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Breach of Contract in a Legal Fees Context

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Breach of Contract in a Legal Fees Context 18 • N OVEMBER 29, 2013 THE LAWYERS WEEKLY Focus CIVIL LITIGATION Breach of contract in a legal fees context Morgan grappled with the issue of Hamilton’s retainer and assess its “an absolute and unfettered right whether a lawyer who represents a fees. In response, Heydary Ham- to discharge a lawyer” without client that disputes the fees of his ilton slapped its former client and having to justify or explain its former lawyer can be held liable in its new counsel with a lawsuit, decision. The effect of its claims is the above-referenced torts. The pleading a slew of causes of This begs a question: is to indirectly challenge the deci- court re-affirmed that these torts actions against Schorr, including a retainer agreement sion of the Muhammad Group to Nikolay Chsherbinin are not viable causes of action inducing breach of contract, end its retainer, thereby placing against the succeeding lawyer. interference with economic rela- a species of property both Schorr and the Muhammad In Muhammad, the Muham- tions, and civil extortion. Schorr that deserve special Group in the position of providing nlike other torts, economic mad Group sought legal advice successfully argued a Rule 21 protection? reasons to contradict those Utorts have as their primary from Alfred Schorr with respect motion that the claims against advanced by Heydary Hamilton. function the protection of a plain- to its previous lawyers Heydary him are frivolous and vexatious. Since there is nothing unlawful tiff’s economic interests. They Hamilton PC’s retainer agree- As part of its claim, Heydary Nikolay Chsherbinin about advising a client to assess its include, among others, the torts of ment and fees. Having reviewed Hamilton asserted Schorr influ- Chsherbinin Litigation former lawyer’s fees and to chal- inducing breach of contract and the retainer agreement and other enced the Muhammad Group to lenge the enforceability of its intentional interference with eco- aspects of the relationship, Schorr terminate its retainer. However, it retainer agreement, Justice Mor- nomic relations. In Heydary Ham- advised the Muhammad Group to did not know any particulars of gan noted: “Even if Heydary could gan determined no action rooted ilton PC v. Muhammad [2013] sue and launched an application what transpired. Arguably, this establish that Schorr contributed in either economic tort can suc- O.J. No. 3601, Justice Edward seeking to challenge Heydary factor alone is fatal to its claim for to its having been ‘deprived’ of ceed “in the circumstances inducing breach of contract something (which given the privil- pleaded against Schorr.” against Schorr. Given that this ege is highly unlikely), all it would Heydary Hamilton’s persistence tort is the tort of intention, in have been ‘deprived’ of is the bene- in Muhammad and Hanuka is Butterworths® order to find liability Heydary fits of the retainer.” appealing, because it clarifies the Hamilton must be able to demon- Heydary Hamilton sought to per- law of third party interference in The Essential Guide to Settlement strate that Schorr intended to suade the court that Schorr the context of the legal profession. induce the Muhammad Group to deprived it of an economic interest One cannot help but wonder, had in Canada breach its retainer agreement. it had in the retainer agreement. Heydary Hamilton framed and Benjamin Bathgate, B.A. (Hons), J.D. & Without knowing whether Schorr This begs a question: is a retainer properly pleaded its cause of Brent McPherson, B.A. (Hons.), LL.B. created a reason to procure the agreement a species of property action against Schorr in the tort of termination of the retainer or that deserve special protection? causing loss by unlawful means, it merely pointed out a reason, the In Heydary Hamilton Profes- might have qualified it as the New! element of intention necessary sional Corp. v. Baweja [2010] “novel cause of action,” and con- cannot be made out. O.J. No. 5545, the Ontario Court sequently explored whether Schorr $85 + tax While the court decided that “the of Appeal endorsed the lower used unlawful means when it Approx. 