BC Court of Appeal Confirms Solicitor's Liens Can Apply Retroactively
Reasons for judgement were released this week by the BC Court of Appeal discussing the effects of a Solicitor’s Lien under the Legal Profession Act in the context of a personal injury claim prosecuted on a contingency basis.
In this week’s case (FitzGibbon v. Piters) the Plaintiff was injured in a collision. She hired a lawyer to advance her claim for damages. In the course of the claim a breakdown occurred in the relationship and the Plaintiff retained new counsel. The claim eventually settled and the first firm sought payment from the settlement amount by way of solicitor’s lien. No notice of this lien was given, apparently, until after settlement and disbursement of funds. A dispute arose whether a solicitor’s lien could be attached retroactively to the settlement. The Court of Appeal agreed that it could and that a valid lien existed in these circumstances. In doing so BC’s high court provided the following reasons:
30] The nature of the charge arising may be described an “inchoate right”, the crystallization of which requires only the pronouncement of the court [see Re Tots and Teens Sault Ste. Marie Ltd., et al (1975), 65 D.L.R. (3d) 53 (Ont. H.C.J.)]. While the charge exists, by statute, upon the recovery of property as a result of the retained lawyer’s efforts, the charge only becomes enforceable upon declaration by the Court under s. 79(3).
[31] This analysis is consistent with the decision of the Supreme Court of British Columbia in Jenik v. Fearn, (1995) 130 D.L.R. (4th) 695 (B.C.S.C.), and in Chouinard.
[32] The decision of whether to make a declaration upon application is a discretionary one. The judge must be satisfied that it would be “just and proper” to grant the order (see Wilson, King & Co. v. Lyall (Trustees of) (1987), 12 B.C.L.R. (2d) 353 (C.A.), and Cliffs Over Maple Bay Investments Ltd. (Re), 2011 BCCA 346, 21 B.C.L.R. (5th) 297).
[33] It is not an answer to the inchoate nature of the charge to say that the property it applies to has not been identified. In Doyle v. Keats, (1990) 46 B.C.L.R. (2d) 54 (S.C.), the Court said:
It is my opinion that the words “any property” used in s. 79 of the Legal Profession Act are as well of the widest possible character, and include a chose in action. Further, I am of the view that the specific property need not be immediately ascertained. It is generally, but not exclusively, the client’s interest in the property which is subject to the charge: Walker v. Saunders, supra. The ascertaining of the extent of that interest may occur subsequent in time to the creation of the charge.
[34] In my respectful opinion, the argument that a charging order under s. 79 cannot have retrospective effect is not supported either by the language of the statute or by the relevant caselaw.