in my view this assessment may have been avoided if Mr. Cope
had provided regular reminders to Ms. March of the amount of interest
accruing on the outstanding accounts, and if he had documented the agreement to
pay interest on the two advances.

[42]        
I am going to
leave it to both counsel to calculate the amount due and each of them should
endorse the certificate.

[43]        
MR. COPE:  Okay. Then the amount that is
payable would be $43,204.90 as indicated in the black binder at Tab 11.

[44]        
THE COURT:  I take it you agree with that
calculation do you, Mr. Cedrone?

[45]        
MR. CEDRONE: I agree with that.

[46]        
THE COURT:  All right. There are no costs
payable, so that will be the total amount.

“District
Registrar Cameron”

District Registrar Cameron