Case information

Contracts — Contract for legal services — Contingency fees — Review of contingency fee agreements — Proper method for review of contingency fee agreement by court — Appropriate balance between access to justice, freedom of contract, certainty of contractual relations, and maintenance of public confidence in the legal system.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Tallcree First Nation, one of the signatories to Treaty 8, had one of a group of treaty claims stemming from promises made in Treaty 8. Tallcree First Nation’s claim was accepted by the Minister in August 2013 and placed under assessment. The settlement that was ultimately achieved was based on that claim. In October 2014, Tallcree First Nation became dissatisfied with its counsel’s failure to communicate with it about the progress of the claim. It approached Rath & Company, which agreed to take it on a contingency basis. Tallcree First Nation did not receive independent advice about the contents of the contingency fee agreement and made no attempt to negotiate the compensation to be paid before it was signed. The compensation agreement provided that Rath & Company would receive a fee of between 20 and 35 per cent of the settlement amount, depending on when the matter was resolved. Shortly thereafter, the government changed, and the resolution of treaty claims became a governmental priority. Mr. Rath issued a statement of claim on Tallcree First Nation’s behalf in December 2014. He also entered into high level political conversations. In August 2016, Tallcree First Nation’s agricultural claim was accepted for negotiation, and Canada offered to settle for $57.6 million in February 2017. The offer, which was consistent with the offers made to the other signatories of Treaty 8, was accepted and ratified in July 2017. Tallcree First Nation then sought review of the contingency agreement. The Review Officer upheld the contingency fee agreement, which resulted in a $11.5 million fee (20 per cent of the settlement amount).

The chambers judge revoked Review Officer’s decision and substituted a fee of $3 million. The Court of Appeal allowed the appeals, but upheld the Court of Appeal’s $3 million fee.