I have been overcharged for Legal Fees. How do I dispute the Lawyer's Legal Fees?

If you believe that your lawyer’s bill and fees are too high or that the fees charged by your lawyer are unreasonable, in the Greater Toronto Area (GTA) and the Province of Ontario, you may have the ability to dispute the lawyer’s bill under the Solicitor’s Act in a process commonly known as an “assessment”. The Solicitors Act provides a process for clients (and sometimes a third party) to seek review (i.e. assessment) of a lawyer’s fees by an Assessment Officer, even if the legal fees are paid. If successful, the client may have some of the legal fees that they paid refunded.

The relevant sections of the Solicitors Act for assessment of a lawyer’s bill are sections 3 (b), 4 and 11. The Solicitor’s Act is not a complete code, the Court retains an inherent jurisdiction to order a lawyer’s fees to be assessed even if an order is not available as of right under the Solicitors Act. 

Section 3(b) of the Solicitors Act provides for a relatively straightforward and cost efficient way to initiate the process of a client assessment of a lawyer’s fees on requisition, provided that certain pre-conditions are met.  

The pre-conditions are:

1. The Order for Assessment was requisitioned within one month of delivery of the account. So now the questions becomes, When does the clock start ticking for an assessment?
2. The Retainer is not in dispute (a dispute on fees alone is not considered a disputed retainer); and
3. There are no special circumstances. What does special circumstances mean in this context? 

Precondition #1 The Order for Assessment was requisitioned within one month of delivery of the account

A precondition of obtaining an Order for Assessment under section 3 (b)  of the Solicitors Act is that the assessment of the lawyer’s bill was requisitioned within “one month from the date of delivery of a bill”.  What does this mean?  When does the clock start ticking for the purposes of this section? What happens if many bills were delivered during the course of the retainer, with some delivered more than one month ago? 

When does the clock start running for the purpose of section 3(b) of the Solicitor’s Act? 

Generally speaking, the case law establishes that the clock for the purposes of section 3 (b) of the Solicitors Act begins to run after delivery of the final bill from the Lawyer.  In other words, all bills that are rendered in connection with the same matter prior to the final bill are generally considered interim bills. As long  as the Order for Assessment is obtained within one month from the date of the final account is delivered, the Client should be able to proceed with the assessment of their lawyer’s bill (including all prior bills) under section 3(b) of the Solicitor’s Act. 

In certain situations,  lawyers may  argue that all their legal bills were final and, therefore, the client cannot have any legal bills delivered more than one month from the date the Order for Assessment was obtained assessed under section 3(b) of the Solicitors Act.  If this happens, the Assessment Officer may require the parties to seek directions from a Judge.  Karen Zvulony regularly acts for clients who find themselves in this position and are forced to bring a motion or application. If this happens, the Client may argue that all invoices were interim invoices or, in the alternative, there are special circumstances to enable the accounts to be assessed or rely on the Court’s inherent jurisdiction.  

What are the factors that determine if an invoice is interim or final? 

The distinction between interim and final bills is well entrenched in our law.  Over time, litigation has become more complicated and lengthy, and the practice of sending periodic bills makes good commercial sense. The issue is not whether a solicitor can send periodic bills – that is beyond controversy – but whether those bills are interim or final. This is a question of fact. 

One of the leading cases on the issue of interim vs final accounts  is the Ontario Court of Appeal decision in Shapiro, Cohen, Andrews Finlayson v. Enterprise Rent-a-car Co., which held that interim accounts were not final. Labrosse J.A. conducted a thorough review of the applicable case law on the issue of finality of accounts, from which the following principles can be derived:

1. It is a question of fact as to whether prior accounts are, in the circumstances, to be treated as final for the purposes of the limitation period for seeking assessment; 
2. A solicitor has no right to render a final bill until the transaction is completed; 
3. Accounts will not be final when they are rendered in connection with what is essentially one matter and one dispute;
4. When solicitors perform services for a client in relation to the same matter over a long period of time, all of the bills must be considered as interim for the purpose of taxation,
5. The fact that the client paid a bill and did not complain does not convert interim bills into final bills. 

