SETTLEMENT OF PERSONAL INJURY CLAIMS

ON BEHALF OF PERSONS UNDER A DISABILITY

Presented at The Middlesex Law Association and the Ontario Bar Association
"Deal or No Deal: Assessment of Damages" Conference
November 1, 2007

Submitted by: Andrew C. Murray

Lerners LLP
Barristers & Solicitors
PO Box 2335
London Ontario N6A 4G4
Phone: 519.640.6313
 INDEX

Introduction 1
.................................................................................................................................

The Historical Context 1

The Current Regime -/•u/es of Girl Procedure 4
Issues 5
.........................................................................................................................................

(a) Required Evidence 6

(b) Legal Fees .....................................................................................................................
8
(c) Use of Settlement Funds 16
(i) Registered Education Savings Plan 17
(ii) Structured Settlements. 20
(d) The Children's Lawyer 21
(e) Public Guardian and Trustee 23
Practice Points 23
.........................................................................................................................
 INTRODUCTION

This paper reviews the past and current approach to the settlements of claims on behalf of
minors and mentally incapable people. In particular, it considers the evidence required to allow
the Court to determine if the proposed settlement is in the best interests of the claimant; and the
reasonableness of solicitor fees for services. It will suggest best practices for applications
under Rule 7 of the Rules of Civil Procedure. While this paper is not a direct response to cases

like Marcoccia v. Gill or Lau v. Bloomfield 2, by necessity, several of the problems identified in
these decisions will also be reviewed and discussed here.

THE HISTORICAL CONTEXT

The requirement for Court approval of settlements made on behalf of parties under a disability is
derived from the Court's parens patriae jurisdiction. The parens patriae jurisdiction is of ancient
origin and is "founded on necessity, namely the need to act for the protection of those who
cannot care for themselves...to be exercised in the best interest of the protected person, for his

or her benefit or welfare". 3

Black's Law Dictionary describes "parens patriae" on the following terms:

"Parenspatriae", literally "parent of the country", refers traditionally
to role of state as sovereign and guardian of persons under legal
disability. State of W. Va. v. Chas. Pfizer & Co., C.A.N.Y., 440
F.2d 1079, 1089. It is a concept of standing utilized to protect
those quasi-sovereign interests such as health, comfort and
welfare of the people, interstate water rights, general economy of
the state, etc.

unreported decision of The Honourable Justice Wilkins released January 2, 2007

2 unreported decision of The Honourable Justice Spies, dated August 24, 2007
3 Re Eve, [1986] 2 S.C.R. 388 at para.73. Also see,
Franklin (Litigation Guardian of) v. Neimstein & Associates, [2000] O.J. No. 4192 (C.A.)
Tsaoussis v. Baetz (1998), 41 O.R. (3d) 257 (C.A.)
Re Woo, 2006 CanLII 16344 Ontario C.A. at para.10
 -2-

Parens patriae originates from the English common law where the
King had a royal prerogative to act as guardian to with
legal disabilities such as infants, idiots and lunatics. 4 persons

The requirement for Court approval of settlements involving parties under disability has now

been codified in Ontario by the creation of Rule 7.08(1) of the Rules of Civil Procedure:

No settlement of a claim made by or against a person under

disability, whether or not a proceeding has been commenced in
respect of the claim, is binding on the person without the approval
of a Judge.

This rule codifies what was historically the practice in all infant settlements (now more properly
described as a settlement on behalf of a party under a disability). For centuries, Judges of the
Superior Court have exercised the parens patriae guardianship of the sovereign to ensure that
the rights of infants and others legally disabled are protected. •

Similarly, Rule 7.09 was also a codification of the previous practice relating to the payment of
money into Court. Rule 7.09 provides:

MONEY TO BE PAID INTO COURT

7.09 (1) Any money payable to a person under disability under an
order or a settlement shall be paid into Court, unless a judge
orders otherwise.
(2) Any money paid to the Children's Lawyer on behalf of a
person under disability shall be paid into court, unless a judge
orders otherwise.

4 Black's Law Dictionary, Definitions of the Terms and Phrases of American and English Jurisprudence, Ancient and Modern, Henry Campbell Black, Fifth Edition,
St. Paul Minnesota West Publishing Co. 1979
5 Ruetz Morscher and Morscher (1996) 20 O.R. 3rd 545, decision of Justice Salhany O.C.G.D.
 -3-

Under the Rules of Practice, multiple rules addressed cases involving minors and mentally
incapable persons, although no rule specifically dealt with the approval of settlements in
personal injury claims, as is now provided by Rule 7. 6

The rationale behind the requirement for Court approval, and the payment into Court of funds on

behalf of a party under a disability, was succinctly described by Justice Quinn in Hoad v.

