Kitching v Devlin, 2016 ABQB 212

Court of Queen ’ s Bench of Alberta Citation: Kitching v Devlin, 2016 ABQB 212 Date: 20160414 Docket: 1201 02758 Registry: Calgary Between: Douglas Kitching Plaintiff - and - Brian Elmer Devlin Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice P.R. Jeffrey _______________________________________________________ I Introduction [ 1 ] The Plaintiff, Mr. Douglas Kitching, was involved in a two-vehicle accident at an intersection in northeast Calgary, Alberta (the “ Accident ”). He retained the Defendant, Mr.

Brian Devlin, QC, as his lawyer to get him fair compensation for the damage he suffered. The claim settled during a judicial dispute resolution conference (“ JDR ”) for $350,000, all inclusive (the “ Settlement ”). [ 2 ] Mr. Kitching claims Mr. Devlin negligently handled his personal injury claim. He alleges that Mr. Devlin failed to obtain the necessary information to properly advise him regarding the Settlement, resulting in Mr. Kitching making an uninformed decision to accept an improvident settlement. He says the personal injury lawsuit was worth $1,847,500 to $2,663,000 and claims against Mr.

Devlin for the difference of $1,497,500 to $2,313,000.

[ 3 ] Mr. Devlin denies any professional negligence on his part, says that the Settlement was fair and reasonable, and says that Mr. Kitching simply became unhappy with the compensation after the fact and is now seeking more money. [ 4 ] For the reasons that follow I dismiss Mr. Kitching’s claim. If negligence had been proven, Mr. Kitching would have been entitled to an award of damages against Mr. Devlin in the amount of $98,194. My reasons are organized as follows, at the indicated paragraph numbers: I. Introduction [1] II. Features of a Trial for Professional Negligence by a Lawyer [5] III. Facts [7] A.

The Parties [7] B. The Accident [11] C. Post-Accident Lifestyle [15] D. Medical Treatment [21] E. Retaining Mr. Devlin [30] F. The Road to the JDR [55] G. The JDR [69] H. Post-JDR Events [104] I. Factual Findings Concerning the JDR [114] IV. Principles of Lawyers’ Professional Responsibilities [122] A. Lawyer-Client Relationship [122] B. Standard of Care Expected under the Retainer [126] C. Codes of Professional Conduct [129] V. Expert Opinion Evidence [130] A. Impartiality, Independence and Freedom from Bias [138] B. Evidence Given Beyond the Qualification [155] C. The Use of Discovery Transcripts [167] VI.

Conduct of Mr. Devlin [177] A. Contributory Negligence [180] B. Missing Information [192] C. Reasonableness of the Settlement Offer [225] D. Rebuttal Medical Evidence [250] E. Undue Pressure [261] F. Residual Concerns [273] VII. Causation [283] VIII. Damages: Conducting a Trial within a Trial [287] A. General Principles of Damages [287] B. The Trial within a Trial [288] C. Trial Positions of the Parties [295] D. Issues [299] E. Causation [300] F. Apportionment of Liability [342]

G. Damages [346] IX. Conclusion [384] II Features of a Trial for Professional Negligence Against aLawyer [5] A trial for lawyer misconduct involves two distinct components. The first requires the trial judge to determine whether thelawyer breached his or her professional obligations by falling below the standard of care expected of a reasonably prudent lawyer in thecircumstances. The second involves deciding the plaintiff’s damages as a result of that negligence.

This is done by determining what theplaintiff would have recovered but for the negligence, which is what the plaintiff would have obtained at trial if he or she did not acceptthe impugned settlement. This “trial within a trial” is described in Adeshina v Litwiniuk & Co, 2010 ABQB 80 at para 4: In Alberta, the practice of courts hearing a professional malpractice action is, when necessary, to conduct a “trial within a trial” toascertain the loss, if any, caused by the lawyer’s breach of duty.

It calls for a determination of the merits, as can be best accomplished, ofthe underlying action which in the case at bar is Mr. Adeshina’s personal injury claim.

A “trial within a trial” requires a judge to try thehypothetical action that the plaintiff would have had against the original defendant but for the negligence of the professional, includingissues of liability, causation and damages. [6] The Alberta Court of Appeal in Workers’ Compensation Board (Alberta) v Riggins (1993), 1992 ABCA 263 , 131AR 205, said that the plaintiff bears the onus of proof in both the professional negligence action and the underlying cause of action. III Facts A. The Parties [7] Mr. Kitching is forty-three years old and has lived in Calgary for the past fifteen years.

He is a large man by height andframe, but not overweight. At some point, Mr. Kitching entered into a common law relationship with Ms. Guy. The two never married,eventually separated, and Ms. Guy later died from cancer. Mr. Kitching later married his current wife, Karen. He now lives with Karenand is father to four children between the ages of eighteen and six. Mr. Kitching is also the stepfather to one of Karen’s children, who istwenty-one. [8] Between 2000 and 2005, Mr. Kitching provided drywall taping and finishing services as a sole proprietor.

In 2005, Mr.Kitching incorporated his business under the name My Best Taper Inc. (“My Best Taper”). Between 2005 and 2007, Mr. Kitchingexpanded the scope of his business to encompass entire drywall contract projects and hired a small crew of subcontractors andemployees. Mr. Kitching was involved in all aspects of his business, usually working eight to ten hour days. In addition to the variousmanagerial and supervisory responsibilities involved in running his business, Mr. Kitching was an active part of the crew.

He operatedlarge drywall-specific heavy tools while working on construction stilts for hours at a time. By October 2007 his business was growingand he had recently hired two new employees. [9] With respect to his personal life, in October 2007 Mr. Kitching was living with his partner Ms. Guy and three children. Histime outside of work focused mainly on the home, the children and the children’s activities. His recreational life included working outand snowboarding. Mr. Kitching was involved in a minor motor vehicle accident in 1995; any pain from this accident resolved within afew months.

He had no health problems or conditions before the Accident. [10] Mr. Devlin obtained his law degree from the University of Windsor in 1976 and was admitted to the Alberta bar the followingyear. He handled complex criminal cases until around 1990 and then transitioned into medical malpractice and personal injury cases. Hiscurrent practice is eighty percent medical malpractice and twenty percent personal injury. He has handled nearly 1,000 cases and becamea Queen’s Counsel in 2002. B. The Accident [11] The Accident occurred on October 11, 2007, at approximately 9:20 a.m. in Calgary, Alberta. Mr.

Kitching was driving towork in his Ford pickup truck. Three of his employees were in the passenger seats. He was driving in the right lane of two lanes, heading northbound on 36th Street NE. The speed limit was marked as reduced to fifty kilometers per hour as a result of construction in the intersection. Mr. Kitching was driving at that speed. As he approached the intersection of 36th Street NE and 44th Avenue NE, Mr.Kitching saw his traffic light change from red to green. Accordingly, he maintained his speed and entered the intersection. [12] When Mr.

Kitching was about three-quarters of the way through the intersection, his vehicle was struck on the left side by avan operated by Ms. Cheryl Wyatt. He did not see Ms. Wyatt’s vehicle until a “fraction of a second” before the vehicles made contact.Mr. Kitching had the right of way and Ms. Wyatt was making a left hand turn into oncoming traffic. As a result of the collision, Mr.Kitching lost control of his vehicle. It was sent off the roadway towards a nearby daycare on the corner of the intersection.

His truckcrashed through the steel and chain link fence of the daycare’s playground, the concrete posts of an overhead sign, playgroundequipment, and finally stopped partially through the brick wall of the daycare. Mr. Kitching lost consciousness for up to two minutes,likely from when the vehicle struck the brick wall. No one at the daycare was hit. [13] When Mr. Kitching regained consciousness, a bystander informed him that emergency medical services (“EMS”) were enroute. EMS responded within five minutes and removed Mr. Kitching from the vehicle. Mr. Kitching felt many aches and pains and his

wrist felt broken. The father of one of his employees drove Mr. Kitching to the nearby hospital. At the hospital medical staff assessed him for injury, a cast was put on his right wrist and he was released with instructions to contact his family doctor. [ 14 ] Ms. Wyatt was later charged under the Traffic Safety Act , RSA 2000, c T-6. A witness to the Accident named Mr. James Guss provided a statement to the police indicating that Ms. Wyatt was at fault. He had been travelling some distance behind Mr. Kitching. C. Post-Accident Lifestyle [ 15 ] Mr. Kitching’s life changed after the Accident.

In the following week, Mr. Kitching experienced a significant amount of pain in his right wrist, upper spine, chest and upper back muscles. He also had difficulty sleeping. Mr. Kitching met with his family physician, Dr. Zahid Rafiq, who prescribed painkillers. Mr. Kitching did not return to work that week and asked one of his employees to help manage My Best Taper while he recovered. [ 16 ] Mr. Kitching was still in pain one month following the Accident that he described as severe. He was still using painkillers, his sleep was poor and he was not able to return to work. The employee who had assumed Mr.

