Monday, November 3, 2008

Judge Ferguson rips lawyers (& Accountants) over excessive fees

An interesting thread developed on this article. There are some good comments that stood at a total of 81 when this was blogged. I've included mine and some others at the end. MJM

Judge rips lawyers over excessive fees

* Article
* Comments (Comment81)


From Monday's Globe and Mail

November 3, 2008 at 4:29 AM EST

An Ontario judge has blasted the legal profession for running up excessive, unjustified bills that cause the ruination of ordinary people.

Ruling on a long-running matrimonial case, Mr. Justice Donald S. Ferguson of the Ontario Superior Court said it illustrated much of what ails the court system - foolishly litigious clients and gouging lawyers and experts.

"It is now commonplace for counsel to ask for what I consider to be excessive fees when costs are fixed at all stages of litigation," Judge Ferguson said.

"In my view, the courts have an obligation to reject such claims," he said. "To award costs in extravagant amounts will simply encourage counsel and experts to charge excessive fees. This will not only ruin clients, but will also make litigation even more inaccessible to the average litigant."
Related Articles


* ‘Scurrilous' attack on judges thrown out of court
* Ontario review takes aim at disruptive lawyers

The Globe and Mail

The case that prompted Judge Ferguson's outburst involved a Toronto couple - Bibi Khan and Feroze Yakub - who separated in 1998 and reached a consent order in 2000 governing support payments.

The only outstanding issue was whether Mr. Yakub, whose income came through two corporations, had accurately reported his annual income: $72,000. Ms. Khan claimed that he didn't, and embarked on an application to ascertain his true income to change the child support.

After six years of litigation and probing by an accountant, it turned out that Mr. Yakub's income was more like $120,000. He agreed to pay retroactive child support of $50,000 as well as a monthly support increase of $64.

As the loser in the litigation, Mr. Yakub was stuck paying costs of $182,000: $79,016 in legal fees, and $103,098 in disbursements. Almost $100,000 were fees for a single accountant, whose account was so "perfunctory" that it didn't even supply an estimate of the hours he spent on the case, Judge Ferguson observed.

He said that, in total, the costs of litigation so outstripped the results that it would be "unthinkable" for a court to legitimize them.

Judge Ferguson also noted that, had Ms. Khan lost her application and been saddled with her own fees, a woman with an annual income of $57,600 would have been on the hook for three times that amount.

"The astonishing feature of the matter is that the lawyers and expert spent six years running up these costs when the only significant issue was the respondent's income," Judge Ferguson said.

"The file now fills the better part of three file boxes. My overall impression of the whole litigation is that the parties have litigated extravagantly, and the lawyers and expert for the applicant have failed to exercise any professional judgment as to what the litigation was worth."

Judge Ferguson noted that, since the youngest of the couple's four children was nine when the litigation began and is now 15, the usefulness of the enhanced payments has receded considerably.

Even considering the unreasonable attitude Mr. Yakub showed toward the question of his income, Judge Ferguson said, the bill for legal services of $79,000 was excessive. He reduced it to $50,000.

He slashed the accountant's bill even more sharply - from $98,000 to $12,000.

"In my view, counsel and experts have a professional obligation to provide advice to their client, not just on the merits of a claim but also about the potential costs of pursuing it - about what is a reasonable sum to invest in the case, and about what might reasonably be expected to be the outcome on costs," Judge Ferguson said.

You (Mike Murphy, from Sault Ste. Marie, Canada) wrote: Part 1: Accountants get offended when you ask them to itemize their billings. Somehow they believe they are above that. They like to get the retainer then give you a generalized invoice without any details. They, of course, are the first to criticize a company they audit for lack of detail in an invoice. Look no further than those who work in the large national accounting partnerships if you are looking for names.

The Family Court System in many jurisdictions is one of the most profoundly biased and unworkable, particularly for males. The legal profession, despite what the legal beagle above says, wants to ensure clients get as adversarial as possible. The word mediation doesn't come up as often as it should and if one side wants to get revenge then both sides will dig in and only the lawyer wins. He/she will dutifully follow the clients instructions knowing full well they will get a windfall and if children are involved they are the biggest losers. The lawyer takes money from the children's financial legacy and pockets it. How can they live with themselves I always ponder - on the the backs of family destruction.