Giordano as follows:

Our courts are vigilant when it comes to the best interests of

children; and this paternalism, unfortunately, is necessary.
Anyone with experience in trying or hearing matrimonial cases
knows that parents often act in a manner which is not in the best
interests of their children. do-not think it is necessary for me to
select my words with any delicacy here and so say, quite directly,
that, in my view, subrules 7.08(1) and (2) and 7.09(1) are part of
the law of this province because parents cannot always be trusted
to do what is best for their children. Undoubtedly this statement
will be galling to the caring, thoughtful, wise and understanding
parent. However, the fact is that most laws are aimed at those
inclined to break them. •

It is suggested that the parens patriae jurisdiction of the Court is not intended to see persons
under disability treated differently than persons capable of instructing counsel after due
consideration of all matters relevant to settlement. Rather, the purpose is to ensure that
vulnerable claimants are not taken advantage of by others. Reasonable terms of settlement,
whether on the matter of quantum of damages or the reasonableness of fees, should be
considered objectively, based on the reasonable person standard.

6 the following Rules of Practice: Rule 18 Minors, Rule 19 Recovery of Goods Land From Minor, Rule 20 Tort or Money Claim Against Minor, Rule 21
Mental Incompetent, Rule 22 Litigation Guardian, Rule 92 Litigation Guardian, Rule 93 Appointing Litigation Guardian, Rule 94 Appointing
Litigation Guardian, Rule 95 Mental Incompetent, Rule 96 Mental Incompetent, Rule 97 Mental Incompetent, Rule 98 Mental Incompetent or
Absentee, Rule 99 Person Declared Incapable, Rule 100 Consent of Litigation Guardian
7 Hoad v. Giordano, [1999] O.J. No. 456
 THE CURRENT REGIME RULES OF CIVIL PROCEDURE

Rule 7.08(4) sets out the material that is required to be placed before a Judge on a motion or an

application for the approval of a proposed settlement on behalf of a party under a disability. It
shall include:

an Affidavit from the Litigation Guardian which sets out the material facts and the

reasons that support the proposed settl.ement, along with the Litigation Guardian's
position concerning the proposed settlement;

an Affidavit from the solicitor that sets out the solicitor's position in respect of the
proposed settlement;

if the party is a minor between the ages of 16 and 18, that minor's consent in writing;
and

a copy of the proposed Minutes of Settlement.

There is no specific mention in Rule 7 neither permissive language nor prohibitory language
with respect to the issue of legal fees that may be charged by plaintiff's counsel in connection
with a proposed settlement. With regard to legal fees, one issue is whether lawyers acting for

persons under disability ought to be compensated on some basis different from that used for
clients not under disability.

The Rule has no specific directive with respect to structured settlements as they relate to parties
under a disability.

There is .no specific provision dealing with the intended manner of holding the settlement funds
on behalf of the party under a disability.
 -5-

Rule 72.02 deals with payment into Court, but it only deals with the procedure to be followed
when making a payment into Court. It does not itself outline when or why money should be paid
into Court.

Rule 7.09, already described above, is the provision which directs that money payable to a
person under a disability shall be paid into Court, unless a Judge orders otherwise. There is no
rule describing when Judges ought to exercise their discretion to order otherwise, and very little
case law on the point. Despite this, Courts have readily accepted structured settlements as a

preferred vehicle for managing settlement funds on behalf of persons under disability.

Although motions for approval under Rule 7 occur daily at courthouses across the province,
there are surprisingly few decisions dealing with Rule 7. The commentary in Watson &
McGowan's 2007 text on Ontario Civil Procedure only mentions two cases dealing with Rule
7.09. 8 It appears that different practices and protocols have developed in various regions of the
province. 9 There should be more consistency to the practice and procedure for obtaining court
approval, though the effort involved should always be proportionate to the interests at stake.