Kitching’s duties expressed that he would help run My Best Taper only for a limited period of time. [ 17 ] Three months after the Accident Mr. Kitching’s pain continued. He experienced significant difficulties walking, laying down, sitting, sleeping and doing even simple actions such as lifting his arms. He also felt burning sensations in his right wrist, which eventually spread to his left wrist and feet. Ms. Guy took over all of the household chores. He had terminated his employees and shut down My Best Taper. Thereafter, Mr.

Kitching said his chronic pain prevented him from returning to any type of employment. [ 18 ] Between 2009 and 2010 Mr. Kitching said he continued to experience constant fatigue and severe pain in his spine, back, ribs, and chest, as well as the chronic burning sensation in his feet and arms. He still had problems with his sleep. He could not do household chores and for the most

part could not engage in physical and social activities with friends and family. He was also taking several painkillers and drugs to manage his symptoms, including Relevia, Gabapentin, Neurontin, Baclofen, Naproxen, and Tylenol 3s. [ 19 ] When asked about his current symptoms by the time of this trial, he stated that he felt “virtually the same” as he did in 2010. He confirmed that he was still on the same medicine regimen and attends physiotherapy three times a week to deal with his pain symptoms. He does not work and his wife and children handle all of the house work. [ 20 ] Mr.

Kitching started to receive disability income replacement from his insurers immediately following the Accident. Those payments ceased on October 11, 2009. In or around January 2010, Mr. Kitching was approved for disability coverage under the Canada Pension Plan (“ CPP ”). CPP awarded Mr. Kitching retroactive payments dating back to October 2009 and gave him roughly $1,650 per month. In 2011, Mr. Kitching was accepted into the Assured Income for the Severely Handicapped (“ AISH ”) program. D. Medical Treatment [ 21 ] As a result of the Accident Mr. Kitching underwent numerous medical examinations.

I will not recite this lengthy chronology in detail. However, I will summarize the key findings of Mr. Kitching’s treating physicians. [ 22 ] On the day of the Accident, a magnetic resonance imaging (“ MRI ”) and x-rays of Mr. Kitching’s spine were described as being normal. X-rays of the right wrist were interpreted as normal but medical staff requested a bone scan for the next day when they noticed the wrist was tender. The bone scan indicated a suspected fracture within the capitate bone of the right wrist. The left hand and wrist were described as unremarkable. Medical staff applied a cast to Mr.

Kitching’s right wrist; the cast was removed six weeks later. Mr. Kitching was referred to Dr. Kevin Hildebrand, an orthopedic surgeon, for follow-up on his wrist. [ 23 ] Dr. Hildebrand examined Mr. Kitching on November 23, 2007, and observed that Mr. Kitching was still in pain. Dr. Hildebrand indicated that he had concerns about the possibility of Mr. Kitching developing Complex Regional Pain Syndrome (“ CRPS ”), which is an uncommon form of chronic pain that affects the arms or legs. [ 24 ] In a report dated January 4, 2008, Dr. Hildebrand concluded that Mr. Kitching’s right wrist had healed. However, Dr.

Hildebrand noted that Mr. Kitching was complaining of “some burning type sensations into his hand as well as some shininess of the skin and increased hair growth.” Dr. Hildebrand observed that the right arm also showed signs of atrophy. Dr. Hildebrand diagnosed Mr. Kitching with CRPS in the right arm. The doctor continued to meet with Mr. Kitching throughout 2008, documenting mild tenderness and discoloration to both hands. By April 2009, Dr. Hildebrand was of the opinion that Mr. Kitching’s CRPS had resolved and he discharged him from further follow up with his clinic. Dr.

Hildebrand confirmed this in a report dated June 15, 2009, although he acknowledged that he was not an expert in the diagnosis and management of CRPS. [ 25 ] In the summer of 2008, Dr. Rafiq referred Mr. Kitching to a specialist named Dr. Vincent Choi for an assessment. In a report dated July 8, 2008, Dr. Choi indicated that Mr. Kitching was complaining of chronic pain from the back of his neck down to his lower back, wrists, shoulders, and chest pain. The doctor noted that Mr. Kitching appeared as a “very anxious man” and that examination of the chest, heart, and abdomen were normal. Dr. Choi opined that Mr.

Kitching suffered from “massive muscle injuries with scarring, physical deconditioning and also facet joint syndromes.” Dr. Choi recommended Mr. Kitching start an exercise program. [ 26 ] In 2008, Dr. Rafiq also referred Mr. Kitching to the Chronic Pain Centre (“ CPC ”) in Calgary. At the CPC, Mr. Kitching continues to work with Mr. David Volpi, a physiotherapist, approximately three times per week to develop strategies to manage his symptoms. [ 27 ] Mr. Kitching also met with Dr. Misbah Shah, an anesthesiologist, at the CPC. During Mr. Kitching’s initial examination on July 20, 2008, Dr. Shah noted that Mr.

Kitching’s back and right wrist were tender and had limited range of motion. Mr. Kitching also reported symptoms of coldness, burning, and stabbing pain in both hands. On May 11, 2009, Dr. Shah told Mr. Kitching that she was

comfortable diagnosing him with CRPS in his hands and feet. In her report dated January 20, 2010, Dr. Shah confirmed that a nuclear medicine scan showed no radiological evidence of CRPS. She said that this did not negate the diagnosis of CRPS, but could not confirm for how long the condition would last. [ 28 ] In or around December 2008, Mr. Kitching started seeing Dr. Allen Hooper with the Advanced Spinal Care Centre. In a report dated December 3, 2008, Dr. Hooper noted that Mr. Kitching complained of severe spinal pain, but several MRIs of the spine reported as normal. Dr.

Hooper also noted that a bone scan done in July of that year showed no evidence of CRPS. In early 2009 Mr. Kitching started to receive prolotherapy, which involves injecting dextrose solutions to provoke regenerative tissue, to help with his chest and back pain. [ 29 ] Based on the foregoing, the treating physician records reveal uncertainty as to whether Mr. Kitching continued to suffer from CRPS by the time of the JDR in 2010. Dr. Shah, the only treating physician who believed that the CRPS was ongoing, could not confirm whether it was permanent. This medical uncertainty became important in Mr.

Devlin’s approach to Mr. Kitching’s law suit for damages. E. Retaining Mr. Devlin [ 30 ] In the days that followed the Accident Mr. Kitching solicited recommendations for a lawyer to help him commence a personal injury lawsuit against Ms. Wyatt. Mr. Devlin came highly recommended. On October 23, 2007, he selected and retained Mr. Devlin to act as his legal counsel on a contingency fee basis. Mr. Devlin also agreed to act for Ms. Guy for her loss of consortium claim arising from the Accident. [ 31 ] Mr. Devlin mailed a contingency fee agreement to Mr. Kitching and Ms. Guy (the “ Original CFA ”).

The Original CFA stated that Mr. Kitching was required to pay a contingency fee of twenty-five percent of the total amount recovered if recovery occurs prior to 120 days before trial and thirty-five percent of the amount recovered if recovery occurs within 120 days of trial. If Mr. Kitching wished to transfer the file to another lawyer, he had to pay Mr. Devlin for any work performed on the file up to that point at a rate of $400 per hour. The Original CFA also required Mr. Kitching to pay for any disbursements. Mr. Kitching and Ms. Guy signed the agreement and returned it to Mr. Devlin. [ 32 ] Mr.

Devlin filed a statement of claim on behalf of Mr. Kitching on February 14, 2008. The statement of claim sought against Ms. Wyatt $150,000 in general damages, special damages for past loss of wages and expenses, damages for future cost of care and future loss of income, interest and any other damages as may be proven at trial. [ 33 ] Mr. Zul Verjee, counsel for Ms. Wyatt and her insurer, filed a statement of defence. It denied that the Accident occurred, denied any wrongdoing by Ms. Wyatt if the Accident did occur, alleged contributory negligence on the part of Mr.

Kitching, denied that any injuries, damages or losses occurred, alleged that if any damages did occur that Mr. Kitching failed to mitigate those damages, and alleged that all of Mr. Kitching’s injuries and complaints could be explained by other accidents, injuries or medical conditions which existed before the Accident. [ 34 ] Examinations for discovery of Mr. Kitching, Ms. Guy, and Ms. Wyatt were scheduled for November 5 and 6, 2008. To help them get ready, Mr. Devlin gave Mr. Kitching and Ms. Guy guidance in the form of a brochure and held a preparation session with them on October 30, 2008. [ 35 ] Mr.

Kitching and Mr. Devlin disagree as to what transpired at this October 30 meeting. Mr. Kitching testified that this meeting lasted no more than ten to fifteen minutes and only five to eight minutes were spent discussing the discovery. He indicated that Mr. Devlin did not conduct any meaningful preparation, but simply referred him to the brochure. Mr. Devlin testified that the October 30 meeting lasted “probably in the area of an hour.” He stated that they went through the details of the Accident and discussed possible questions and answers for the examination. When giving his testimony on this topic, Mr.