200 Pages | Softcover + CD-ROM questions and advice flowing court’s decision in Manning v. arguably frustrated Heydary December 2013 | ISBN: 9780433472100 between Schorr and his clients Epp [2006] O.J. No. 2904, Hamilton’s economic expectation could not be subject of a tort action which explained that lawyers do to generate more legal fees from by Heydary,” it could be argued that not have ongoing economic inter- the Muhammad Group. This com- The vast majority of civil disputes are settled before going to trial, if it can be demonstrated that a est in a retainer agreement plex tort does not demand the and that means it’s vital for in-house counsel and civil litigators to lawyer’s reason for giving advice to beyond payment of reasonable existence of economic loss, and have a thorough understanding of the settlement process. That is a client intended to procure a fees. Consequently, in Muham- frustration of economic expecta- precisely what this new publication offers. Written by experienced breach of the client’s existing mad, Justice Morgan concluded tions will suffice. litigation practitioners, The Essential Guide to Settlement in Canada retainer agreement, there seems no Schorr could not have deprived provides practical guidance and advice to lawyers in private reason why the lawyer should evade Heydary Hamilton of the benefit Nikolay Chsherbinin is an practice, in-house counsel and other professionals who are regularly prima facie liability under the tort of the retainer agreement because employment lawyer at Chsherbinin involved in managing and resolving legal disputes. Discover how you of inducing breach of contract, sub- neither an ongoing economic Litigation and author of the legal can ensure you achieve final and lasting settlements of your legal ject to a defence of justification. interest nor economic loss existed. textbook “The Law of Inducement disputes. This proposition is weakened by Heydary Hamilton’s approach in Canadian Employment Law”. He the solicitor-client privilege con- amounted to a collateral attack on can be reached at 416-907-2587, or Highlights of This Volume cept. In this regard, Justice Mor- the Muhammad Group’s right to [email protected]. • The settlement process, from preparing for settlement to drafting the settlement documents • The legal framework and practice points for making and responding to offers to settle Errors: Early reporting reduces damages • Partial settlement agreements in multi-party litigation • Class action settlements Continued from page 16 Who owns it? ment-related errors. However, • Settlements in employment law and labour relations cases served by registration on title. It the reality is that many lawyers • Settlements in cases involving construction law and other goes without saying that a lien Another common error we see is who report these errors were not specialized practice areas registered against the wrong the failure to name the correct even aware of the act’s require- • Settlement proceedings in the civil law jurisdiction of Quebec land does not preserve your owner of the property in the ments, underscoring why it’s client’s lien rights. This error claim for lien and statement of dangerous to “dabble” in this • Enforcement of settlement agreements often happens when lawyers claim. This can occur where the practice area. simply copy the description or improvement is made to lease- Lien-related errors can be Order Today! Take advantage of the 30-Day Risk-Free † Examination. Property Identification Number hold premises and the “owner,” repaired and damages signifi- Visit lexisnexis.ca/store or call 1-800-668-6481 from the lien of another supplier for the purposes of the act, is the cantly reduced if the situation is Prepay your order online and shipping & handling is free. or from another instrument on tenant, not the landlord. In other reported early. If you agree to dis- Excludes shipping and handling for rush orders. title. You will need to verify the instances, the error occurs charge or dismiss an action before information provided by the because the contracting developer having the matter properly client and undertake a proper is not the registered owner of the assessed, you may be prejudicing search of title in every lien land. Begin by gathering as much a good lien or claim. retainer. If you cannot conduct a information as you can, including † Pre-payment required for fi rst-time purchasers. Price and other details are subject to change without notice. We pay shipping and handling if payment accompanies proper title search yourself, send contract documents and title to Brendan Bowles is managing partner order. the matter to another lawyer the land. at Glaholt LLP. Martine Morin is LexisNexis and the Knowledge Burst logo are registered trademarks of Reed Elsevier Properties Inc., used under licence. Butterworths is a registered trademark of Reed Elsevier (U.K.) Limited and its affiliated companies. Other who has the necessary expertise At first glance, it’s perhaps not senior claims counsel at LAWPRO. products or services may be trademarks or registered trademarks of their respective companies. © 2013 LexisNexis Canada Inc. All rights reserved. to confirm that the lien is being surprising that 40 per cent of They have worked on numerous registered against title to the negligence actions against litiga- repairs and defences in relation to correct land. tors arise from time manage- construction lien-related errors. .
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