Another method of family law practice has a group of lawyers not even wanting to take a client if the case goes to court. They know full well it is a no-win for all parties. More of this needs to be implemented along with changes in the law.
* Posted 03/11/08 at 10:14 AM EST | Alert an Editor | Link to Comment
You (Mike Murphy, from Sault Ste. Marie, Canada) wrote: Part 2: Start with getting rid of this no-fault system and then change the divorce act to include a presumption of shared and equal parenting, barring abuse, with allegations of the latter requiring evidence comparable with that required in criminal court.

Guess what? This case would not have even occurred as both parents would be considered equal with no child support being paid by either party, there will be less divorces as the incentives will be far less for litigious females who get custody in 90% of cases, children will have both parents in their lives equally and will be better off.

Isn't that in the best interest of children.l
* Posted 03/11/08 at 10:15 AM EST | Alert an Editor | Link to Comment
Still Learning at 78 from Canada writes: Thank You to the judge with some common sense.
Many lawyers wonder why there is no respect for the them, and MP lawyers top the list.
* Posted 03/11/08 at 10:15 AM EST | Alert an Editor | Link to Comment
Steve Hiscock from United States writes: Warren:

I have no idea how many family lawyers are sued (successfully or not) for malpractice. However, what most people believe is malpractice is generally not malpractice. Malpractice is generally negligence on the part of the lawyer. Losing in court is not negligence. Failing to file important court documents on time because you are lazy, playing golf or drunk is malpractice.

Lawyers get part of their bad rap because in the court system 50% of the parties are ALWAYS going away unhappy. It is much easier to blame your lawyer for your loss but in an adversarial system half the people are going away unhappy...
* Posted 03/11/08 at 10:17 AM EST | Alert an Editor | Link to Comment
Conservative for lower taxes, cheaper gas, less government from Canada writes: It's a shame the judge couldn't suspend these crooks from plying their trade in the peoples courts for at least 5 years.
* Posted 03/11/08 at 10:18 AM EST | Alert an Editor | Link to Comment
John Melnick from High River AB, Canada writes: The last time that I counted. the Calgary phone book had twice as many pages of lawyers as doctors in the yellow pages. True, quite a few of the legal ads are full page spreads with pictures of the senior partners (looking well dressed and well fed). But no other group commands as much implied presence as the legal profession, a profession that feeds off of the rest of society and adds nothing directly to GNP. To put this last statement in context: if there is a national disaster the first people you call on are doctors, construction workers, engineers and plumbers. You get the picture. We have so many lawyers per capita in North America that it is ludicrous.

A good lawyer is worth the top of the pay scale for their profession - no contest. But whether that pay scale should top out at $600 per hour (and more I suspect) in a system which the profession itself has so much control over is what is questionable in my mind.

Politicians, judges, legal societies - all are comprised either largely or totally of lawyers. So they get to set the agenda, vote on laws, judge against those laws and maintain discipline / set renumeration for their members. No other group holds so many levers for its own purposes.
* Posted 03/11/08 at 10:20 AM EST | Alert an Editor | Link to Comment
Mike Toronto from Canada writes: D McAnn wrote: "You make a good point, but it has nothing to do with my original thought----what does the method of reaching a settlement (ie. arbitration or mediation) have to do with the question 'how much does it cost me?' I know we might talk about 'opportunity cost', or contingency fees, but those are different than my original point."

Sorry that I wasn't clearer, I simply meant to state that we are not well-equipped to make many decisions regarding our legal issues because the process has become so convoluted. We may well ask "how much is this going to cost" but we are not in a good position to assess the reasonableness of the estimate nor the reasonableness of proposed changes in circumstance.
* Posted 03/11/08 at 10:20 AM EST | Alert an Editor | Link to Comment
John Melnick from High River AB, Canada writes: And not having had any significant experience with the legal system I wouldn't have a clue how to find a "good" lawyer who would truly and expeditiously represent my interests? References would be a good start but that is such a personal thing it may or may not work out. It could cost thousands before you realize that you made a bad choice.

Posting lawyers' rates, specialties and track records on a web page so that one could judge numerically would be interesting? Any thoughts? After all, that's what allows the guzillionaire athletes to command their salaries - performance.
* Posted 03/11/08 at 10:26 AM EST | Alert an Editor | Link to Comment
Warren Asweater from Canada writes: Steve -

Does negligance include coaching purjury, child alienation or blatant conflict escalation tactics that serve no interest but the lawyers?