Devlin referred to six pages of notes that he made during the meeting. [ 36 ] I accept Mr. Kitching’s recollection that the preparation did not seem to him to take very long, particularly since, I find, during the actual questioning he felt stressed and unprepared. However, this resulted more from his surprise at his questioning occurring on the first and not the second day of the two that had been set aside, than it did from any material deficiency in the content of the preparation. I find that the preparation session took closer to an hour than to fifteen minutes, but that it focussed more on preparing Mr.

Devlin (resulting in his six pages of notes from his getting up to speed on Mr. Kitching’s evidence and, to a lesser degree, Ms. Guy’s, evidence) than it did in preparing Mr. Kitching in the way he wished he had been during his questioning. [ 37 ] Discovery proceeded November 5, 2008, beginning with Mr. Devlin questioning Ms. Wyatt. During her examination, Ms. Wyatt acknowledged that she could not see whether the left turn signal was green, that the light for thru traffic was green, and that she did not see Mr. Kitching’s vehicle before impact. [ 38 ] Following Ms. Wyatt’s examination, Mr. Verjee examined Mr.

Kitching and Ms. Wyatt the same day. Mr. Kitching was “shocked” when he was asked to be examined on November 5. He thought he was going to be examined the following day. He also testified that there were no breaks in his examination, which caused him a tremendous amount of pain. Once the questioning concluded, he said, he went to a separate room where he collapsed on the floor and cried. [ 39 ] Mr. Devlin testified that Mr. Kitching performed “relatively well” in his examination, although he had some concerns when Ms. Guy admitted that Mr. Kitching would play video games for three or four hours every day. Mr.

Devlin added that Mr. Kitching raised no concerns about being questioned on November 5, and that he did not recall Mr. Kitching lying on the floor crying after his examination. [ 40 ] I do not find these recollections mutually exclusive. Despite his strong preference to be closely involved throughout, Mr. Kitching did not resist every time he was not. It was obvious that Mr. Kitching respected Mr. Devlin greatly. He had no prior experience with a legal process of this nature. He selected Mr. Devlin as his counsel largely because of the strength of his reputation. And so at this

stage of the lawyer-client relationship, Mr. Kitching acquiesced to Mr. Devlin telling him his questioning was on the first day and not the next day. Mr. Devlin’s approach, again, was not the sort to first ask Mr. Kitching if it was okay for him, but to just get on with it. [ 41 ] At the request of Mr. Verjee, Mr. Kitching attended an independent medical examination (“ IME ”) with Dr. Christopher Penney on February 26, 2009. Mr. Devlin received a copy of Dr. Penney’s report in April 2009. [ 42 ] Dr. Penney’s report disputed the diagnosis of CRPS. He observed that Mr.

Kitching’s extremities did not show any thickening or thinning of the skin, atrophy, sweating, or any abnormal coldness or warmth. Although he noted some mild mottling of the skin over Mr. Kitching’s hands, the doctor concluded that there was no objective evidence to support a diagnosis of CRPS. Dr. Penney opined that Mr. Kitching’s problems were likely psychiatric in origin and that the most likely diagnosis was psychogenic rheumatism, a somatoform pain disorder in which a patient unconsciously converts psychological distress into physical symptoms. He recommended that Mr.

Kitching see an independent neurologist to determine whether he suffered from a neurological condition unrelated to the October 2007 motor vehicle accident. [ 43 ] Dr. Penney’s report was not introduced as an exhibit at this trial. Mr. Devlin testified that the report also indicated that Mr. Kitching would complain that sunlight caused him pain and that he would not shake hands but would drink from a glass using the same hand. [ 44 ] In May 2009, Mr. Kitching received a letter from Fric, Lowenstein & Co LLP (“ Fric Lowenstein ”), a law firm representing the Bank of Montreal (“ BMO ”).

This letter indicated that Mr. Kitching had incurred $26,470.38 in credit card debt and BMO had obtained default judgment as against Mr. Kitching for that amount. The letter indicated that BMO would proceed to enforce the judgment unless the debt was paid in full. [ 45 ] Upon receiving this letter, Mr. Kitching reached out to Mr. Devlin for assistance. Mr. Devlin agreed to help his client with this separate legal problem and negotiated an arrangement with Fric Lowenstein, without charge to Mr. Kitching. This agreement required Mr.

Kitching to give BMO twelve post-dated cheques in the amount of $200 and to pay the remaining debt out of any settlement funds from his claim against Ms. Wyatt by way of an irrevocable assignment of proceeds (the “ BMO Assignment ”). In return, BMO agreed not to take any steps to enforce the judgment. [ 46 ] On September 23, 2009, Mr. Devlin and Mr. Verjee attended a pre-trial conference. At this conference, the parties received permission to

schedule a two week trial. The defence also indicated that they were willing to participate in a JDR. In a letter dated September 28, 2009, Mr. Devlin informed Mr. Kitching that they would need three items to prepare for the JDR: a neuropsychological report, an actuary report and a neuro-assessment to refute any suggestion that Mr. Kitching’s problems were psychological. Ultimately, Mr.

Devlin did not get a neuropsychological report because he believed there was no evidence of a brain injury or cognitive dysfunction. [ 47 ] On October 28, 2009, the parties filed with the court a Certificate of Readiness for Trial. This certificate indicated that the trial would concern “Liability, Causation and Damages.” A JDR was scheduled for March 11, 2010, and a two week trial was scheduled for November 2010. [ 48 ] In the fall of 2009 Mr. Kitching’s cash flow pressures continued to mount. He was between the cessation of his insurer’s payments and approval of funds from CPP. He told Mr.

Devlin that he would be unable to pay the necessary disbursements to have the expert reports prepared for the JDR. Mr. Devlin had been paying for the disbursements to date and had written to Mr. Kitching asking for reimbursement, as required of Mr. Kitching under the Original CFA. He wrote Mr. Kitching a couple of times for payment. [ 49 ] In or around November 2009, Mr. Devlin agreed to pay the disbursements in exchange for increasing his contingency fee from twenty-five percent to thirty-five percent of whatever Mr. Kitching recovered. On November 5, 2009, Mr.

Devlin mailed an amended contingency fee agreement to Mr. Kitching (the “ Amended CFA ”). In an accompanying letter, Mr. Devlin wrote “As agreed, this agreement is based on a contingency fee of 35% of any actual recovery, and our office will be responsible for covering the disbursements incurred.” [ 50 ] However, the Amended CFA changed a lot more than the contingency fee.

Although not part of the oral agreement between them to amend the CFA, and not explained in any way in the accompanying November 5, 2009, letter, the Amended CFA also changed the following: a. the hourly rate for all the work done on the file increased from $400 to $500, which Mr. Kitching would have to pay Mr. Devlin before he could transfer the file to another lawyer; b. if Mr. Devlin recommended a settlement that Mr. Kitching refused to accept, and the claim then settled for less than what had been recommended, Mr.

Devlin would be entitled to compensation on the basis of the settlement recommended but refused by Mr. Kitching; c. Mr. Devlin would now receive back thirty-five percent on all disbursements; and d. Mr. Devlin would now receive five percent interest per annum on all disbursements paid by him. [ 51 ] Mr. Kitching signed and returned the Amended CFA. [ 52 ] The parties disagree on whether Mr. Kitching was aware of all of the differences between the Original CFA and the Amended CFA. Mr. Kitching testified that when he signed the new agreement, he believed that increased contingency fee was the only amendment. Mr.

Devlin testified that he “discussed the agreement in total” with Mr. Kitching. The following exchange in cross examination is insightful as to Mr. Devlin’s recollection of this discussion: Q So, in fact, the new agreement changes it so that if you pay -- to take into account the fact that you’re paying disbursements, in addition to an additional 10 percent on the main body, you’re going to get 35 percent of whatever you lay out as disbursements.

A That’s the way it reads, that’s right. Q And that you intentionally put that in there. A I believe so, yeah. Q And did you bring that to the attention of Mr. – A Kitching? Q -- Kitching? A Well, I brought the whole agreement to his attention. Q But you didn’t mention that. Did you? A Well, we went through the -- he came to me. He couldn’t pay the disbursements. We had discussions about what we would change, we discussed this agreement in detail, and then I sent it to him. So did I discuss that with him? My recollection is that I would have discussed that with him, yes, at the time. Q You would have, or you did?

A I did. Q You did. A Yes. Q When? When? A When we had the discussion in November about changing the contingency agreement, because we were now going to take full responsibility to pay all the disbursements for all of these additional experts that we needed. [ 53 ] I accept Mr. Kitching’s evidence that Mr. Devlin did not draw Mr. Kitching’s attention to the other differences between the agreements. The November 5, 2009, cover letter only refers to the increased contingency fee, not to any of the other significant amendments to the CFA, which is not insignificant on the question of whether Mr.

