Can a Lawyer’s Duty to his Client Extend Beyond the Scope of his Retainer?

 

In the recent case of Meehan v. Good, the Ontario Court of Appeal dealt with a situation in which a lawyer was retained to represent a client with respect to the assessment of the accounts of the client’s former lawyer.

The former lawyer had represented the client in the settlement of a personal injury action and had rendered an account which the client wished to challenge by way of assessment.

The client entered into a written retainer agreement with the new lawyer that specified that the new lawyer was being retained to conduct the assessment proceeding. Nowhere in the retainer agreement was there any mention of a duty on the new lawyer to advise the client about a possible negligence action against the former lawyer, or any limitations issue in that connection (i.e., any time limit on the bringing of a negligence action against the former lawyer).

In this case, it would appear that the client may have had a valid claim of negligence against the former lawyer but that the claim was not brought in time. The client sued the new lawyer alleging that the new lawyer had been negligent in failing to warn him about the time limit. The new lawyer moved for summary judgment to dismiss the claim on the basis that he owed no duty of care to the client to discuss that point since the scope of his obligations to the client were limited by the wording in the written retainer. The motions judge agreed with the new lawyer and dismissed the claim. The client appealed to the Court of Appeal.

The Court of Appeal noted that the new lawyer had advised the client on a number of occasions to obtain legal advice elsewhere regarding any issue of negligence. The client acknowledged having received that advice.

The motions judge had determined that it would not be necessary to make any findings as to whether or not the new lawyer had, in fact, advised the client about the limitation period in relation to a possible negligence claim.

The Court of Appeal had a different view of the matter. It pointed out that to determine whether a lawyer owes a duty of care to a client, a court has to examine all of the surrounding circumstances defining the relationship between the lawyer and the client including, but not limited to, the scope of a written retainer. Where the client alleges that the lawyer’s duty extends beyond the retainer, the court has to meticulously examine all of the surrounding circumstances including the nature of the instructions, and the sophistication of the client, to determine whether a duty is owed beyond the four corners of the retainer agreement.

In this case, the motions judge did not do this. The motions judge focused narrowly on the written retainer in order to determine that no duty was owed. The motions judge did not take into account the fact that over the course of the retainer, the new lawyer communicated his views about the former lawyer’s competence, the new lawyer advised the client to raise the issue of negligence in the course of the assessment proceeding itself, and the new lawyer specifically suggested that the client obtain advice from other counsel as to a potential negligence claim. In the view of the Court of Appeal, those facts should have been taken into account in the analysis as to whether or not it might be said that the new lawyer also had a duty to point the limitations issue out to the client.

Having failed to consider that issue, the motions judge erred. The Court of Appeal allowed the appeal and ordered that the matter proceed to trial.

Both lawyers and clients often assume, mistakenly, that the scope of the lawyer’s duties and obligations to the client is defined by the strict terms of a written retainer agreement. This case is a useful reminder of the fact that this is not so. It is entirely possible that in the course of a professional relationship, a lawyer may take on responsibilities to his or her client, intentionally or not, that go beyond the strict terms of a written retainer agreement. In such cases, if any such additional duty or responsibility is not fulfilled, the client may well have a right of recovery.

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s