If so, does it also include turning a blind eye to evidence of that conduct from opposing counsel?
* Posted 03/11/08 at 10:26 AM EST | Alert an Editor | Link to Comment
non partisan . from Canada writes: Sebastian Flyte:

Its ignorance and sheer arrogance expressed by people such as your self that make me ill.

Clearly you are a lawyer and have no appreciation as to what it is to be a litigant who believes the direction of its counsel only to find out its one big back slapping club. Lawyers take little responsibility for what they 'do' to claims when they come into question; they blame everything on the 'direction given by the client'....what most lawyers, if not all, will fail to admit is they didn't give the client all the information to make a sound judgement therefore negating their fiduciary duty.

Lawyers count on the client NOT to be sound, since they are conflicted hence the need for an advocate-

Come to think of it Sebastian Flyte, I have a question for you. Ever try to hold a lawyer accountable for their actions? Never mind, we already know the answer
* Posted 03/11/08 at 10:28 AM EST | Alert an Editor | Link to Comment
Spouse 2ndClass from Ottawa, Canada writes: I wonder why his income could not have easily been checked by looking at his tax returns. It's doubful he lied to the CRA and if he did the CRA should quick to take action on this.
* Posted 03/11/08 at 10:31 AM EST | Alert an Editor | Link to Comment
al isinwonderland from Canada writes: A tip: For all those who are paying for a lawyer please remember that everytime they answer their cel phone or check their blackberry they are probably billing somebody else while they are bilking/cheating you. When a lawyer is billing you such huge amounts for their time you should insist that they turn their electronic devices off so that you get what you should be paying for at those rates, their undevided attention. Not only will they not be double billing at your expense you would be surprised at how quickly things will get done.
* Posted 03/11/08 at 10:32 AM EST | Alert an Editor | Link to Comment
Warren Asweater from Canada writes: John Melnick -

One idea that may help ... a public log of each lawyer's full history of questionable, tactics, outcomes and significant charactor associations.

It would have to be artful to deal with client-solicitor privilege issues, but no more artful than the provincial bar associations have been in suppressing independent scrutiny of court proceedings.
* Posted 03/11/08 at 10:35 AM EST | Alert an Editor | Link to Comment
Phat Pat from Canada writes: David Latner "I think the judge was hypocritical. He is paid - very well - by the taxpayer. If the lawyers and accountants must take a cut in their pay, perhaps the judge should take a proportionate cut in his. "

Judges earn a good pay but every penny is well deserved by any standard. The responsibilities are tremendous, require a high level of dedication and experience with the law, not to mention very long work hours that consume evenings and weekends poring over cases and arguments. In return, the benefits to society are also commensurate with the pay. A good judge will not err to often, his rulings won't routinely be appealed, and will keep the lawyers in check to ensure we stand a chance of coming close to a fair administration of justice. Judge Ferguson being a case in point. (I am not involved in the legal profession but a close relative is a judge).
* Posted 03/11/08 at 10:37 AM EST | Alert an Editor | Link to Comment
Steve Hiscock from United States writes: Mike:

The onus in criminal court, beyond a reasonable doubt, is not really appropriate for non-criminal contexts. While there are times, especially involving children, where I often think that beyond a reasonable doubt should apply it is far to onerous of a burden to apply.

One of the reasons criminal courts require beyond a reasonable doubt is because a person's liberty is at stake. If society is going to put someone in jail for 5, 10, 20, etc... years we must strive to ensure their guilt is as close to absolute as possible. This is, however, only one of the reasons for beyond a reasonable doubt. The second reason is that in criminal cases the individual is fighting the state. There is an enormous power imbalance in criminal court. The state has the police, crown attorneys and essentially unlimited financial resources. The individual has whatever lawyer represents them. Additionally the state has a prescribed system of evidence gathering in criminal context. There are procedures, chain of custody for evidence, investigators that are trained professionals in preserving evidence and not contaminating it, etc...