Kitching was informed of the changes to the CFA. Throughout his testimony, Mr. Devlin repeatedly used the phrase “I would have” when discussing what he said or did during the course of the retainer because, understandably, he could not remember all the specifics. This is understandable since Mr. Devlin, like most lawyers, works on many files concurrently and many more over the years in practice. In his testimony on many items his recollection was informed by the notes he made contemporaneously.

I find it unlikely that he in this select situation recalls with greater specificity all that was said in this particular discussion. [ 54 ] Given Mr. Kitching’s detailed and careful approach to the process Mr. Devlin was undertaking for him, however, I also find that Mr. Kitching reviewed the Amended CFA before signing it and that he had opportunity to ask further questions about anything within it he did not understand or did not like. Mr. Devlin never drew to Mr. Kitching’s attention all of the differences between the Original CFA and the Amended CFA.

F. The Road to the JDR [ 55 ] Mr. Kitching and Mr. Devlin disagree as to the rationale for attending the March 11, 2010, JDR. Mr. Kitching testified that, due to his ongoing financial troubles, he and Mr. Devlin agreed to settle one or two heads of damages. Mr. Kitching explained that they aimed to secure $30,000 to $40,000 to assist him with his day to day expenses. When asked in cross examination as to how that plan would succeed when he would need to pay $25,000 to BMO pursuant to the BMO Assignment, Mr. Kitching said “Maybe I hadn’t thought that far ahead”. [ 56 ] For his part, Mr.

Devlin testified that the reason for going to the JDR was to settle the entire file if possible. Mr. Devlin rejected the idea that they set out to settle only a couple heads of damages. He added that the only discussion that he had with Mr. Kitching about an advance payment involved requesting an advance from the defendant under the Insurance Act , RSA 2000, c I-3, which Mr. Verjee refused. [ 57 ] Mr.

Devlin testified that since the medical reports from the treating physicians conflicted with each other, he did not retain an occupational therapist to prepare a functional capacity evaluation (“ FCE ”), a housekeeping assessment, or a future cost of care report. These reports, which will be discussed in detail later, address the extent of an injured person’s functional impairment and what medical expenses the person may require in the future. Additionally, Mr.

Devlin did not retain a vocational therapist to prepare a vocational residual capacity evaluation, which shows what income an injured person can earn in a different job if he cannot return to the job he held prior to the accident. Mr. Devlin reasoned that these reports would not be helpful at the JDR because they base their findings on the medical diagnoses, which he believed were largely inconclusive in this case. [ 58 ] On December 21, 2009, Mr. Devlin requested a future loss of income and future cost of care economic assessment from Ms. Kelly Rathje, an economist at Economica.

Typically, an economist calculates these heads of damages using the reports prepared by the occupational therapist and the vocational therapist. Because Mr. Devlin did not have any of these reports, he instructed Ms. Rathje to assume that Mr. Kitching has not been able to work since the Accident and will not be able to work in the future. He also provided Ms. Rathje with Mr. Kitching’s financial information and his medical expenses. This economic report was finished on February 18, 2010, (the “ Economica Report ”) and appended to the JDR brief that Mr. Devlin filed on behalf of Mr.

Kitching (the “ JDR Brief ”). [ 59 ] Even though the Economica Report was based on assumptions rather than underlying expert evidence, Mr. Devlin testified that he planned to have all the necessary reports ready by trial in November 2010. On February 10, 2010, Mr. Devlin wrote to an occupational therapist named Ms. Heather Chilton to request a FCE and future cost of care report by the middle of June 2010. Mr. Devlin testified that he would then provide this report to Ms. Rathje, who would revise the Economica Report. Once the revisions were complete, Mr.

Devlin would provide all of the expert reports to the defence by July 2010 in accordance with the Rules of Court . Mr. Devlin testified that if he was not able to get the reports together in time, he would apply to the court for an adjournment or ask for an agreement from opposing counsel for an extension or reduction of the necessary time requirements. [ 60 ] To bolster Mr. Kitching’s medical evidence, Mr. Devlin arranged for Mr. Kitching to attend an IME with Dr. Ian Clarke on March 1, 2010. After the IME, Dr. Clarke discussed his findings with Mr. Devlin in a phone conversation that same day. Dr.

Clarke agreed that Mr. Kitching suffered from CRPS in the right wrist and that it had spread to the left wrist. However, the doctor felt that the CRPS had resolved in 2009. Dr. Clarke attributed any weakening of Mr. Kitching’s extremities to mere disuse. The doctor also stated that the hypersensitivity over almost the entire body did not coincide with any physical cause. He indicated that the ongoing back pain was inconsistent with any known lesion or disease, other than perhaps a psychological consequence of CRPS. Dr. Clarke noted that Mr.

Kitching was “extremely obsessive about the condition of his body” and that he may be a hypochondriac. [ 61 ] In Mr. Devlin’s opinion, Dr. Clarke’s findings called into question the diagnosis of CRPS. Mr. Devlin also understood from his conversation with Dr. Clarke that any latent psychological issues would not be attributable to CRPS. Mr. Devlin indicated that he believed Dr. Clarke’s examination to damage Mr. Kitching’s case. No report was prepared prior to the JDR and no report was provided to Mr. Kitching. [ 62 ] Ultimately, Mr. Devlin included in the JDR Brief medical reports prepared by Mr.

Kitching’s treating physicians, which included Dr. Hildebrand, Dr. Choi, Dr. Hooper, and Dr. Shah. He also included reports by Mr. Volpi, the physiotherapist. [ 63 ] According to Mr. Kitching, Mr. Devlin sent him an email on February 24, 2010, stating that he had sent the brief to be filed by courier. He had attached a version of that same brief and Mr. Kitching replied indicating that he was not pleased with the brief. Conversely, Mr. Devlin testified that he sent a draft version of the brief to Mr. Kitching before he filed it. Mr. Kitching testified that Mr.

Devlin phoned him the next day stating that he did not want to discuss the brief and that “it better not be fucking grammatical errors”. Mr. Kitching testified that Mr. Devlin “calmed down” when he learned that Mr. Kitching’s comments were legitimate. I accept Mr. Kitching’s evidence on this exchange. It is the most plausible in all the circumstances and the most consistent with other evidence of the patterns of interaction between then and, until then, the patterns of limited involvement of Mr. Kitching. [ 64 ] Mr. Kitching and Mr. Devlin both agree that Mr.

Devlin incorporated various comments, corrections, and suggestions by Mr. Kitching, including in respect of quantum being claimed, into a revised JDR brief. [ 65 ] The JDR briefs were exchanged between counsel on February 25, 2010. The revised brief filed by Mr. Devlin on behalf of Mr. Kitching requested relief for damages, future loss of income and other heads of damage in an amount totaling over $1,000,000.

The brief also indicated that relief was sought for future care expenses in an amount “to be determined” and estimated that amount may be as high as an additional $1,000,000. [ 66 ] The JDR brief filed on behalf of the defence alleged that Mr. Kitching was at least fifty percent liable for causing the Accident based on a statement by the independent witness Mr. Guss. The defence brief claimed that Mr. Kitching’s damages should be calculated at only $50,000, and indicated they would not consider any amount for future loss of income or cost of future care. [ 67 ] Mr. Devlin testified that he met with Mr.

Kitching on March 8, 2010, to prepare for the JDR. Referring to his notes entitled

“March 8 Kitching Office”, Mr. Devlin stated that they discussed the claim, the accident and what to expect at the JDR. Although Mr. Kitching did not dispute this meeting, he could not recall whether it occurred. [ 68 ] Prior to attending the JDR, Mr. Kitching testified that at no point in time did Mr. Kitching and Mr. Devlin agree to a range of years that Mr. Kitching would limit his claim to for the purposes of settlement, nor had they discussed a “lowest” settlement number range that would be acceptable. G. The JDR [ 69 ] On March 11, 2010, Mr. Kitching, Ms. Guy and Mr. Devlin attended the JDR. Mr.

Verjee appeared on behalf of Ms. Wyatt along with her insurance adjuster. Justice Lutz presided. Following Justice Lutz’ introductory remarks and opening statements by both parties, Mr. Kitching and Ms. Guy went to a side room while Mr. Devlin discussed settlement with Mr. Verjee. [ 70 ] A professional negligence trial that involves examining a lawyer’s conduct at a settlement negotiation presents a significant risk of disclosing communications that are subject to settlement privilege. Although Mr. Kitching waived his privilege over solicitor client communications between he and Mr.

Devlin by commencing this lawsuit (see for example Monco Holdings Ltd v BAT Development Ltd , 2001 ABQB 133 at para 7 ), he could not waive the settlement privilege of Ms. Wyatt or her insurer, who were the counter-parties to the negotiation and who participated in the privileged settlement communications.

Settlement privilege applies to both parties involved in the negotiation and cannot be waived unilaterally: 3058354 Nova Scotia Co v On*Site Equipment Ltd , 2011 ABCA 168 , at para 50 . [ 71 ] Notwithstanding the parties’ silence on this point, and without any formal request by either party to this trial to override the settlement privilege, I am satisfied that in this case the privilege attached to the settlement communications at the JDR must be set aside for purposes of this professional negligence proceeding.

