Code of Professional Conduct Chapter 11

A fee will not be fair and reasonable and may subject the lawyer to disciplinary proceedings if it is one that cannot be justified in the light of all pertinent circumstances, including the factors mentioned, or is so disproportionate to the services rendered as to introduce the element of fraud or dishonesty, or undue profit. ²

2. It is in keeping with the best traditions of the legal profession to reduce or waive a fee in cases of hardship or poverty, or where the client or prospective client would otherwise effectively be deprived of legal advice or representation.³

3. Breaches of this Rule and misunderstandings about fees and financial matters bring the legal profession into disrepute and reflect adversely upon the administration of justice. The lawyer should try to avoid controversy with the client over fees and should be ready to explain the basis for charges, especially if the client is unsophisticated or uninformed about the proper basis and measurements for fees. The lawyer should give the client an early and fair estimate of fees and disbursements, pointing out any uncertainties involved, so that the client may be able to make an informed decision. When something unusual or unforeseen occurs that may substantially affect the amount of the fee, the lawyer should forestall misunderstandings or disputes by explaining this to the client.⁴

4. Save where permitted by law, the lawyer should not charge interest on an overdue account except by prior agreement with the client and then only at a reasonable rate.⁵

5. The lawyer who acts for two or more clients in the same matter is under a duty to apportion the fees and disbursements equitably among them in the absence of agreement otherwise.

6. A fee will not be a fair one within the meaning of the Rule if it is divided with another lawyer who is not a partner or associate unless (a) the client consents, either expressly or impliedly, to the employment of the other lawyer and (b) the fee is divided in proportion to the work done and responsibility assumed.⁶

7. The fiduciary relationship that exists between lawyer and client requires full disclosure in all financial matters between them and prohibits the lawyer from accepting any hidden fees. No fee, reward, costs, commission, interest, rebate, agency or forwarding allowance or other compensation whatsoever related to the professional employment may be taken by the lawyer from anyone other than the client without full disclosure to and consent of the client. Where the lawyer's fees are being paid by someone other than the client, such as a legal aid agency, a borrower, or a personal representative, the consent of such other person will be required. So far as disbursements are concerned, only bona fide and specified payments to others may be included. If the lawyer is financially interested in the person to whom the disbursements are made, such as an investigating, brokerage or copying agency, the lawyer shall expressly disclose this fact to the client.⁷

8. Any arrangement whereby the lawyer directly or indirectly shares, splits or divides fees with notaries public, law students, clerks or other non-lawyers who bring or refer business to the lawyer's office is improper and constitutes professional misconduct. It is also improper for the lawyer to give any financial or other reward to such persons for referring business.⁸

9. The lawyer shall not enter into a lease or other arrangement whereby a landlord or other person directly or indirectly shares in the fees or revenues generated by the law practice.⁹

10. Unless prohibited by The Law Society of Saskatchewan, it is not improper for the lawyer to enter into an arrangement with the client for a contingent fee, provided such fee is fair and reasonable and the lawyer adheres to any rules relating to such agreements.¹⁰

NOTES

Cf. CBA-COD 10; CBA 3(8), (9); Que. 3.08.01, .02; 81; B.C. B-5; Alta. 32; N.B. E-1; IBA A-8; ABA DR 2-106. (Return to Rule)
The proper "factors of fairness" have been many times declared by the courts. For a compilation and discussion see, e.g., Re Solicitors (1972), 3 O.R. 433 (Ont. H.C.) per McBride, M. at 436-37: "...I have not set down these factors in any sense in order of importance. In my view most of these eight factors should be considered in every case...time expended is not, in most cases, the overriding factor, nor even the most important. On the other hand, there are comparatively few cases where the time factor can be completely ignored."
As to the utility of consensual local "minimum fees tariffs", see Re Solicitors (1970), 1 O.R. 407 (Ont. H.C.).

