Personal liability of counsel for costs

Attis v. Ontario, 2011 ONCA 675 is an important case dealing with the liability of counsel for costs.  The judge of first instance ordered counsel personally to pay for costs because counsel had not properly advised their clients of their potential exposure to costs.  Simply put, the Court found that:

1)     the parties had not been properly advised of their potential exposure to costs;

2)     uninformed consent or authority to proceed is not consent or authority; and

3)     when a solicitor commences an action without consent or authority from a client, the solicitor should be personally liable for costs.

The Court found this analysis was wrong and held:

[12]         In urging us to find that the motions judge had jurisdiction, the AG submits that the solicitor-client relationship is inherently one of dependency in which counsel has a duty to warn clients so they fully understand potential risks before steps are taken.  When it appears a wrong has been committed, the court’s inherent jurisdiction provides a mechanism by which a remedy may be fashioned.  Indeed, the AG argues, the court on its own motion could have instituted this procedure as a means of controlling its process.  This, they say, goes to the core jurisdiction of a Superior Court.

[13]         With respect to Rule 15.02(4), it is the AG’s position that any consent the plaintiffs might have given the appellants to proceed was not informed and, therefore, they were not “authorized” to commence the proceeding.  Accordingly, pursuant to this Rule, they should be liable to pay the costs of the proceeding.

[14]         Not surprisingly, the appellants have a different view of the issue.  While they appreciate the court’s inherent jurisdiction and the ability to craft procedures and to control its process, there can be no unfettered jurisdiction to correct all wrongs.  There must be a legal right involved.  A defendant has no right to inquire into the legal advice given to the plaintiff by the plaintiff’s lawyer.  That is purely a matter between solicitor and client.  We agree. 

[15]         Rule 15 is designed to terminate proceedings where a named plaintiff has not authorized commencement.  The proceedings here, without question, were commenced with the plaintiffs’ authority.  Even if the plaintiffs did not understand the costs implications of initiating proceedings, that could not invalidate or nullify the authority they conferred upon their counsel to commence the proceedings.  If there is any question concerning the legal advice the plaintiff received before conferring that authority, it is a matter between the solicitor and the clients.  It is for an aggrieved party to take steps and, as it turns out, that is exactly what the plaintiff Attis did.  On July 13, 2009, she commenced proceedings in negligence against John B. J. Legge and Legge & Legge seeking damages of $250,000.