The fees claimed by the law firm were 'excessive': court
In a recent decision by the Supreme Court of British Columbia, a client successfully challenged the legal fees billed by her former legal representation, Shawn Sidhu Law Corporation, under a review conducted under the Legal Profession Act (LPA).
The dispute in Ferguson v Shawn Sidhu Law Corporation, 2024 BCSC 129 arose from Shental Ferguson's injuries in a motor vehicle accident. The case centred around the review of a bill rendered by Shawn Sidhu Law Corporation for services related to Ferguson's motor vehicle accident claim. The bill in question amounted to $9,540.72, a significant reduction from an earlier bill of $18,995.50 for the same period.
After Ferguson retained Shawn Sidhu Law Corporation, the firm entered into an association agreement with Diamond and Diamon Lawyers, but the client did not execute a new retainer agreement. Ferguson eventually terminated her Contingency Fee Agreement (CFA) with the firm in August 2020, after which she engaged Bisbicis Law Corporation to continue her claim.
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Evidence presented during the review included affidavits and cross-examinations of involved legal professionals alongside disputed document submissions. The court scrutinized the law firm's claim that the billed fees were necessary and proper for the conduct of the proceeding, ultimately finding in favour of the client.
The BC Supreme Court concluded that the fees charged by Shawn Sidhu Law Corporation were excessive. The court notably reduced the contested bill to $2,000, including disbursements and applicable taxes, citing a failure on the part of the law firm to justify the original amount claimed.
Additionally, the court mandated that the law firm cover the costs of the Legal Profession Act review process, as the reduction exceeded one-sixth of the total bill amount. The court also relied on the evidence presented and the principles outlined in the Legal Profession Act, emphasizing the lawyer's burden to prove the necessity and reasonableness of their fees.
The court’s findings were based on a detailed analysis of various factors, including the complexity of the issues involved, the amount of time reasonably spent on the case, the lawyer's skill and responsibility, and the outcome.
Ultimately, the court found that Shawn Sidhu Law Corporation's handling of Ferguson's file involved basic, standard procedures that did not require specialized legal skills, especially during the initial stages.
The court wrote in its decision, “The law firm is a personal injury firm; files like the client’s file are their bread and butter.”
Despite Shawn Sidhu Law Corporation's involvement in the case, the court determined that Diamond and Diamond Lawyers and staff conducted more substantial work after the file was transferred to them nine months after the CFA between the client and Shawn Sidhu Law Corporation.
The court concluded that the fees claimed by Shawn Sidhu Law Corporation in the bill were excessive and not justified by the work performed, as the firm failed to prove that all billed time was essential and properly allocated to Ferguson's file. The court significantly reduced the legal fees to $2,000, covering all disbursements and applicable taxes.