Bonus billing by lawyer must be expressly agreed to by client
The bonus to be paid under a hybrid fee agreement must be expressly agreed to between the lawyer and the client. It is not acceptable for a lawyer to charge the client on an hourly rate basis as the claim proceeds and then, without prior warning, claim entitlement to a bonus at the end of the case when there is a better than expected recovery on account of the client’s claim.
In Campney v. Arctic Installations (Victoria) Ltd., 1994 CanLII 1676 (BCCA) the solicitors billed the client hourly for work done up to and through trial. After securing a very good result at trial the solicitors provided the client with another account which included a bonus for success. Southin J.A. posed the question being addressed in that appeal as follows:
Can a solicitor retain his right to have taxation on the footing of an entire contract and a single bill when he has sent the client a series of accounts which, on their face, are conclusive for the services rendered during the time period shown on the account? Can he retain to himself, unbeknownst to the client, a right, if there is a famous victory, to send a bill “To succeeding against all the odds, $65,000.00”.
(Campney v. Arctic Installations (Victoria) Ltd., 1994 CanLII 1676 at para. 50 (BCCA)).
Southin J.A. held that by claiming entitlement to interim payments solicitors waive the right to bill a bonus based on success at the end of the retainer:
In my opinion, solicitors deprive themselves of the benefit of the entire contract principle if they do not inform the client of their claiming the right to charge a bonus while at the same time asserting a right to retain the fees paid through the course of litigation in the event of failure.
There is no right, in the absence of express agreement, to charge for success as if it were a stand alone foundation for remuneration.
(Campney v. Arctic Installations (Victoria) Ltd., 1994 CanLII 1676 at para. 56-57 (BCCA)).
The above confirms that the bonus, if any, to be paid to a lawyer under a hybrid fee agreement must be expressly agreed to between the lawyer and the client, and the lawyer cannot wait until the end of the case and, if the claim is very successful, claim entitlement to additional fees without prior warning to the client.
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