LawPro can breathe a sigh of relief – a recent decision
suggest that clients are unlikely to succeed in certifying class
actions against their former lawyers based on the terms of their
retainer agreements. Just as contracts contain individual issues, retainer
agreements between lawyers and their clients are fundamentally
individual in nature. In Hodge v. Neinstein, Justice Perell
refused to certify a class proceeding challenging a law firm's
contingency fee agreements because of the lack of common issues
(and abundance of individual issues) present when analyzing
multiple retainer agreements.
The plaintiff, Cassie Hodge, retained a lawyer to pursue her
personal injury claims following a motor vehicle accident. Under
their contingency fee agreement, the legal fees would be 25% of the
damages recovered plus partial indemnity costs and disbursements.
The plaintiff settled her tort claim for $150,000, which her lawyer
apportioned $50,000 to costs and $49,000 was used to pay
disbursements. The remaining damages were split between the
plaintiff and her lawyer according to the 25% contingency fee
The Proposed Class Action
The plaintiff sought to certify a proposed class proceeding on
behalf of clients of her lawyer's firm who entered into
contingency fee agreements over a ten year period. The nub of the
plaintiff's complaint was the firm's contingency fee
agreements included costs awards, contrary to the provisions of the
Solicitors Act governing
contingency fees. The plaintiffs sought to have the allegedly
improper costs disgorged and returned to class members on the basis
of an alleged strict liability on lawyers to comply with the
Individual Issues Dominate
Justice Perell dismissed the plaintiff's motion for
certification because the claim lacked common issues and a class
action was not the preferable procedure for resolving the class
member's fundamentally individual complaints. According to
Justice Perell, the only commonality between the proposed class
members was the allegation that they were harmed by the same
villain. Although the alleged harmful conduct was similar in
nature, there was no single harmful action or process linking the
In contrast, the circumstances surrounding each class
member's retainer were unique, even if the retainer agreements
were in a standard form. Some of the individual issues in this case
whether a particular retainer was breached,
the extent of the breach,
the significance of multiple accounts and claims,
the impact of settling claims in stages,
and, assuming Justice Perell correctly rejected the
plaintiff's strict liability theory, whether the fees paid were
fair and reasonable in each case.
Can A Class Action Against A Lawyer Ever Be Certified?
It is not clear whether a class action against former counsel
may be certified in the future. Even if the class members'
claims arise from a single incident or repeated identical
incidents, the common issues may not be sufficient to trump the
unwieldy individual issues facing each class member.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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