Managing the Retainer

Put it in writing
Although it is not yet the standard practice to write detailed retainer letters when accepting a retainer. (Phillis v. Burns, [1997] O.J. No. 3131 (Ont.Ct.Gen.Div.)), it is certainly prudent to do so.

Where there is a conflict between the evidence of a lawyer and that of a client about the terms of a retainer, the client’s version is to be preferred. (Morton v. Harper Grey Easton (1995) B.C.L.R. (3d) 53 (B.C.S.C.)) This is not to say that a solicitor’s version will never be accepted in the absence of a written retainer -- see, for instance, Fasken, Campbell, Godfrey v. Seven-Up Canada Inc. (1997) 142 D.L.R. (4th 456 (Ont.Ct.Gen.Div.) Reducing the parties’ understanding of the retainer’s terms to writing minimizes the possibility for misunderstanding.

A British Columbia solicitor learned this lesson in a painful way. He acted for a developer-vendor in the sale of housing units in a housing co-operative on leased land. The head lease contained an unusual provision allowing for rent revision every twenty-two years based on land value. The plaintiff purchaser was unrepresented; however, the defendant solicitor did charge her a fee for attending to what the solicitor considered his “limited retainer” -- attending to the signing of the documents and registering them. No one told the plaintiff that the solicitor’s retainer was limited in this way. The plaintiff did not receive a prospectus disclosing the unusual features of the land lease, as required by law. Land values in British Columbia escalated rapidly. The plaintiff found herself facing rent increases which she could not afford. She successfully sued the solicitor for failing to explain the lease provisions to her, and failing to ensure that she received a prospectus. Because the limited retainer was not disclosed to her, she reasonably relied on the solicitor to protect her interests in toto. (Begusic v. Clark, Wilson & Co., (1992) 69 B.C.L.R. (2d) 275 (B.C.S.C.)

Set out responsibilities of lawyer, staff and client
A firm of Ontario solicitors acted for a lender on the financing of a lumber mill. It was a condition precedent of the loan that business interruption insurance be in place. The solicitors understood that the lender would be consulting an insurance broker about placing the necessary insurance. After the loan was advanced, the mill burned down. No insurance had ever been placed. The solicitors were held liable for the lender’s loss. Where a solicitor is retained to carry out a contract between his client and another party, he is obliged to see that the precise terms of the contract are carried out, unless he has received instructions to the contrary. Any attempt by a solicitor to limit his or her retainer to a scope less than that required of a reasonably competent solicitor in the circumstances should be done in simple, concise and precise language, reduced to writing. Any ambiguity in such communication, whether it be written or oral, should be resolved against the solicitor. (ABN Amro Bank Canada v. Gowling, Strathy & Henderson, (1995) 20 O.R. (3d) 779 (Ont.Ct.Gen.Div.))