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Tag: Public Guardian and Trustee

Catastrophically Injured Infant Ordered to Pay Public Trustee $79,000 in legal fees for legal fee review

Reasons for judgement were released this week by the BC Supreme Court, Victoria Registry, discussing the circumstances when BC’s Public Guardian and Trustee can recover legal fees for their involvement in the scrutiny of the settlement of an injury claim involving an infant.
In this week’s case (E.B. v. Basi) the infant plaintiff was catastrophically injured while in foster care during an alleged intentional ”shaken baby” assault.  The incident led to profound lifelong disability requiring a lifetime of care needs.  A $13,000,000 settlement was ultimately reached and judicially approved.   The lawfirm involved sought contingency fess of over $3,000,000.  The Public Trustee, who was required by statute to weigh in on the matter, intervened and submitted that fees of $2,000,o00 were appropriate .  Ultimately the Court approved fees of $2.4 million.
The Public trustee incurred legal fees of over $79,000 in the process of intervening in the fee approval process.  They sought, pursuant to Section 10 of the Infants Act, to recover this from the infant’s lawyers or, in the alternative, from the infant’s estate.  Mr. Jutice Macaulay held that while the Public Trustee’s legal fees were “clearly high” they were ultimately reasonable.
The Court went on to hold that while section 10 of the Infants Act would technically allow for these fees to be payable from the Infants lawyers, absent ‘reprehensible conduct‘ by the lawfirm such an order would be inappropriate   The Court held that the infant’s estate was liable to pay the Public Trustee’s costs.  In finding that the fees should not be levied against the Plaintiff’s counsel the Court provided the following reasons:
[21]         I now turn to whether the Firm can be held partially responsible for this sum. As was noted earlier, indemnification of the PGT is governed by s. 10 of the Infants Act, which allows the court to direct that the PGT’s costs be paid out of either the estate of the infant or by “any other person who is a party to the proceeding.”
[22]         On its face, s. 10 does not appear to contemplate that the infant’s lawyer could be responsible for the PGT’s costs. However, returning to the analysis in Harrington, the Firm is properly characterized as a party in this proceeding. In Harrington, the Court of Appeal awarded special costs against the lawyer on the basis of that determination. The logical conclusion is that I have jurisdiction to make an award of ordinary costs against the Firm, although I am not aware of the court ever making such an award.
[23]         This case differs from Harrington in that there are no grounds here for an award of special costs. The Firm did not engage in reprehensible conduct deserving of rebuke (Garcia v. Crestbrook Forest Industries Ltd. (1994), 119 D.L.R. (4th) 740). In my view, the Firm took a position on time spent that was unreasonable, but I would not characterize it as reprehensible based on the continuum of behaviour discussed in Garcia and other cases. As such, the only remaining possibility is that the Firm be liable for an award of ordinary costs.
[24]         I have already discussed the potential dangers of shoehorning the traditional analysis for an award of costs to the present proceeding. I am not convinced that there is any “successful” party with regard to fee approval.
[25]         The process mandated by the Infants Act is intended to ensure that the amount of the fee is in the infant’s best interests. The PGT, on behalf of the infant, does not take an adversarial role against the infant’s lawyer. The Firm has an obvious self-interest in the outcome but is not opposing the best interests of the infant.
[26]         Absent any basis to award special costs, I decline to award costs against the Firm.