In Sable Offshore Energy Inc v Ameron International Corp , 2013 SCC 37 , the Supreme Court of Canada wrote at para 19 that settlement privilege can be set aside where a party shows that, on the balance, “a competing public interest outweighs the public interest in encouraging settlement”. The Court added that an allegation of undue influence is a valid countervailing interest. That is alleged here. I also find that Mr. Kitching’s other allegations of solicitor negligence in the context of this settlement meeting suffice to show that competing public interest that outweighs the reasons for settlement privilege.

To conclude otherwise in a case like this would result in there being a situation in which one party (the lawyer) may breach the law without any risk of consequence, contrary to the rule of law. In this case the information about the settlement communications between the parties to the Kitching and Wyatt law suit is necessary contextual narrative for a proper understanding of the communications between the parties to this action. [ 72 ] The proper practice, however, would have been to notify Ms. Wyatt and her insurer to request their waiver of the settlement privilege.

If denied, then an application to the court on notice to the resisting counter-party(

s) can be made, at which time the competing interests can be weighed and the question determined. The importance of the public interest that the settlement privilege is intended to accomplish dictates that the rights of persons like Ms. Wyatt and her insurer should not be ignored. Holders of the privilege should have the opportunity to be heard when one of the negotiating counter-parties wishes to no longer be bound by the privilege. [ 73 ] Mr. Kitching and Mr. Devlin describe different and contradictory versions of what transpired for the rest of the JDR. Mr. Kitching’s written submissions provide a helpful

summary of his evidence, which I will reproduce at paras 80 to 90 of this judgment, with some additions. [ 74 ] According to Mr. Kitching, after a short time Mr. Devlin returned to the side room where Mr. Kitching and Ms. Guy awaited. Mr. Kitching testified that Mr. Devlin explained that the defence was not willing to pay any more than five years of income replacement for future wage loss. Mr. Kitching testified that Mr. Devlin went through a few of the points of the JDR briefs and that Mr. Devlin said that Dr. Penney, Dr. Clarke and Dr.

Hildebrand had all said the CRPS diagnosis had changed, or was now a different diagnosis, and that without the CRPS diagnosis Mr. Kitching was not totally disabled or able to be classified as disabled. [ 75 ] Mr. Kitching testified that Mr. Devlin also reported that the defence had a second statement from Mr. Guss, the independent witness who was two cars behind Mr. Kitching in the Accident. Mr. Kitching understood the defence to be relying on this statement to argue that Mr. Kitching should be fifty percent liable for the accident. Mr.

Kitching believed this second witness statement to contradict entirely the first statement made by Mr. Guss and to contradict entirely Mr. Kitching’s own recollection of events. Mr. Kitching said he voiced these concerns to Mr. Devlin, who then left to have further discussions with defence counsel. [ 76 ] At this time no specific numbers were put forward by the defence and there was no discussion between Mr. Kitching and Mr. Devlin regarding any numbers to propose to the defence. [ 77 ] After ten to fifteen minutes, Mr. Devlin returned to the room where Mr. Kitching and Ms. Guy awaited. Mr.

Kitching testified that Mr. Devlin inquired what the “lowest number” was that Mr. Kitching would be willing to accept. Mr. Kitching testified that he found this question shocking as his belief was they were not at the JDR to settle the entire claim. Mr. Kitching testified that at no point in time leading up to this moment had he and Mr. Devlin never discussed a “lowest number” that would be acceptable as settlement and that Mr. Devlin did not provide any guidance to Mr. Kitching as to what an appropriate lowest number might be. [ 78 ] Mr.

Kitching testified that he did not have a number in mind as he had “no idea” what his claim was worth beyond the numbers which were included in the JDR brief. He requested help from Mr. Devlin in formulating a number and testified that Mr. Devlin in turn just wanted to know what the lowest acceptable number would be. Mr. Kitching stated that at this point in time Mr. Devlin began explaining the variety of reasons why Mr. Kitching would need to reduce his potential claim, including the statement from Mr. Guss and potential issues surrounding proving or disproving contributory negligence. [ 79 ] Mr.

Kitching put forward a number of $500,000 to Mr. Devlin. No specific numbers were discussed by Mr. Kitching and Mr. Devlin as to what would be appropriate for Mr. Kitching to consider for each of the heads of damages. Mr. Kitching testified he felt “overwhelmed” by the request to come up with a number at that time. Mr. Devlin then left to discuss that number with defence counsel.

[ 80 ] Mr. Kitching testified that at one point Mr. Devlin indicated that the defence was referring to some surveillance footage of Mr. Kitching. Mr. Kitching stated that he did not know of any surveillance and they agreed to disregard it. The issue was not brought up again. [ 81 ] Mr. Kitching testified that Mr. Devlin returned after another fifteen minutes and was holding a defence IME report from Dr. Kenneth Hashman (the “ Hashman Report ”). Some context is necessary here. [ 82 ] In January of 2010, Mr. Kitching attended for a psychiatric examination by Dr. Hashman. Dr. Hashman disputed Dr.

Penney’s diagnosis of psychogenic rheumatism because Mr. Kitching did not present with any acute underlying psychological distress. Dr. Hashman felt that the Accident precipitated an adjustment disorder with mixed anxiety and depression. Dr. Hashman noticed that Mr. Kitching “overly focused on his physical symptoms, which is likely a reflection of extensive medical interventions and ongoing litigation.” Dr. Hashman’s report was not given to Mr. Devlin in advance of the JDR. [ 83 ] Returning to Mr. Kitching’s recollection of the JDR, Mr. Kitching testified that Mr.

Devlin placed the Hashman Report on the table “quite firmly” and stated “We’re screwed, this is a conversion disorder diagnosis.” Mr. Kitching testified that Mr. Devlin stated that the Hashman Report outlined that Mr. Kitching was transferring all of the stress in Mr. Kitching’s personal life and manifesting it as a pain and that the Hashman Report meant that Mr. Kitching’s claims of pain were false. Mr. Kitching testified that he asked to review the report with Mr. Devlin for the words “conversion disorder” and did not find them. Mr. Kitching did not feel the report stated the things that Mr.

Devlin said it did. [ 84 ] Mr. Kitching testified that he understood Mr. Devlin to be saying that the Hashman Report was a “damning” piece of evidence and advocating that the claim needed to be settled that day because the Hashman Report would ruin the value of Mr. Kitching’s claim. Mr. Kitching stated he did not believe that to be true, that Mr. Devlin again identified what he believed the weaknesses of Mr. Kitching’s claim to be and that they should accept the defence’s latest offer of $350,000. [ 85 ] Mr. Kitching testified that in this discussion Mr. Devlin stated that the statement of Mr.

Guss would increase Mr. Kitching’s risk at trial due to liability, that Mr. Devlin stated that if Mr. Kitching went to trial he did not think he could achieve a higher amount and that Mr. Kitching would have to pay double the defence’s legal costs under the Rules of Court if he did not accept this offer and get a better result. [ 86 ] Mr. Kitching testified that Mr. Devlin then brought up the subject of the Amended CFA and offered to reduce his cut from thirty-five percent to twenty-five percent as an incentive to settle stating that this would reduce the amount Mr. Kitching would pay to Mr.

Devlin from approximately $100,000 to $85,000. [ 87 ] Mr. Kitching testified that he informed Mr. Devlin he did not want to settle the case that day or in its entirety. Mr. Kitching said that this upset Mr. Devlin very much and that Mr. Devlin informed Mr. Kitching that he could not get a better settlement. Mr. Kitching testified that Mr. Devlin stated that if Mr. Kitching did not accept the settlement then Mr. Devlin would not continue with the claim, Mr. Kitching would have to pay Mr. Devlin out and that Mr. Kitching would have to continue on with another lawyer. [ 88 ] Mr.

Kitching stated that his understanding from that was that if he wanted to continue with another lawyer, he would first have to pay Mr. Devlin $80,000 to $100,000. He testified he felt “stuck in a hard place” with “no options at that point”, that he was being “forced to accept this” and that he had “no choice.” [ 89 ] Mr. Kitching testified that he told Mr. Devlin that he wished to ask Mr. Verjee where the Hashman Report states that he had a conversion disorder. Mr. Kitching and Mr. Devlin returned to the main room to speak to Mr. Verjee. Mr. Kitching testified that Mr.

Verjee stated that for the sake of settlement he would “set aside” the Hashman Report and that they were not willing to pay more than five years’ lost income. Mr. Kitching testified that Mr. Verjee again reiterated the position of the defence regarding contributory negligence and once again referred to the statement of Mr. Guss. Mr. Verjee then made the offer of $350,000 (the “ Settlement Offer ”) to Mr. Kitching, and Justice Lutz explained to Mr. Kitching that he could choose to accept it, but that if he did not accept it they could proceed to trial. [ 90 ] Mr.