Anyway, my point here is that if we used the concept of beyond a reasonable doubt in non-criminal contexts there would be few cases that we could actually resolve. Almost all of the cases would be able to raise reasonable doubt because there is not the same type of physical evidence in family cases (not to mention no chain of custody/etc...) and only the most notorious of cases would meet the burden.
* Posted 03/11/08 at 10:38 AM EST | Alert an Editor | Link to Comment
You (Mike Murphy, from Sault Ste. Marie, Canada) wrote: I mentioned previously the non-court method called Collaborative Law and is the newer method of dealing with family issues. I don't have any experience with it and it is not yet widespread in this country. It sounds like a more humane way to deal with the emotion of family breakup.

A web site is here.

Does anyone have thoughts on whether this method has benefits over the one under discussion.
* Posted 03/11/08 at 10:41 AM EST | Alert an Editor | Link to Comment
The Skipper from Canada writes: Lawyers - what a slimely occupation - right up there with the slime of Bay Street and Wall Street.
* Posted 03/11/08 at 10:48 AM EST | Alert an Editor | Link to Comment
Vote NDP in the next federal/ provincial election. from Toronto, Canada writes: This is something that I can agree with Mr. Justice Donald S. Ferguson. Lawyers charging excessive fees in which I doubt that these lawyers have these high expenses to pay for administering the case.

This is a problem for society as only the wealthy can afford legal services but the low, middle, and fixed income groups can't afford it. So that means the low, middle and fixed income groups who deserve justice and compensation wont get any because of high legal fees hence the wealthy and elite can get away with it. So the wealthy and elite can cause injustice and wont have to fear given that the low, middle and fixed income groups wont be able to take them on.

Lawyer fees should be capped to a maximum. Lawyers already make too much so how high do they want to go. So if these lawyers want more clients then reduce their fees.
* Posted 03/11/08 at 10:49 AM EST | Alert an Editor | Link to Comment
Sebastian Flyte from Canada writes: Has anyone here spent a day in your typical Family Court??

It is a Kafkaesque nightmare of mismatched almost inter-specie gene pools, star-crossed lovers with murder on their minds, surly and indifferent acid-spitting break-obcessed civil service clerks who whom a "file" is usually a random collection of floor sweepings, screaming, squeeling anarchic one-night stand spawn trashing furniture and pilfering Blackberries in black revenge for a random adult's booze-induced surrender to pure lust, overwhelmed judges in cardiac arrest who regularly bury their faces in hands trembling with disgust and frustration, huffing and puffing pot-bellied security guards on the cusp of retirement with Tasers at the ready who couldn't even restrain their bladders, let alone a garbage can-wielding Lothario, in the event of an incident. And last but not least, need I go one about those of us who have to play Oprah to an indigent client of loose morals, and even looser manners, who will go on and on and on and on about the anatomical deficiencies and cerebral shortcomings of The Other, all of this in the midst of the occasional shriek in the crowd of "Whhhhaat? I only made love to her once."

Believe you me, $850 per hour is barely worth it.
* Posted 03/11/08 at 10:50 AM EST | Alert an Editor | Link to Comment
Warren Asweater from Canada writes: Steve - the beyond-a-reasonable-doubt hurdle is a slippery slope issue.

Family courts effectively operate outside of conventional rules of evidence. The more appealing party tends to carry the day, regardless of fuzzy facts.

The lawyers and the judge know in advance whether an aggrieved party has the financial capacity to launch an appeal.

Hence the temptation to abuse the clients.
* Posted 03/11/08 at 10:52 AM EST | Alert an Editor | Link to Comment
Peter Lefaivre from Edmonton, Canada writes: Don't forget the prime directive in the lawyer business.
"To create conflict where no conflict exists". It sure adds up those billable hours!
* Posted 03/11/08 at 10:55 AM EST | Alert an Editor | Link to Comment
Steve Hiscock from United States writes: Warren:

To be honest I am not sure which of those things that are considered malpractice off the top of my head, although they are all ethically questionable.

The most serious is the purjury charge. However if opposing counsel is encouraging a child witness to lie you wouldn't be able to sue for malpractice as malpractice is more appropriately your lawyer doing something that causes you to be hurt (if your lawyer gets a witness to lie, gets caught and ruins your case and you didnt know the lawyer was doing that you could make a case for malpractice) however if you have evidence that opposing counsel encouraged a witness to lie you can file an ethics complaint with your provincial law society and the lawyer could be disbarred.