Infant Injury Claims in British Columbia and Conflicts of Interest

When an infant (for the purposes of civil lawsuits anyone under 19 years of age is considered an ‘infant’ in British Columbia) is injured and wants to sue for damages they can’t start a lawsuit on their own.  They must do so through an adult ‘litigation guardian‘.
For obvious reasons, it is common for a parent to fill the role of litigation guardian.  Oftentimes in infant injury claims Defendants argue not only that the child is to blame for the accident but also that the child’s parents are to blame for failing to adequately supervise their children.  If this defence is raised against a parent litigation guardian it can place them in a conflict of interest.  So what can be done in this situation?  Reasons for judgement were released demonstrating one possible outcome to such a fact pattern.
In today’s case (Gill v. Morin) the Plaintiff was “grievously hurt” when his ATV struck or was struck by a car driven by the Defendant.  He started a lawsuit against the motorist with his mother acting as litigation guardian.  The Defendant denied fault and argued that the Plaintiff’s mother was to blame for “failure to adequately supervise (her) son”.
Once placed in this conflict of interest the Plaintiff’s mom applied to the Public Guardian and Trustee (“PGT”) and asked them to take over the lawsuit.  The PGT refused to do so unless they were “insulated from any claim for costs” in the event it turned out to be a losing lawsuit.
The parties turned to the Court for a solution.  The Plaintiff asked the Court to order that the PGT act as litigation guardian.  The PGT opposed this arguing that the lawsuit should simply be put on hold until the infant becomes an adult.  The Defendant opposed the PGT’s position arguing this would result in unfair delay.
The Court ultimately sided with the PGT and held that the lawsuit should be put on hold until the infant’s 19th birthday and from there he could decide whether to carry on with the lawsuit.  Master Keighley provided the following analysis:

[32] It is indeed regrettable that this defendant, who may eventually be found to be blameless with respect to this accident, may be obliged to wait several more years for the issues of liability and perhaps quantum to be resolved, but in the absence of any specific evidence, I am not prepared to find that the defendant is prejudiced by a stay of this action until the plaintiff obtains the age of majority. The limitation for this cause of action will not begin to run against the infant plaintiff until he reaches the age of majority on February 2, 2012 and it seems to be the defendant is no more prejudiced by a stay of proceedings then he would be had the plaintiff waited until then to commence this action.


[33] In the result then, Piar will be removed as litigation guardian forthwith. The third party’s application to appoint the PGT as litigation guardian is dismissed. The action will be stayed until the infant plaintiff reaches the age of majority. Should counsel be unable to resolve the issue of costs, that issue may be brought back before me.

If you are faced with a similar dilemma this case is worth reviewing in full as the Court summarizes a handful of useful precedents disposing of similar applications at paragraphs 16-30 of the reasons for judgement.

BC Injury Claims, Infant Settlements and the Office of the Public Trustee

When an infant (in BC every person below the age of 19 is considered legally an ‘infant’) is involved in a BC Injury claim a settlement generally cannot be reached without the approval of the Office of the Public Guardian and Trustee.  This holds true whether the infants claim is prosecuted by a lawyer or not. Since infants cannot enter into legally binding contracts this protection is necessary both to bring certainty to the settlement process and to protect the interests of the child.
As with any bureaucratic organization, however, there are some limits in the discretionary factors the trustee takes into consideration when approving a proposed settlement.   Reasons for judgement were released today demonstrating this.
In today’s case (Lotocky v. Markle) the Plaintiff suffered a brain injury shortly before his birth.  A lawsuit was brought (through his parents who acted as his litigation guardians) alleging medical negligence against nurses, doctors and the hospital where the infant was born.  After a lengthy trial the case was dismissed by Mr. Justice Macaulay with costs being awarded to the Defendant.
In a very real demonstration of the extraordinary costs losing litigants can pay after a lengthy BC Supreme Court Trial the Defendants claimed over $330,000 in costs from the Plaintiff’s parents. The Plaintiff appealed the dismissal.  Before the appeal was heard the Defendants offered to walk away from their claimed costs if the Plaintiff abandoned the appeal.  This offer appealed to the Plaintiff’s parents given the ‘magnitude of the costs‘ and their prohibitive consequences on their financial future.
The Plaintiff’s parents wished to accept the offer and approached the Public Trustee’s office for permission.   The Public Trustee obtained their own legal opinion which concluded that the appeal had “merit“.  As a result the Trustee refused to consent to the infant abandoning the appeal.  In an unusual development the BC Court of Appeal was asked to intervene and approve the settlement.  They indeed did approve the settlement and provided the following useful reasons:

[66]         It is clear that payment of the trial costs would present a significant additional burden for the Lotocky family, and that this would inevitably affect Michael’s home life and future care.