Kitching testified that they took a lunch break so that he might think the offer over and discuss the matter with Ms. Guy. Mr. Kitching stated that during this break he and Mr. Devlin did not discuss what proceeding to trial might look like and that he believed he did not have the option to proceed to trial as his understanding was that unless he could pay Mr. Devlin out in his fees entirely for all services performed, and then get another lawyer, he only had one option: to accept the Settlement Offer. [ 91 ] I will now summarize Mr. Devlin’s recollection of the JDR. Mr.

Devlin testified that during the defence opening statement at the JDR Mr. Verjee first referred to the Hashman Report. Mr. Devlin told Mr. Verjee that he had not seen the Hashman Report. Mr. Verjee then indicated that the Hashman Report concludes that Mr. Kitching had no psychiatric injury from the Accident and that he had at best an adjustment disorder. [ 92 ] Mr. Devlin testified that at a break he took the Hashman Report into the room where Mr. Kitching and Ms. Guy awaited. He denied throwing the report down on the table and he denied any conversation of a conversion disorder arose.

He agreed that the Hashman Report stated that Mr. Kitching did not have a psychiatric injury, but only an adjustment disorder. Mr. Devlin testified that he told Mr. Kitching that they could still proceed with the JDR on the basis that he was suffering from CRPS or that they could stop at that moment. Mr. Devlin testified that Mr. Kitching decided to continue with the JDR. [ 93 ] During cross-examination, Mr. Devlin testified that he had a “pretty good idea” what conversion disorder was at the time of the JDR. He described it as psychological trauma that results in a physical reaction.

He used the example of a person going blind from watching a vehicle run over a pedestrian. Mr. Devlin testified that if Mr. Kitching suffered a conversion disorder from the Accident, then he would still have a compensable injury. [ 94 ] Mr. Devlin claimed that he then returned to the negotiation room by himself to negotiate with the defence. Mr. Verjee started by offering $160,000 plus $5,000 for the consortium claim. Mr. Devlin explained that he did not take this offer back to Mr. Kitching

because “it was unacceptable.” After more negotiations, the defence increased their offer to $230,000. This was based, in part, on the defence paying loss of future income for four years, less CPP. Mr. Devlin then discussed this offer with Mr. Kitching, who was not pleased with the offer. Mr. Devlin testified that he “didn’t blame [Mr. Kitching]. I didn’t think it was acceptable.” Mr. Devlin then returned to the negotiating room to increase the defence offer. [ 95 ] Mr. Devlin testified that as the negotiations progressed, he would discuss the negative aspects of Mr. Kitching’s case with him. Specifically, Mr.

Devlin raised the issue of the lack of radiological evidence supporting Mr. Kitching’s diagnosis of CRPS, how Mr. Kitching would spend three to four hours a day playing video games and how some of his “bizarre” medical complaints may harm his credibility at trial. However, Mr. Devlin testified that he would also remind Mr. Kitching of the positive aspects of his case, such as how his insurers classified him as totally disabled and how he could work hard and support his family until the Accident. [ 96 ] Mr. Devlin also testified that Mr. Verjee would make veiled references to surveillance throughout the JDR. Mr.

Devlin testified that he told Mr. Verjee he would not pay any attention to that unless Mr. Verjee intended to disclose the surveillance. Mr. Devlin then asked Mr. Kitching if he was aware of any surveillance and if he was did he do anything of concern that may have been captured on surveillance. Mr. Kitching responded in the negative and they decided to disregard the defence’s references to surveillance for the purpose of the JDR. [ 97 ] Mr. Devlin testified that after more negotiations the defence had raised their offer to $325,000.

This increase was, in part, based on the defence paying loss of future income for five years, minus a deduction for CPP. When discussing this with the clients, Mr. Devlin heard Ms. Guy telling Mr. Kitching to accept the offer. Mr. Devlin stated that “it got a bit heated between them, not between me.” Mr. Devlin testified that Mr. Kitching said he wanted to try and get $400,000. Mr. Devlin returned to the negotiating room and got the defence to come up to the Settlement Offer of $350,000 all inclusive. [ 98 ] Mr. Devlin then discussed the Settlement Offer with Mr. Kitching.

He testified that he did not threaten to quit as counsel if Mr. Kitching did not take the Settlement Offer. He told the Court that he has never forced a client to settle in his thirty-five years of practice. He also denied stating that Mr. Kitching could not get more than $350,000 at trial. Mr. Devlin testified that he offered to drop his contingency cut from thirty-five percent to twenty-five percent to get Mr. Kitching closer to the effect of settling at $400,000. He indicated that Mr. Kitching was agreeable to that. [ 99 ] Mr. Devlin then testified that Mr.

Kitching wanted to talk with defence counsel directly. Mr. Devlin advised him against this. Nevertheless, they returned to the negotiating room, where Mr. Kitching stated that the Hashman Report said that there was nothing psychologically wrong with him and that he wanted more money. Mr. Devlin testified that Mr. Verjee offered to set aside the Hashman Report for the purpose of the JDR and that the defence was willing to compensate Mr. Kitching’s loss of future income for five years, less CPP. He also advised Mr.

Kitching that if he did not accept the offer, the defence would make a formal offer to settle for $350,000 or a different number. [ 100 ] Mr. Devlin testified that after the lunch break Mr. Kitching told him that they wished to accept the Settlement Offer. Mr. Devlin added that Mr. Kitching was “happy” with the number. [ 101 ] The Plaintiff’s written submissions provide a helpful table of the amounts claimed in the JDR Brief for Mr. Kitching, along with the amounts attributed in settlement based on Mr. Devlin’s testimony. That table is reproduced below with two caveats. First, the JRD Brief listed Mr.

Kitching’s future cost of care as “To Be Determined”. The figure in the table is from the Economica Report. Additionally, the JDR Brief claimed $111,000 for past loss of income, but this amount was reduced by $104,000 to account for Mr. Kitching’s disability benefits received.

HEADS OF DAMAGE AMOUNT CLAIMED IN JDR BRIEF AMOUNT ATTRIBUTED IN SETTLEMENT General Damages $150,000 $100,000 Prejudgment Interest on General Damages $11,650 Not stated Past Loss of Income $7,000 $7,000 Future Loss of Income $750,000 to $1,100,000 $151,000 Loss of Housekeeping $30,000 $10,000 Future Cost of Care $1,088,579 $42,000 Specials $8,000 $8,000 Loss of Consortium $40,000 $7,500 Taxed Costs and Disbursements $17,129.88 $17,000 TOTAL: $2,102,358.88 to $2,452,358.88 $350,000 [ 102 ] Mr. Devlin testified as to why he felt the Settlement Offer was acceptable.

He also testified that, based on the information he had, he could not give Mr. Kitching a range of what he could expect to obtain at trial. I will comment further on these points below. [ 103 ] Additionally, Mr. Devlin testified that he did not perceive any disconnect between himself and Mr. Kitching in terms of disagreements or arguments. He said that he did not harbour any private concerns about inadequate preparation for the JDR.

H. Post-JDR Events [ 104 ] On March 16, 2010, Mr. Kitching sent an email to Mr. Devlin explaining that he was not satisfied with Mr. Devlin’s representation at the JDR (the “ Settlement Complaint ”). He outlined seven items, as follows: Item #1: Mr. Devlin did not raise the fact that Ms. Wyatt had been charged under the Traffic Safety Act , which “would make a big difference as to liability.” Item #2: Mr. Devlin did not argue against the witness statement from Mr. Guss, which was misleading and contained false assertions.

The defence fabricated this statement or, in the alternative, if it does exist it contradicts Mr. Guss’ first statement provided on the day of the Accident. Item #3: Mr. Devlin chose to ignore paperwork from Mr. Kitching’s insurers that indicated that Mr. Kitching was disabled. Item #4: Mr. Devlin must have received the Hashman Report prior to the JDR and failed to bring this to Mr. Kitching’s attention. Item #5: Mr. Verjee lied when he said that the Hashman Report concluded Mr. Kitching had a conversion disorder. Mr. Devlin did not question this falsity. Item #6: Mr. Devlin cross-examined Ms. Guy about Mr.

Kitching using the computer for four to five hours a day. Mr. Kitching stated that he uses a speech recognition program to dictate emails. Therefore, this fact would not hurt him at trial. Item #7: Mr. Devlin characterized Dr. Clarke’s report “with a negative spin” and did not give Mr. Kitching a copy of it. Mr. Kitching added that Dr. Shah’s report would suffice to prove that Mr. Kitching suffers from CRPS. [ 105 ] Mr. Kitching then requested that Mr. Devlin review these seven items with Mr. Verjee and convince the defence to increase the compensation from $350,000 to between $450,000 and $500,000. Mr.

Kitching added that if the defence did not agree, then he would proceed to trial. [ 106 ] In cross-examination, Mr. Kitching was asked why he did not mention in his list that Mr. Devlin pressured him to accept the Settlement Offer. Mr. Kitching’s answer was that he was trying to convince Mr. Devlin to carry on with the file. He also stated that when writing that email, he asked himself what were the most important things to have Mr. Devlin consider. [ 107 ] At 1:44 p.m. on March 19, Mr. Kitching sent Mr. Devlin another email entitled “I think this explains why I don’t feel bound by agreement at jdr”.