I'm not sure what you mean by escalation or child alienation. However, I must admit there are areas that are perfectly legal (ie filing a ton of motions to try and make a case so costly for the opposing party that they just give in or risk bankruptcy) that are questionable. However, if you escalate a case with these types of tactics and lose, there is a great risk that the court will hit you with additional costs (although not always and it might be too little to late).

Warren, I'm not trying to defend everything that a lawyer does. Indeed I am certain there are many bad lawyers out there, just like there are bad people in every profession from the cashier who steals $1 of your change when you buy groceries to the politician or CEO who steals millions. I am just trying to show another way to think about the issue.
* Posted 03/11/08 at 10:57 AM EST | Alert an Editor | Link to Comment
Warren Asweater from Canada writes: Sebastion - great drama. Those are legal aid cases.

It's the middle class clients that present you with a financial statement as part of the resolution process, and then discover you've used it to assess how much conflict the client can afford to pay for ... that's where the issue is.
* Posted 03/11/08 at 10:59 AM EST | Alert an Editor | Link to Comment
Warren Asweater from Canada writes: Steve - get some experience and write back sometime!
* Posted 03/11/08 at 11:00 AM EST | Alert an Editor | Link to Comment
You (Mike Murphy, from Sault Ste. Marie, Canada) wrote: Steve:

I understand your logic but in the case of children the accused abuser, almost always male, will lose any chance of custody and a goodly number of the accusations are false. There is no more important job a person will have than that of being a good parent. Nowadays a difference of opinion expressed, in the eyes of the accuser, can be construed as abuse - and this list goes on. We have a highly feminized and conservative system in family court.

If you lose your opportunity to be a parent, through false allegations, it is a "life sentence" of denial to be a parent of the most precious item one will ever have - their children.

A higher threshold than "he said - she said" is required.
* Posted 03/11/08 at 11:07 AM EST | Alert an Editor | Link to Comment
Warren Asweater from Canada writes: Mike - it has to be that way so that you will pay the lawyer to try to prevent that 'life sentence' outcome.

The lawyers and courts throw around a phrase "best interest of the children" which, sadly, is a euphemism for "best interests of the lawyers."
* Posted 03/11/08 at 11:11 AM EST | Alert an Editor | Link to Comment
Steve Hiscock from United States writes: Warren:

I don't agree that it is a slippery slope or if it is, it is in the opposite way. We are conditioned to think that beyond a reasonable doubt is best because it is "beyond a reasonable doubt" but in reality, beyond a reasonable doubt is a legal construct that doesn't really exist in real life.

In real life when we have a dispute the best way to resolve it is to ask both sides to present their argument and then have an impartial arbiter consider the facts and decide which side is correct.

If we moved beyond a reasonable doubt to say family courts, how could it work? Who has to prove something beyond a reasonable doubt and what is the consequences of failing to prove it? For example if we are in a child custody situation what is the baseline? Do we always just say 50/50 joint custody unless one side can prove beyond a reasonable doubt that the other side is abusive or unfit...while that may seem like a tempting way to go that means that no evidence could be adduced in almost all family law cases.

For example, if parent A is alleging parent B is abusive, they probably aren't going to have evidence beyond a reasonable doubt. A could have seen B beat the child 10 times but in court B says A is making it up because they want the child...that is doubt right may not add up to reasonable doubt but it is a start. Family law is going to almost always be he-said, she-said. It's the reason so many sexual abuse cases in criminal court end with unsatisfactory verdicts and it would really make things tough in family court.

Arbitration and mediation is the best way to go by far.
* Posted 03/11/08 at 11:15 AM EST | Alert an Editor | Link to Comment
The Work Farce from Canada writes: Outrageous. No justice no democracy. How can Canadians believe Canada is a democracy when the majority can't get any justice? And a middle class professional must fill up a briefcase with hundred dollar bills like some nefarious villain out of a James Bond movie just to get custody of her 5 year-old daughter. If an average person can't hire a lawyer when his entire life has been swindled away, it's some kind of feudal serfdom. OJ Simpson could buy legal representation but 200 million Americans can't get access to the courts to save their life. Furthermore the myth that the poor can get legal aid whenever they need it is a myth. Only criminals and suspected criminals get legal aid whenever they need it and the entire legal aid fund, shrinking for the last 20 years, is sucked up by high profile criminal cases like the Picton case. The inaccessible classist legal system together with the lawyer-dominated political system, the discriminatory secretive medical system and the punitive employment system makes Canada a medieval fiefdom. While some live like lords in the Space Age many exist like landless peasants in the Dark Ages.
* Posted 03/11/08 at 11:18 AM EST | Alert an Editor | Link to Comment
Sebastian Flyte from Canada writes: "Arbitration and mediation is the best way to go by far."

