Chudy v. Merchant Law Group

2007 BCSC 279 and 2008 BCCA 484

NST successfully represented the plaintiffs through a lengthy trial and appeal, by which the court set aside a contingency fee agreement with the defendant law firm and awarded the return of legal fees paid to the defendant, together with special costs and considerable punitive damages.

The plaintiff, who was involved in a serious motor vehicle accident, settled his claims (including those of his wife) for $860,000 plus costs and disbursements. The plaintiffs executed a contingency fee agreement whereby the defendant law firm was to retain 30 per cent of the settlement. However, it was later discovered that the “lawyer” performing their legal work had been refused a license to practice law by the British Columbia Law Society and was acting only as a legal assistant. The Court found that the defendant law firm had breached fiduciary duties owed to the plaintiffs, and that the contingency fee agreement must be set aside. The Court further held the defendant law firm was not entitled to a fee because of their improper conduct.

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