In the email, Mr. Kitching listed information about several legal concepts, including duress, undue influence, unconscionable bargain, misrepresentation, and mistake. [ 108 ] Mr. Devlin responded by email to the Settlement Complaint at 2:39 p.m. on March 19. He stated in the email that during the JDR he repeatedly advised Mr. Kitching that he did not have to accept the Settlement Offer. Mr. Devlin provided responses to each item raised by Mr. Kitching: Items #1 and #2: Contributory negligence was not an issue at the JDR and the defence was not seeking any deduction for it. Item #3: Mr.

Devlin obtained the paperwork from Mr. Kitching’s insurers and forwarded them to Mr. Verjee. Mr. Kitching’s classification of disabled by his insurers was referred to in the JDR brief and was one of his strongest arguments at the JDR. Items #4 and #5: Mr. Devlin had not received the Hashman Report in advance of the JDR, and Mr. Verjee did not lie about its contents. The Hashman Report stated that Mr. Kitching did not suffer from any psychological illness as a result of the Accident and if he did this would constitute a compensable injury. Mr. Verjee ultimately did not rely on the Hashman Report and considered Mr.

Kitching as completely disabled for five years. Item #6: Mr. Devlin only asked the questions about Mr. Kitching’s computer use to make sure he was not missing anything. Item #7: Mr. Devlin did not have a report from Dr. Clarke and Dr. Clarke concluded that Mr. Kitching no longer had CRPS. This conclusion was consistent with Dr. Penney and Dr. Hildebrand and inconsistent with Dr. Shah. Dr. Clarke’s conclusion “created a discrepancy in our own experts on this issue if we proceeded to trial.” [ 109 ] Mr. Devlin concluded his reply by stating that Mr. Kitching was bound by the Settlement. Mr.

Devlin considered reneging on the Settlement as unethical and wrote that Mr. Kitching would need to find a new lawyer if he chose that path. [ 110 ] On March 17, 2010, Mr. Devlin wrote a memo to his file that summarizes what transpired at the JDR. The memorandum is consistent with Mr. Devlin’s testimony and includes the following text: Mr. Kitching had numerous opportunities to consider his position and I had advised him on several occasions that he was not bound to do anything at this time and could walk away at any time he wished.

I also indicated to him that if he was not comfortable with making the decision that day that we could call the matter off and simply proceed on to trial. I indicated to him the risks of trial and the fact that he could get more at trial if he was successful, but that there were also numerous downsides, including the risk of costs against him. This discussion was lengthy and repeated many times and I was convinced that Mr. Kitching knew exactly what the situation was and decided that he would make a decision which was informed and reasonable.

The judge agreed with the decision and felt that the amounts were a very reasonable and fair settlement. The matter was concluded on

that basis. [ 111 ] This memo said nothing of the adverse oral report from Dr. Clarke, or indeed any of the specific risks factoring into what he said was his advice to Mr. Kitching at the JDR. However, with uncanny prescience, it addresses the essence of Mr. Kitching’s current complaint, which Mr. Devlin heard at the very earliest, and fairly obliquely, in the March 19 email from Mr. Kitching. [ 112 ] Mr. Devlin testified that he did not write the March 17 memorandum in response to the Settlement Complaint. He relies on the fact that the Settlement Complaint was emailed to him on March 18.

However, the email heading for the Settlement Complaint reads “This is the email attachment from Tuesday, just pasted it right onto email to avoid opening problems”. Therefore, Mr. Devlin may have received the Settlement Complaint by email on March 16. The March 16 email was not presented at trial. [ 113 ] On March 19, 2010, Mr. Verjee gave Mr. Devlin a settlement cheque in the amount of $350,000, to be deposited in Mr. Devlin’s trust account. On March 25, 2010, Mr. Kitching and Ms. Guy attended to Mr. Devlin’s office to sign the settlement documents accepting the Settlement Offer. On March 29, 2010, Mr.

Devlin rendered his final statement of account. The following table reflects the assignments paid out of the settlement funds. ASSIGNMENT AMOUNT Mr. Devlin’s Account (25 percent contingency, other charges, and disbursements including tax). $99,321.77 Cruciate Group – Assignment $4,969.00 BMO Assignment $27,321.77 Dr. Clarke’s IME Fee $2,680.00 Chronic Pain Centre $42.25 Mr. Kitching $215,065.98 I. Factual Findings Concerning the JDR [ 114 ] There is some common ground between Mr. Kitching and Mr. Devlin’s evidence as to what transpired at the JDR. Specifically, both agree that: a.

The JDR took place on March 11, 2010, with Justice Lutz facilitating, among Mr. Kitching, Mr. Devlin, Ms. Guy, Mr. Verjee, and the insurance adjuster. b. The parties broke off into separate rooms after introductory remarks and the negotiation process involved Mr. Devlin shuttling back and forth between the two groups. c. Mr. Devlin reviewed the Hashman Report and discussed its conclusions with Mr. Kitching. d. Mr. Devlin was not able to give Mr. Kitching a specific range as to what he could expect to obtain at trial. e. The defence made veiled references to surveillance of Mr. Kitching and that Mr. Devlin and Mr.

Kitching agreed to disregard it. f. The parties had significant differences as to quantum. g. When an impasse had been reached, Mr. Kitching addressed Mr. Verjee and the insurance adjuster directly, in the presence of Justice Lutz. The groups then broke off again. h. Mr. Verjee advised that he was willing to consider Mr. Kitching as completely disabled for five years following the JDR. i. Mr. Verjee advised that he was prepared to offer $350,000 all-inclusive to settle the claim and that if Mr. Kitching was not satisfied with that, he did not have to take the offer and they could proceed to trial. j.

At various times throughout the process Mr. Devlin and Mr. Kitching spoke with one another and Mr. Devlin gave advice to Mr. Kitching and Mr. Kitching provided Mr. Devlin with instructions. k. Mr. Devlin offered to and did reduce his contingency fee from thirty-five percent to twenty-five percent. l. Mr. Kitching reflected with Ms. Guy over a lunch break on whether to accept the Settlement Offer. m. Mr. Kitching accepted the Settlement Offer. [ 115 ] As mentioned above, there are several key facts over which Mr. Kitching and Mr. Devlin disagree.

Assessment of their respective credibility, therefore, becomes significant. In determining a witness’ credibility, a trier of fact may take into account the witness’ demeanour, appearance of sincerity, strength of memory, ability to describe events clearly and whether the witness has a stake in the outcome of the litigation: KC v College of Physical Therapists of Alberta , 1999 ABCA 253 at paras 75-76 .

Credibility is determined less by a witness’ demeanor and more by gauging such things as the internal consistency of their testimony, its consistency with other evidence, its consistency with out of court statements or conduct of the witness, its reliability and its plausibility in the context of the overall circumstances: D’Amico v Wiemken , 2010 ABQB 785 at para 62 . [ 116 ] The first disagreement is whether Mr. Kitching and Mr. Devlin agreed to attend the JDR to settle one or two heads of damage, or to attempt to settle the entire file.

I find that the parties did not agree that they would not settle anything more than a few items. First, the JDR Brief, with which Mr. Kitching concurred, said nothing about partial resolution, even in the alternative. Although this does not necessarily mean the strategy did not include settling only a few items, if that were the objective it is likely that the JDR Brief would

have been differently structured. Second, Mr. Kitching’s version of his discussion with Mr. Devlin about the content of the JDR Briefsaid nothing about the objective being to not settle more than a few items. Had that been the objective, it would have been a significantpart of a memorable discussion about the content of the draft since (

i) it is quite unusual, and (ii) the matter of which select items lentthemselves to severing and resolving would have taken some time. Third, typically JDRs proceed once all sides desire to and haveauthority to settle entirely. JDRs are no small undertaking and the expense not incurred lightly. That does not mean no one ever goesthrough a JDR for other reasons, intending not to settle, but it is frowned upon by a resource-strapped court. I find Mr. Devlin would nothave proceeded had Mr. Kitching instructed him to pursue resolution only of select heads of damages; he would not have agreed to anysuch approach.

Fourth, Mr. Kitching’s dire financial circumstances motivated him to seek total settlement sooner rather than later. In anyevent, even if they had agreed going in to not settle more than a few items, that strategy was overtaken a number of times by Mr.Kitching’s decision to carry on in discussions of settling the entire case. [117] The second disagreement surrounds what occurred with the Hashman Report. I find that both Mr. Devlin and Mr. Kitching wereaware that Mr. Kitching had attended to be examined by Dr. Hashman, so they both knew of the possibility of evidence in the futurecoming from Dr. Hashman.