ISSUES

There are a number of issues worthy of mention in a discussion paper dealing with the
settlement of actions on behalf of parties under a disability, which include:

(a) Required Evidence for Court approval --The scope and clarity of material to be
provided to the Court on a motion under Rule 7 for approval of a proposed
settlement;

8 See Martin v. Robins, March 6, 2006, unreported decision of Justice Quinn

Hoad v. Giordano(1999), 30 C.P.C. (4th) 59
9 For example, Alberta has enacted legislation called "Minors' Property Acf', in which s.4 deals with the settlement of minors' claims. In Nova Scotia,
some case
law refers to the solicitor's account, in connection with minor, being sent to an Assessment Officer for taxation, even if valid Contingency Fee
Agreement is in place.
 -6-

(b) Legal fees Appropriate compensation for legal fees for services rendered to

persons under disability;

(c) Use of the settlement funds --The appropriateness of a practice direction

specifically dealing with the circumstances in which it might be preferable for a

Judge to "order otherwise" and have monies directed somewhere other than
being paid into Court;

(d) The Children's Lawyer/Public Guardian The extent of the role of the
Children's Lawyer and/or Office of the Public Guardian and Trustee;
(e) Procedure The preferred procedure for obtaining the Court's approval
should there be hearings in open Court, an attendance in Judges' Chambers, or

basket motions?

(a) REQUIRED EVIDENCE

Affidavit material filed in support of the application must be sufficient to allow the Court to make

a final determination of all the matters in issue. Consequently, the evidence presented to the
Court must be comprehensive, thoroughly covering all matters which might impact on

determining if the proposed settlement is in the best interests of the disabled party. As stated
above, the requirements for Court approval ought to be proportionate to the interests involved.
That is, for approval of small Family Law Act claims, particularly those involving deductibles
under the Insurance Act, the expense involved in obtaining Court approval ought not to be
disproportionate to the damages recoverable.

Where the person under disability is the main party and has suffered more substantial damages,
more ought to be required by the Court. It is recommended that, at a minimum, the solicitor's
 -7-

Affidavit, when setting out the solicitor's position in respect of the proposed settlement in these
cases, ought to include a narrative discussion addressing the following issues:

liability, including the positions taken by all parties to the proceeding, supported by
documentation in support of the various positions.

a discussion of the treating, consulting physician and experts' opinions, both plaintiff and
defence, with respect to the nature of the injury/disability, the long-term prognosis, the
need for future care, the possibility of a reduction in income-earning potential.

where appropriate, detailed description of the position taken by .the defence on

damages, including excerpts from discovery transcripts and other evidence relied on to
resist the plaintiff's claim•

where appropriate, a description of all the steps taken in the proceeding to advance the

plaintiff's case (including motions, interviews with witnesses, consultations with experts,
mediations, pre-trials, and other developments)=

recommendations for the distribution and use of the settlement funds, along with detailed
evidence supporting and justifying the use of the settlement funds proposed=

the intended retainer agreements, as entered into by the Litigation Guardian and the
plaintiff's solicitor, should be included in the material.

The intended fees to be charge to the disabled person and sufficient support to justify
the fees.
 -8-

(b) LEGAL FEES

In Ontario, prior to the introduction of contingency fees, the courts had recognized the
appropriateness of allowing lawyers to be awarded legal fees over and above the partial
indemnity costs paid by the defendant, in cases involving persons under disability.

The principles that apply to lawyers' fees in cases involving persons under disability ought to be
the same as those cases involving competent persons. Rule 7 and the parens patriae
jurisdiction of the Court was not intended to confer a benefit on the disabled by making their
legal fees lower than others. Rather, the protection afforded should ensure that the disabled are

not disadvantaged when compared to those capable of instructing counsel.

It has also been recognized by our Courts that personal injury litigation is inherently risky.
Persons under disability inevitably are unable to fund their litigation and would be without
adequate remedies if capable lawyers were unwilling to represent them and assume the
economic risk of prosecuting their claims. Madam Justice Thorburn had the following to say
about fees in personal injury matters:

"...it is easy after the fact to underestimate the risk faced by the
solicitor in accepting the retainer and the contribution made by the
solicitor. There is an element of uncertainty in plainti•'s personal
injury work that may entitle a plaintiff's solicitor to compensation
over and above the value of the time spent calculated on the basis
of docketed time.

Some cases are lost or settled for very small amounts. In other
cases solicitors investigate and assess prospective claims and
advise clients who do not pursue a claim. In some cases the
circumstances change significantly during the litigation. In many
cases the solicitors carry cases for lengthy periods. Some cases
will be tried in which case the financial risk taken by the solicitors
increase dramatically. In many of these circumstances there is a
substantial risk that the plaintiff will be awarded little or nothing
and that the solicitors will be paid nothing.
 -9-

It is important that the fees must also be fair to the solicitor so as

to ensure that persons under a disability have access to
competent legal counsel who will be able to vigorously purs[u]e
the claim on behalf of the person under a disability. "1°

These more recent comments from the bench are supported by older jurisprudence. The 1990
decision of Justice Osborne in Stribbell v. Bhalla 11, which dealt with a minor plaintiff who
successfully claimed damages for medical malpractice, is a noteworthy starting point for any
discussion dealing with claims by solicitors for legal fees in an amount that exceeds the party
and party costs/partial indemnity costs provided by the defendant.

