[FONT=Times New Roman]The high price of justice 0](http://www.torontosun.com/2011/09/23/the-high-price-of-justice#disqus_thread) [/FONT]
[FONT=Times New Roman]Absurdly expensive legal fees turn woman’s court victory into a defeat[/FONT]
Patrizia Giuliani spun out on an icy patch, striking another vehicle on Derry Road in Halton on a snowy April day in 2003.
She suffered significant injuries resulting in chronic pain and functional limitations.
She hired a lawyer to consider a lawsuit.
She then sued the Regional Municipality of Halton, claiming it was negligent in its failure to properly maintain Derry Road.
Prior to trial, it was agreed her damage claim for personal injuries was worth $750,000 but the two sides couldn’t agree on liability, hence a trial took place in February, 2010.
The judge ruled the region was negligent but that Giuliani was 50% at fault, resulting in a judgment of $375,000.
The region has appealed, so it’s likely no part of the judgment will be paid for at least another year.
With the trial out of the way and a significant judgment in hand, Giuliani should have been smiling.
But what happened after the trial might well have left her crying.
As Justice John Murray of the Ontario Superior Court put it, “the plaintiff, a woman of modest means, who suffered serious injuries in a motor vehicle accident causing permanent impairment, is now faced with another burden of unimagined proportions — a second catastrophic event — her legal costs.”
The legal costs claimed, including GST, totalled $558,327 plus an additional $229,984 for litigation expenses.
That’s almost $800,000 in fees and expenses for a $375,000 award!
While the trial was 11 days long and the litigation wasn’t simple, how can any lawyer justify such fees?
Giuliani’s lawyer, Kathy Chittley-Young, attempted to do so based on the amount of time she, an associate lawyer and a law clerk spent on the file, an aggregate of about 1,700 hours.
True, the lawsuit was a bit complex.
But as Justice Murray pointed out, the total time spent on the file would equal the annual billed hours for many lawyers and “if one person worked on this file five days a week, seven hours per day, it would take more than 48 weeks work to reach 1,700 hours.”
The judge, therefore, had no difficulty concluding the number of hours billed was “excessive”.
In addition, Giuliani had signed a retainer agreement that specifically stated: “In the case of a personal injury action, a medical malpractice or a motor vehicle accident, the legal fee will be 35% of the total settlement achieved in the action.”
Therefore, the maximum fee the lawyer ought to have charged was $131,250 plus GST.
As if the huge legal fees weren’t enough of a headache, Giuliani also faces the risk of having to make interest and principal payments on a loan she took out to fund the expenses of the litigation.
In November, 2009 Giuliani borrowed $150,000 from Lexfund Inc.
This loan was high risk — nothing is paid unless there is recovery of a settlement or judgment — with an effective annual interest rate of 51%.
It’s estimated by the time the appeal is heard, the interest charges will likely exceed $180,000.
With interest and principal repayment, Giuliani may owe Lexfund $368,000 by late this year, leading to the absurd result she would have been better off had she lost the lawsuit.
However, the judge tabled the issues relating to the loan agreement for another day, noting it might be unenforceable.
The judge also pointed out this type of loan agreement does nothing to facilitate access to justice or advance the cause of justice and found it “difficult to believe that any lawyer would refer a vulnerable client to such a lender.”
By the time all of her legal troubles relating to the accident are concluded, I wonder if Giuliani will feel she would have been better off had she never stepped foot in a lawyer’s office?