What happens if more than one month has passed since the delivery of my lawyer’s final account? 

Can I still dispute my lawyer’s legal fees and have an Assessment Officer assess my lawyer’s bill? 

The short answer is likely.  However, a motion or application to the Court will be necessary. The simplified procedure available under section 3(b) of the Solicitors Act to obtain an Order for Assessment by requisition is not available for accounts that were delivered more than a month ago.  An Assessment Officer will not have jurisdiction to assess the lawyer’s fees and to proceed by requisition in these circumstances. Often, the Lawyer will not object to the assessment of their accounts and the motion can proceed on a consent or on  an unopposed basis.  

If a motion is brought, for paid accounts, a client will need to show special circumstances. What may constitute “special circumstances” in the context of a request for assessment of a lawyer’s accounts cannot be exhaustively pronounced.  

The Ontario Court of Appeal in Enterprise described the test of special circumstances as follows: “The meaning of the phrase has been interpreted to include any circumstances of an exceptional nature affecting the matter of costs or the liability of a solicitor’s client which a judge, in the exercise of judicial discretion in each particular case, may consider to justify a taxation.  Some factors to consider are the explanation for the delay, length of delay, how long the client waited to bring motion, reasonableness of the fees, size of the accounts and evidence of dissatisfaction. 

For unpaid accounts, the standard a client will need to show to have their lawyer’s bills assessed is less than special circumstances. There is a gap in the legislation regarding unpaid accounts. The Court has relied upon its inherent jurisdiction to order assessments and the test is less rigorous than establishing special circumstances. Little is required for the Court to exercise its jurisdiction in this regard. 

When considering the above, it is important to bear in mind that  the Solicitors Act is a consumer protection legislation in Ontario that should be interpreted in a manner consistent with this.  The pronouncement by the Court of Appeal in the seminal case of Price v. Sonsini is also helpful.  In Price, the Court of Appeal wrote:  “public confidence in the administration of justice which requires the Court to intervene when necessary to protect the clients’ right to a fair and equitable procedure for the assessment of solicitors bills despite procedural gaps or irregularities and the protection of the public in dealing with lawyers”

Precondition #2 – There are no special Circumstances 

Another precondition of obtaining an Order for Assessment under section 3 (b)  of the Solicitors Act is that the assessment of the lawyer’s bill is that there are no “special circumstances”  What does this mean?  What if the accounts are paid? Does payment of the legal fees amount to special circumstances under this section? Generally speaking, if you have paid your lawyers bills, payment will not constitute special circumstances for the purposes of section 3(b) of the Solicitors Act and would not prevent the client from challenging their lawyer’s fees. 

Special Circumstances under this section are “any circumstances of an exceptional nature” that a court ought to consider before an order for assessment is made. For example, in one case, a court found special circumstances where the client sought to assess accounts rendered for a variety of fundamentally different services (some files completed years prior), over an 11 year period and where the bills disclosed different file numbers, all of which the client in this case wished to assess.   

It is worth noting that the threshold for  special circumstances under this section is quite high and will generally only apply to very unique retainers and circumstances.  

Pre-condition #3 – The retainer is not in dispute

The third pre-condition under the Solicitors Act is that the lawyer’s retainer is not in dispute. A dispute regarding fees, ie. how much was billed by the lawyer or if the lawyer’s fees are  too high, are not considered  to be  a “dispute about the retainer” that would remove a client’s right to requisition for an assessment of their lawyer’s bill under section 3 (b) of the Solicitors Act.  Generally, disputes about retainers in this section are rare and usually refer to issues about whether the lawyer was actually retained. 

While the above may seem overwhelming, having a lawyer experienced in assessments under the Solicitor’s Act can ensure that your lawyer’s legal fees are fair and reasonable and that you are not overcharged for legal fees.