[67]         Turning to the position of the Public Guardian and Trustee on the issue of costs, it takes no issue with the good intentions of the Lotockys, but says that their potential liability for trial costs creates an inevitable conflict of interest between them and Michael. It maintains that their endorsement of the settlement should therefore play no role in this Court’s examination of whether it is in Michael’s best interests to approve the settlement.

[68]         The Public Guardian and Trustee says that it, by contrast, is able to speak to Michael’s interests with the “purity of independence”. In that guise, it argues that the overarching issue must remain the merits of the appeal, and says it is not in Michael’s interests to abandon it. It maintains that it has acknowledged the parents’ burden of costs by offering to act as litigation guardian on the appeal, and carry the responsibility for the appeal costs. It is adamant, however, that it will not assume the parents’ responsibility for the trial costs.

[69]         While I do not doubt that the Public Guardian and Trustee’s position is well-intentioned, it is, with respect, artificial and misguided to judge the merits of the appeal in isolation from the financial ramifications that would arise from an unsuccessful appeal. This became abundantly clear when the Lotockys raised an argument that the offer of the Public Guardian and Trustee to undertake the appeal amounted to a determination under s. 7(3) of the Public Guardian and Trustee Act, R.S.B.C. 1996, c. 383, and that the Court should compel it to undertake the appeal on the same terms as the parents. Section 7(3) reads:

7(3)      If a litigation guardian is required for a young person under the Court Rules Act and is not otherwise provided for by the Infants Act, the Public Guardian and Trustee must act as litigation guardian for the young person if the Public Guardian and Trustee considers it is in the young person’s best interests to do so.

[70]         The Lotockys argued that they were not prepared to act as Michael’s litigation guardian for the appeal due to their financial circumstances. The Public Guardian and Trustee had nevertheless decided it was in Michael’s best interests that the appeal proceed. Thus a new litigation guardian was required, and under s. 7(3) the Public Guardian and Trustee must step into that role. As a trustee charged with acting in the best interests of the young person, it cannot properly use financial considerations as a reason to abandon its statutory role. It must accordingly take on the appeal by stepping into the same shoes as the former litigation guardian, and assuming her outstanding obligation for trial costs.

[71]         This argument was strenuously resisted by the Public Guardian and Trustee, and it ultimately withdrew its offer to undertake the appeal as litigation guardian and pay appeal costs, on the basis that it had not intended the offer to be an ultimate determination under s. 7(3). While its arguments were couched in terms of statutory construction, administrative policy, and budgetary constraints, I cannot resist the inference that its opposition was fuelled as well by the fact that, if the Court accepted the Lotockys’ argument, it faced significantly heightened financial risks in pursuing the appeal.

[72]         Essentially, it became evident that, if placed in the same position as the Lotockys, the Public Guardian and Trustee would decline to act on the appeal due to the financial risks. It was also apparent that if the Lotockys could have pursued Michael’s appeal on the terms proposed by the Public Guardian and Trustee, they would have had no hesitation in doing so.

[73]         In short, the outstanding obligation for Dr. Markle’s trial costs must play a part in deciding whether the settlement is in Michael’s best interests. While I appreciate the conflict of interest that potential liability creates for the litigation guardian, the financial burden and risks it represents cannot be ignored as the Public Guardian and Trustee advocates. His parents’ financial circumstances have significant repercussions for Michael’s well-being both now and in the future.

[74]         The Lotockys face a potential liability for $205,000 if the appeal is unsuccessful. I earlier indicated that I view the merits of the appeal as arguable at best. I am persuaded that those factors, taken together, make it untenable to proceed with the appeal. I am satisfied that it is in Michael’s best interests to approve the proposed settlement.

This post is not intended to be a criticism of the Public Trustee.  To the contrary the Public Trustee’s office has a difficult and sometimes thankless job which involves making critical decisions in the best interests of injured infants in BC.  However, settlement decisions are often made with the real world cost consequences of Supreme Court litigation in mind.  For this reason the BC Court of Appeal’s comments are most welcome in discussing these risks and requiring their consideration in a ‘best interest of the child’ analysis.