The Hashman Report is dated February 24, 2010. The Defence JDR Brief is dated February 25, 2010 andstates: ... the Defendant requested that Mr. Kitching attend an Independent Psychiatric Assessment with Dr. Hashman. While the report has notbeen provided it is anticipated that it will be available in advance of the JDR. I find that Mr. Verjee received the Hashman Report after filing his JDR Brief. I find that Mr. Verjee had opportunity to forward theHashman Report prior to the JDR and also to inform Mr. Devlin of its receipt prior to the JDR, but did neither. I find that Mr.

Devlin wasnot aware of the contents of the Hashman Report until Mr. Verjee tabled it at the JDR. I find that Mr. Kitching was given opportunity tocall off the JDR, or continue, after the Hashman Report was tabled at the JDR. He chose to continue. I find Mr. Devlin regarded it as nothelpful to Mr. Kitching’s case and that he said as much in the private caucuses with Mr. Kitching and Ms. Guy. However, I do not findthat Mr. Devlin erroneously believed the Hashman Report to diagnose Mr. Kitching with a conversion disorder. I also do not find thatMr. Devlin said to Mr.

Kitching “we’re screwed” after reading the Hashman Report. I find that Mr. Kitching was able to read theHashman Report at the JDR and was given opportunity to speak directly with Mr. Verjee about its contents. [118] The third disagreement is whether Mr. Devlin threatened to quit as Mr. Kitching’s lawyer if he did not accept the defence’soffer of $350,000. Under para 11 of the Amended CFA, Mr. Kitching would have been required to pay Mr. Devlin out only if Mr.Kitching decided to assign the agreement.

Clause 13 addresses the scenario where the lawyer decides to terminate the agreement and itdoes not require the client to pay the lawyer out. Mr. Devlin knew that quitting would not have entitled him to a buyout. I find that Mr.Devlin said to Mr. Kitching, among other things, that it would be hard to do much better at trial than $350,000 and, by demeanor if notactual words, he intimated that Mr. Kitching may need to get someone else if he carried it on to trial. I accept that Mr.

Kitching may haveassociated that with an obligation to come up with tens of thousands of dollars he did not have, but if he did make that association it wasnot justified based on the terms of his Amended CFA. [119] The fourth disagreement is whether the defence maintained contributory negligence throughout the negotiation of the JDR. Ifind that it did, right up until the final exchanges of all-inclusive offers. At that point the defence believed contributory negligence posedone of Mr. Kitching’s trial risks.

I so find not from any conclusion that one of the witnesses was more credible than the other on thepoint, but because it is the far more probable stance of almost any such defendant in the circumstances. Those circumstances include, forexample, first, the defence possessing another witness statement from someone independent that was believed to be adverse to Mr.Kitching on contributory negligence and, second, it is more consistent with the other approaches of Mr. Verjee in this settlement context. [120] The fifth disagreement is whether Mr. Devlin told Mr. Kitching he could not win more than $350,000 at trial.

As I indicatedearlier, I find that that Mr. Devlin said to Mr. Kitching that it would be hard to do any better at trial than $350,000. [121] The sixth disagreement is whether Mr. Devlin argued that Mr. Kitching ought to be considered as completely disabled becausehis insurers had considered him as such. On this point I accept Mr. Devlin’s evidence, that he did so and, further, it was a point Mr.Devlin returned to in his separate discussions with Mr. Kitching as operating in his favour. IV Principles of Lawyers’ Professional Responsibilities A.

Lawyer-Client Relationship [122] Lawyers occupy an important role in society by, among other things, helping adversaries resolve disputes civilly. They advocatefor clients who face criminal charges, seek compensation for debilitating injuries, or struggle to preserve a relationship with theirchildren. The quality of a lawyer’s work can affect a client for the remainder of their life. The public deserves a legal profession thatconducts itself with a high degree of integrity, honour and skill. [123] Professional liability of lawyers to their clients may arise in contract, tort, equity, or under statute.

Additionally, law societycodes of conduct regulate a lawyer’s conduct. The many ways a lawyer may be held liable reflect the high obligations they have to theirclient, to the Court, and to society at large. [124] However, lawyers are not held to a standard of perfection. They, like anyone, are fallible. They make difficult judgment calls,often without the benefit of all relevant information and certainly without the benefit of hindsight.

The oft-cited passage of TiffinHoldings Ltd v Millican (1965), 49 DLR (2d) at 218-219 (Alta SC), rev’d (1965), (AB CA), 53 DLR (2d) 674, aff’d (SCC), [1967] SCR 183, captures the standard to which lawyers are held: Lawyers are bound to exercise a reasonable degree of care, skill and knowledge in all legal business they undertake. Their liability arisesout of a contract. The standard of care and skill which can be demanded from a lawyer is that of a reasonably competent and diligent

solicitor. It is not enough to prove that the lawyer has made an error of judgment or shown ignorance of some particular part of the law; itmust be shown that the error or ignorance was such that an ordinarily competent lawyer would not have made or shown it. It is extremely difficult to define the exact limits by which the skill and diligence which a lawyer undertakes to furnish in the conduct ofa case is bounded, or to trace precisely the dividing line between the reasonable skill and diligence which appears to satisfy hisundertaking.

It is a question of degree, and there is a borderland within which it is difficult to say whether a breach of duty has or has notbeen committed... The obligations of a lawyer are, I think, the following:

(1) To be skilful and careful;

(2) To advise his client on all matters relevant to hisretainer, so far as may be reasonably necessary;

(3) To protect the interests of his client;

(4) To carry out his instructions by all propermeans;

(5) To consult with his client on all questions of doubt which do not fall within the express or implied discretion left to him; (6)To keep his client informed to such an extent as may be reasonably necessary, according to the same criteria. [125] Adeshina at para 106 describes the dynamics of the lawyer-client relationship in circumstances similar to this case. Afterreasonable and competent research and diligence, the lawyer should present the client with his or her available options. The client, andnot the lawyer, makes the ultimate decisions as to which option to pursue.

This is because the client knows his or her individual needsand is in the best position to assess his or her interests and select the appropriate course of conduct. The client may place whateverweight he or she wants on the various considerations. In other words, the lawyer advises and the client instructs. B.

Standard of Care Expected under the Retainer [126] A lawyer’s duty under his retainer is to exercise the care, skill and knowledge that a reasonably competent and diligent lawyerwould in similar circumstances: Adeshina at para 108, citing Central Trust Co v Rafuse, (SCC), [1986] 2 SCR 147,Spence v Bell (1982), 1982 ABCA 282 , 39 AR 239 (CA). [127] In a professional malpractice suit, the plaintiff must demonstrate that a lawyer’s failure was not merely an error of judgment, butconstituted actionable negligence: Adeshina at para 159.

This distinction was explained in Folland v Reardon (2005), 74 OR (3d) (CA)at para 44: In accepting the reasonably competent lawyer standard, I do not detract from the often repeated caution against characterizing errors injudgment as negligence. Lawyers make many decisions in the course of a lawsuit. Those decisions require the exercise of judgment.Inevitably, some of those decisions, when reviewed with the benefit of hindsight, will be seen as unwise. The reasonable lawyer standarddoes not call for an assessment of the sagacity of the decision made by the lawyer.

The standard demands that the lawyer bring to theexercise of his or her judgment the effort, knowledge and insight of a reasonably competent lawyer. If the lawyer has met that standard,his or her duty to the client is discharged, even if the decision proves to be disastrous. [128] Lawyers have specific obligations when advising clients whether to accept a settlement. The Alberta Court of Appeal held inWebb v Birkett, 2011 ABCA 13, at paras 54-56, that a lawyer must obtain “sufficient reliable information” in order to advise the client,when in the family law context.

If that information is not complete, the lawyer must advise his or her client that they may be acceptingless or paying more than what would be required according to law. To the extent possible, the lawyer should provide the client with anassessment of the value of what might be lost or paid above what was necessary on the basis of the information then available. Thelawyer should also discuss with the client the reasonableness of the proposed settlement and the pros and cons of that settlement incomparison to other available options. C.

Codes of Professional Conduct [129] The Law Society of Alberta’s Code of Conduct governs the conduct of lawyers within this province. The Code of Conductprovides guidance as to how lawyers should resolve ethical dilemmas, run their practice and manage their relationships with clients, thelawyers and the Court. As stated by Adeshina at para 117, determining whether a lawyer has contravened the profession’s Code ofConduct and is civilly liable remain distinct inquiries. Conformity or non-conformity with an ethical rule may be a factor in determiningwhether a lawyer is negligent, but it is not determinative.

V Expert Opinion Evidence [130] In Tran v Kerr, 2014 ABCA 350, the Alberta Court of Appeal explained at paras 21 to 23 when expert opinion evidence isnecessary in a professional malpractice action. The Court held that since all judges were once lawyers, a trial judge may take judicialnotice of the standard of care in cases where the court as an institution could make a finding of the standard of care. It follows that a trialjudge may not take judicial notice of the standard of care when the issue concerns a specialized practice area or is highly technical innature. [131] This case concerns the conduct of a perso

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