It is important to observe that Justice Osborne's decision was rendered at a time when
contingency fees were not legal, per se, in Ontario. Stribbell v. Bhalla is a carefully worded
decision that skirted the reality of outcome-based fees in high-risk litigation advanced on behalf
of parties under a disability. Justice Osborne considered the factors identified by the Ontario
Court of Appeal in Cohen v. Kealey 12 when determining the proper quantum of a solicitor's legal
account:

The taxing officer properly listed the considerations normally

applicable to the taxation of a solicitor's account, namely, the time
expended by the solicitor, the legal complexity of the matters to be
dealt with, the degree of responsibility assumed by the solicitor,
the monetary value of the matters in issue, the importance of the
matter to the client, the degree of skill and competence
demonstrated by the solicitor, the results achieved, the ability of
the client to pay, and the client's expectation as to the amount of
the fee.

Ultimately, Justice Osborne held:

Justice requires that deserving actions be prosecuted by

competent counsel, and competent counsel are entitled to be paid
a reasonable fee for the value of the work done think that,

10 See endorsement of Madam Justice J.A. Thorburn in Rivera LeBIond, Court File No. 04-CV-281278CM2, March 6, 2007.
11 (1990), 73 O.R. (2d) 748
12 (1985), 10 O.A.C. 344
 -10-

when the entirety of the circumstances surrounding this litigation

are considered, plaintiffs' counsel are entitled to a fee above party
and party costs.

The Court of Appeal specifically endorsed Justice Osborne's decision in Stribbell v. Balla, in its
own decision, Desmoulin v. Blair 13

The Court of Appeal, in addition to the factors that had been mentioned in Cohen v. Kealey,
recognized that, implicit in the phrase "degree of responsibility assumed by the solicitor", is the
risk of non-payment, should the action not succeed.

The Ontario Court of Appeal considered the issue once again in Re Christian Brothers of Ireland

and Canada. 14 The Court of Appeal considered whether or not a premium ought to be paid to
the law firm that advanced the claim on behalf of the plaintiffs who "suffered unspeakable acts
of sexual, physical, and emotional abuse" at the hands of the Christian brothers. The Court of
Appeal said:

But as as their interests, are, they must be balanced

important
againstthe risks that the law firm undertook and the result it
achieved for its clients and, therefore, for the victims. The reality
is that, but for (the plaintiffs' counsel) having assumed this risk,
the estate would have had no money at all to compensate the
victims.

The risks faced by personal injury lawyers are substantial in many cases. Without a premium
earned in cases with a more certain outcome, plaintiff lawyers will have to decline those with

less certain outcomes, depriving some persons under disability of access to justice. In the

context of motor vehicle litigation, the lawyer faces additional risks associated with liability
limiting rules. Claimants face a verbal threshold 15 in automobile accident cases. Injuries which

13 (1994), 21 O.R. (3d) 217

14 [2003] O.J. No. 4249
15 SeeSection 267.5 of the Insurance Act, R.S.O. 1980, C. I-8, as amended. The threshold is permanent serious disfigurement or permanent serious impairment
of an important physical, mental or psychological function. The threshold is defined in Ont. Reg. 381/03.
 -11

fail to meet the threshold result in no compensation for pain and suffering. Even if the threshold
is met, the award is reduced by a substantial deductible 16. Both increase the risk for plaintiff's
counsel. Tort claims arising out of automobile accidents ordinarily require the lawyer to assume

carriage of the plaintiff's claim for first party (no-fault) benefits. Prior to litigation being
commenced, there is no obligation for the first party insurer to pay any legal costs associated
with this time consuming and expensive service provided to the claimant. Moreover, while it is
frequently in the best interests of the injured party to receive a lump sum on account of future
entitlement to first party benefits, insurers have no obligation to lump out these benefits. Even-
when insurers are persuaded, they are not obliged to pay legal costs.

Perhaps the greatest risks faced by plaintiff's counsel is in the context of medical malpractice
litigation. The financial commitment in terms of disbursements and time is enormous. The
outcome, particularly at he outset, is most uncertain in the vast majority of cases. But for the
few competent counsel willing to assume carriage of these highly volatile cases, few would gei
access to justice. Even fewer will get access to justice when counsel cannot reasonably predict
what feescan be charged in the event of a successful outcome for the plaintiff.

