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Ending Retainer Issues Canvassed in Superior Court

In the recent case of Konstan v. Berkovits et al  2019 ONSC 3063 (CanLII) , counsel for the Defendants sought to end his retainer with his clients due to a change in his career direction. Although he was not leaving private practice, he had entered into a contractual agreement with one major client to devote himself principally to handling that client’s legal affairs. This precluded him from continuing to work for the Defendants on their complex ongoing litigation.

The Defendants refused to agree to end the solicitor-client relationship and retain new counsel of record and therefore counsel was required to bring a motion to be removed as lawyer of record under Rule 15.04 of the Rules of Civil Procedure.

The Defendants opposed the motion strenuously arguing that counsel “has been intimately involved in their issues for many years and is not just their lawyer, but, as a result of their joint experiences, they have become close friends” and that there is no way to replace counsel’s intimate knowledge of their seven cases.

They relied on Rule 3.7-1 of the Rules of Professional Conduct of the Law Society of Ontario which govern how and when a lawyer should be permitted to be withdraw from representation.  Justice Myers rejected the application of the Rules of Professional Conduct:

 [13] In deciding whether to allow a lawyer to be removed from the record under Rule 15.04, the court is not acting as the Law Society. While the Rules of Ethics may guide or inform the discussion of relevant issues, whether Mr. Shiller is violating the Rules of Ethics is a question for the Law Society itself. The court, by contrast, is concerned with the seven pieces of litigation before it in particular and the administration of justice more generally. I agree with McIsaac J. (Todd Family Holdings Inc. v Gardiner, 2015 ONSC 6590 (CanLII)) that I am also not strictly bound by the terms of the parties’ contractual arrangements. In fact, neither party put a written contract before me. Counsel for Mr. Shiller expressly agreed that whether I grant or refuse the relief sought today has no bearing or effect on any claim for breach of contract or for compensation that the clients may choose to bring. While I briefly considered making it a condition of the order that Mr. Shiller be responsible to pay new counsel’s fees for getting up to speed on the file, it seems to me that I cannot assess his contractual or other legal liability to do so on this motion. Moreover, it would be a mistake to turn routine motions under Rule 15.04 into a form of assessment of breach of contract or breach of fiduciary duty. I am satisfied that whatever rights the clients may have to seek compensation as a result of Mr. Shiller’s acts, if any, are fully preserved to be dealt with in other proceedings that the clients may be advised to bring.

Justice Myers confirmed that the test under Rule 15.04 of the Rules of Civil Procedure is based on an evaluation of the prejudice to the clients and a consideration of the impact upon the administration of justice:

[14]           I agree with Mr. Shiller’s counsel who argues that the court’s principal concern on a motion by counsel to get off the record under Rule 15.04 ought to be directed to ensuring that the clients are able to obtain new counsel without being prejudiced beyond the loss of historical knowledge that is necessarily incidental to a change of counsel. The trial is a long time off. Moreover, as the case management judge I am in a position to oversee the remaining steps toward trial preparation. I am able to ensure that all of the parties’ positions are taken into account.

[15]           I cannot accept that there is no other capable counsel willing to take on these cases at a fair price. I can take judicial notice of the fact that there are approximately 50,000 lawyers licensed by the Law Society of Ontario. It is a competitive and price-sensitive marketplace. Mr. Shiller may be one of few with his precise qualities. But I do not accept (and there is no industry evidence to support an assertion that) there are not many other lawyers available in Toronto and environs with similar professional experience who may offer similar pricing terms.

[16]           I am satisfied that Mr. Shiller’s change in his practice modality presents a proper basis to remove him from the record. There is ample time for the clients to obtain counsel to ensure that they are properly represented in this litigation. It is unfortunate for them that their lawyer is changing his practice. But there are many others who can replace Mr. Shiller – some more expensive and some less expensive; some more experienced and some less experienced. Mr. and Mrs. Berkovits will draw the balance of cost and experience that suits them. There are always cost-benefit balances to be drawn in conducting civil litigation. In the circumstances of these pieces of litigation, I do not find that Mr. Shiller’s removal from the record will cause serious prejudice to the clients or that the prejudice to the clients greatly outweighs the interests of Mr. Shiller in withdrawing. Nor do I view his removal as an affront to the administration of justice.

This case highlights the distinction between the lawyer’s duties to the client under the Rules of Professional Conduct and the duties of the Court to manage cases under the Rules of Civil Procedure. Although the facts of the case are unique, it should also give counsel pause when considering taking on long term and complex matters when career direction is in flux.

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