by LAWPRO

LAWPRO defends a wide variety of cases in any given year. In almost 80 per cent of the claims files we handle, there is ultimately no finding of negligence against the lawyer that was the subject of a claim.

Occasionally, our work on a lawyer’s behalf is made easier by having compelling facts on our side. But even where the facts are more balanced, LAWPRO counsel strive to put forward rigorous and well supported defences on the part of our insured − not only to avoid a loss in any particular case, but also in the interest of creating precedents and standards of care that are fair to all lawyers. Here is one of the cases we successfully defended in 2013:

Lawyer not liable for transaction client completed after lawyer’s retainer ended

A lawyer acted for a client with respect to an attempt to sell a property held by a joint venture in which the client was a participant. The sale attempt was unsuccessful; in its wake, the lawyer closed his file.

Unbeknownst to the lawyer, the client entered into a new sale agreement with another party several months later. The lawyer received a telephone call from another lawyer, who simply asked the original lawyer about proper service of notice of sale under the joint venture agreement. The original lawyer gave the requested information. He heard nothing more.

Eventually, the client was sued for failing to properly complete that transaction. He third-partied his original lawyer. Wilton-Siegel, J. summarily dismissed the client’s third party claim against his first lawyer on the basis that there was no retainer and no basis for finding a duty of care.

The court rejected an expert opinion to the contrary. Wilton-Siegel, J. accepted that the telephone call did not constitute a retainer to advise about the new sale agreement. None of the indicia of a solicitor-client relationship were present. No one told the original lawyer that he was retained in respect of the new transaction. The original lawyer did not provide legal advice regarding the sale agreement, nor was he asked to do so. He was not given a copy of the agreement. He did not send either an account or a reporting letter, nor was he asked to do so.

The fact that the original lawyer had acted for the client in the past did not create a solicitor-client relationship in respect of all future dealings with the property. The reality of practice is that clients choose different lawyers for different transactions, even involving the same property.