"Certainty is a desirable feature of any system of law. But there are certain types of conduct...which cannot be satisfactorily regulated by specific statutory enactment, but are better left to the practice of juries and other tribunals of fact. They depend finally...on proof of the attainment of some degree [followed by a page of illustrations, most related to 'reasonableness'].", per Lord Simon, L.C. in Knuller Ltd. v. D.P.P. (1972), 2 All E.R. 898 at 929-30 (H.L.). (Return to Commentary 1)
See TWA v. The King (1948), 4 D.L.R. 833 at 837 (Ont. H.C.); and cf. CBA 3(9). (Return to Commentary 2)
Cf. CBA 3(10). "The question of compensation for solicitors has long been the anxious concern of the Court, both in the interests of clients and their solicitors...[M]uch legislative and judicial activity was directed to the reform and settlement of procedures for fair and reasonable fees...[In Ontario] there is a procedure for determining in every case where it is invoked, that a solicitor's charges are fair and reasonable.", per Wright, J. in Re Solicitor (1972), 1 O.R. 694 at 697 (Ont. H.C.).
"The object of a bill of costs is to 'secure a mode by which the items of which the total bill is made up should be clearly and distinctly shown, so as to give the client an opportunity of exercising his judgment as to whether the bill was reasonable or not'.", per Riddell, J. A. in Millar v. The King (1922, 67 D.L.R. 119 at 120 (Ont. App. Div.).

In certain provinces local law requires that clients be expressly advised of their right to have any agreement agreeing to fees in advance judicially reviewed: see N.B. E-2; Law Society Act R.S.M. 1970, c. L-100, s. 49; Alberta Supreme Court Rule 616(1)(f). (Return to Commentary 3)
Cf. Solicitors Act, R.S.O. 1980, c. 478, s. 35, re-enacted by 1983, c. 21, s. 1, amended 1984, c. 11, s. 214(5), permitting interest at the rate established for pre-judgment interest from the expiration of one month after delivery of the bill. The rate of interest "shall be shown on the bill delivered", ibid., s. 35(4). (Return to Commentary 4)
Cf. B.C. B-5(b) and Alta. 35 (proscribing "agency fees" in consideration of the "mere introduction" of business). Cf. also ABA DR 2-107(a). The intention is not to interfere with routine agency arrangements for such services as searches or document registration in county towns or provincial capitals, etc. (Return to Commentary 6)
See particularly the Rule and Commentary respecting conflict of interest between lawyer and client for the reasons underlying these proscriptions, and Orkin at pp. 154-55.
The lawyer may not profit from interest on clients' trust monies in the lawyer's hands. In some provinces payment of such interest to Law Foundations and legal aid plans is now authorized.

The general principles and fiduciary duties of the law of agency apply to the lawyer-client relationship, particularly with respect to fidelity, the obligation to account, and against "secret profits". See Fridman, The Law of Agency (3rd ed. 1971) at pp. 30-31, 132-39, and other standard authorities on agency. It would, for example, be improper for a lawyer without express disclosure and consent to take any commission, procuration or other fee or reward from a lender, a stockbroker, a real estate or insurance agent, a trust company, a bailiff or a collection agent in consideration of the introduction by the lawyer of business from which professional work resulted to the lawyer in which the lawyer acted for or the lawyer's fees were paid by the person whose business was so introduced.

As to disbursements: "In any case where there is liability upon the part of the solicitor and there is no dishonesty, the mere fact that the amount has not been paid ought not to prevent recovery. If there should be shown any dishonesty the case would be very different...". per Middleton, J. in Re Solicitor (1920), 47 O.L.R. 522 at 525 (Ont. H.C.). (Return to Commentary 7)
Cf. Ont. 9(7). (Return to Commentary 8)
Ibid. (Return to Commentary 9)
Rule 95 of the Rules of The Law Society of Saskatchewan requires such agreements be in writing with a copy to be delivered to the client and a copy on file with the lawyer.
The term "fair" requires that the manner in which the agreement is created be fair, in the sense that the client fully understands its meaning and no undue advantage has been taken by the lawyer. The term "reasonable" relates to the appropriate quantum of remuneration, in the sense that the amount is justified where it reasonably relates to the service and the risk undertaken at the time of the agreement. See, Speers v. Hagemeister (1975), 52 D.L.R. (3d) 109 (S.C.A.); Nagel v. Stevenson (1979), 1 Sask. R. 221 (C.A.); Gokavi and Gokavi v. Lojek, Jones & Company (1986), 49 Sask. R. 82 (Q.B.). (Return to Commentary 10)