Lawyers must stay on for six-week trial despite relationship breakdown over settlement, says court
The Ontario Superior Court of Justice said a lawyer should stay on for a six-week personal injury trial, despite a “a breakdown in their relationship.”
In the decision, Cengic v. Castro, 2020 ONSC 986, Justice Frederick Myers found that the client’s refusal to follow the lawyer’s settlement advice was not “an irreconcilable breakdown of the relationship between lawyer and client.”
“Lawyers are not free to ‘desert their clients at a critical stage of a matter or at a time when withdrawal would put the client in a position of disadvantage or peril,’” wrote Myers, citing commentary in the Rules of Professional Conduct. “I cannot think of a more critical stage than 19 days before a six-week trial in a complex matter that is a decade old.”
In the case, Preszler Injury Lawyers was set to represent Enes Cengic in the matter of a car accident from nine years ago. Cengic told the lawyers to make a settlement offer at a pre-trial conference. But later that day, the lawyers called Cengic to tell him the “actual amount of money that he would receive if the outstanding offer was accepted,” Myers wrote in the decision. After hearing the real payout, Cengic asked the lawyers to withdraw the offer.
Later, the lawyers advised Cengic to enter into a partial settlement with one set of defendants alone under a Pierringer agreement to force “the hand” of the defendants. The lawyers said Cengic should take the settlement money (“grab it and go,”) even if the other defendant was not forced into settling.
Cengic again refused, upset at the advice from the lawyers.
“He views his claim as a serious one. He is not trying to grab money and go away. Moreover, the basis for Mr. Preszler’s advice to proceed with a partial settlement had been undermined,” wrote Myers. “The offer of a partial settlement had not forced the remaining defendant to the table. On learning that the proposed settlement strategy had failed, Mr. Cengic decided to go to trial.”
The law firm argued that the lawyer’s role is to advise on what is in the client’s best interests.
“If the lawyer believes in earnest that the client’s best interest lies in settlement, the lawyer is duty-bound to say so. If the client rejects the lawyer’s advice, he argues, the trust underlying the relationship is broken,” the decision recounted, citing the law firm’s position.
But, Myers noted, the law firm did not present “any law on the question of whether a lawyer’s advice on settlement is the type of advice that the client is expected to accept.”
“One may argue that the lawyer’s role is to present the issues and make a recommendation. On this basis, the decision of whether to accept a settlement or take the risk of going to trial is a decision for the client alone,” wrote Myers.
“The fact that the lawyers are retained on a contingency fee basis gives the firm an economic interest in the decision. The lawyers’ interest is arguably in conflict with the interest of the client if the lawyers do not believe that the fees to be generated from a trial verdict will justify the investment of further time and effort by the firm. This is a difficult issue of competing duties and ethics.”
Preszler Injury Lawyers told the court that if it was removed as counsel of record, “it is handing to Mr. Cengic’s next counsel an impressive set of expert reports on complex issues on a trial-ready basis.”
But, Myers said that “a further delay of the trial that has already been delayed for a year and is ready to go is prejudicial to and imperils the client.”
“Mr. Cengic submits that he does not understand why his lawyer wants to desert him as he did nothing wrong. He just wants to finally have his case resolved by acceptable settlement or trial,” wrote Myers. “He cannot understand why he is not preparing for trial with Mr. Preszler instead of standing in court facing allegations from him. . . . He does not believe that he will be able to find a lawyer quickly who will take on a case after he has been fired by his long-time lawyer at the last minute.”
Myers dismissed the motion to remove Preszler Injury Lawyers from the record, without costs. Preszler Injury Lawyers declined to comment immediately to Law Times on the decision, citing the ongoing nature of the proceedings.
Myers also noted that the firm should have prepared redacted copies of motion materials and affidavit and presented the full copies to the cort on the hearing of the motion, so they may be returned.
“I am not aware of any basis upon which a lawyer is authorized to release privileged information on a motion to be removed from the record. While this may make proof of the requisite issues more cumbersome, the fundamental importance of privilege requires that it be assiduously protected,” wrote Myers. “Following this process avoids constitutionally sensitive questions of sealing the file or sealing the courtroom.”
Gavin MacKenzie, the author of Lawyers and Ethics: Professional Responsibility and Discipline, says Myers offered a good decision. Plaintiffs lawyers should not take on cases on a contingency basis expecting they will be able to withdraw if it’s not settled before trial, says MacKenzie, who was not involved in the case.
“I think the critical fact here was that the trial was imminent, and that it had been adjourned previously,” says MacKenzie. “You can only contemplate withdrawal if the trial is sufficiently far in the future that the client won't be prejudiced if the client’s required to change counsel. . . . Clients can terminate a lawyer’s retainer for no cause at all. But lawyers don't have that luxury.”