Ahem, you need a $900 per hour lawyer for that.
* Posted 03/11/08 at 11:19 AM EST | Alert an Editor | Link to Comment
Mr. Coffee from Victoria, Canada writes: Overbilling lawyers. Who saw that one coming? I think SOME lawyers get all excited when they hear ambulance sirens as if it was someone was playing their "song"

This post brought to you by the legal firm Dewey Cheatum & Howe. Been in an accident? Call 1-900-SUE-THEM.
* Posted 03/11/08 at 11:24 AM EST | Alert an Editor | Link to Comment
Warren Asweater from Canada writes: Steve - I agree that arbitration and mediation are best.

My concern is with the conduct of lawyers in conditions that are fertile for conflict and fee escalation.

Isolating vulnerable members of broken families and playing them off against each other for maximum fee generation is the recurring outcome for particular family lawyers.

They opporate with impugnity, tacitly sanctioned by the willful blindness of their peers, like minded counsellors, and family court judges ... Mr. Justice Ferguson excepted!
* Posted 03/11/08 at 11:26 AM EST | Alert an Editor | Link to Comment
Warren Asweater from Canada writes: Steve -

Just an idea, but lie detectors may help to strike the balance in family court cases.

Perhaps they provide an acceptable error rate for situations where liberty is not at stake, by offering a suitable deterent for clients and their crooked lawyers who are otherwise tempted to scam the judge.
* Posted 03/11/08 at 11:31 AM EST | Alert an Editor | Link to Comment
common sense from Ft.mac, Canada writes:

I assume, this judge spent some time as a lawyer first.

Hi pot,this is the kettle calling....
* Posted 03/11/08 at 11:37 AM EST | Alert an Editor | Link to Comment
Zut Alors from Vancouver, Canada writes: As a lawyer, let me say: "AMEN!"
* Posted 03/11/08 at 11:38 AM EST | Alert an Editor | Link to Comment


Paul Fraser said...

Att: RBC Bank President Gordon Nixon - Salary - 11.73 Million!!


I'm a commercial fisherman fighting the Royal Bank of Canada (RBC Bank) over a $100,000 loan mistake. I lost my home, fishing vessel and equipment. Help me fight this corporate bully by closing your RBC account.


There is no monthly interest payment date on the contract.
Date of first installment payment (Principal + interest) is approximately 1 year from the signing of my contract.
Demand loan contracts signed by other fishermen around the same time showed a monthly interest payment date on their contract,(agreement).
The lending policy did change at RBC from one payment (principal + interest) per year for fishing loans to principal paid yearly with interest paid monthly. This lending practice was in place when I approached RBC.
Only problem is the loans officer was a replacement who wasn't familiar with these type of loans. She never informed me verbally or in writing about this new criteria.

Phone or e-mail:
RBC President, Gordon Nixon, Toronto (416)974-6415
RBC Vice President, Sales, Anne Lockie, Toronto (416)974-6821
RBC President, Atlantic Provinces, Greg Grice (902)421-8112
RBC Manager, Cape Breton/Eastern Nova Scotia, Jerry Rankin (902)567-8600
RBC Vice President, Atlantic Provinces, Brian Conway (902)491-4302
RBC Vice President, Halifax Region, Tammy Holland (902)421-8112
RBC Senior Manager, Media & Public Relations, Beja Rodeck (416)974-5506
RBC Ombudsman, Wendy Knight, Toronto, Ontario 1-800-769-2542
Ombudsman for Banking Services & Investments, JoAnne Olafson, Toronto, 1-888-451-4519

"Fighting the Royal Bank of Canada (RBC Bank) one customer at a time"

Anonymous said...

We provide you fence of high quality and latest design from all over the world, there are chain link canada, chain link fence Toronto. You can also rely us in the matter of prices the chain link fence proves to be the best.

The work of Fathers 4 Justice and the Pain of Fathers ~ Activism in the UK

Equal and Shared Parenting ~ The Movie