Acting for I•ersons under disability is inherently more expensive than acting for competent
claimants. There is also more responsibility for the lawyer. Offers to settle, agreements on

damages and other steps taken to save costs or expedite the proceedings require extra steps
and the expense of Court approval. Instructions though taken from a litigation guardian, must
be passed by the Children's Lawyer or the Public Trustee and ultimately the Courts. In seeking
Court approval at any stage great care must be taken by the lawyer not to disclose information
that might have a detrimental impact on the disabled person's case. Justifying a compromise of
the plaintiff's claim requires a clear explanation of the difficulties leading to a compromise.

16 The deductible non-pecuniary general damages is $30,000, unless the claim is assessed over $100,000.
 -12-

Consideration must be given to taking the extra step of sealing the Court file. These are matters
that do not arise when the plaintiff is competent.

The matter of legal fees will also present practical matters for lawyers who consider
representing persons under disability. If there is uncertainty about legal fees, potentially
legitimate claims may not be pursued. For example, lawyers will be discouraged from pursuing
derivative Family Law Act claims for persons under disability. This is an access to justice issue.
For all practical purposes, these claims cannot be pursued without a lawyer willing to underwrite
the cost of and take the risk associated with them. Uncertainty about fee arrangements will
deprive these claimants of access to justice.

Personal injury litigation for persons under a disability require lawyers to take on cases on

behalf of impecunious plaintiffs with the ability to recover fees only from a favourable settlement
or judgment. This applies to both fees and to disbursements. Disbursements are paid by the
lawyers to third parties from the outset of litigation that can take many years to resolve or reach
trial. The result for the lawyer is a delay in payment for many years and the risk of non-payment
if success is not achieved, giving rise to a need to provide an incentive to plaintiff's counsel
factors recognized by the Supreme Court of Canada in Walker v. Ritchie. 17 As well,
encouraging competent counsel to act on behalf of personal injury clients (by allowing a

premium to be charged) has been recognized as one rationale for contingency fees. 18

Whether legal fees are paid pursuant to a contingency fee arrangement or solicitor client fees
are paid over and above partial indemnity costs collected, the payment of these amounts are

deducted from the claimants recovery. This fact ought not to have a bearing on the
reasonableness of the legal fees. "The reality is that a plaintiff will never recover 100% of an

17 Walker v. Rltchle, [2006] S.C.J. No. 45, at paragraph 39.

18 Ibid, paragraph 40
 -13-

award or settlement because there will always be fees to be paid. "19 As well, the matters of risk,
potential divided liability, the interests of avoiding a costly trial and the potential matter of
inadequate insurance limits have the same effect on the claimant. Moreover, a settlement,
which is ordinarily a result of negotiation, will not be achieved without some compromise.

The reasonableness of result-based lawyers' fees for persons under a disability is reinforced by
recent legislative changes permitting contingency fees. By way of amendments to the
Solicitors Act •°, in 2002, Contingency Fee Agreements were formally introduced into Ontario
with a very specific framework developed for their implementation. Ontario Regulation 195/04
was later introduced to provide further regulatory direction with respect to the implementation of
contingency fees ("Contingency Fee Regulation").

Section 5 of the Contingency Fee Regulation specifically addresses Contingency Fee

Agreements as they pertain to persons under a disability. It states:

5(1) A solicitor for a person under a disability represented by a

litigation guardian with whom the solicitor is entering into a
contingency fee agreement shall,
(a) apply to a judge for approval of the agreement before the
agreement is finalized; or
(b) include the agreement as part of the motion or application for
approval of a settlement ora consent judgment under rule 7.08 of
the Rules of Civil Procedure.

Earlier case law remains helpful for identifying the appropriate principles that should be applied
when determining the fees to be approved for a solicitor; however, those earlier cases must now

be read in light of the reality that the contingency fee regime has brought to the province.
Contingency Fee Agreements, in one sense, simplify the process, while at the same time
complicate it in terms of the documentation that is required in order to satisfy the Court that a

19 Madam Justice Toscano Roccamo in Williams Bowler, 2006 CanLii 19466

 -14-

particular Contingency Fee Agreement is appropriate. Section 5 provides legislative approval of

contingency fees for persons under disability, while preserving the right for judicial review and
approval.

Some concern has been raised by Judges in the province of Ontario, and perhaps by officials
with the Children's Lawyer's Office and the Office of the Public Guardian and Trustee, is that
plaintiff's counsel are not properly documenting retainer agreements which intended to
document a contingency fee retainer. Greater care must be taken to properly document fee
arrangements. Contingency fee arrangements should follow the guidelines as set out by the Act
and Regulations. Other fee arrangements should be sufficiently particularized in a retainer or in
correspondence to the client.

Attached to this discussion paper at Tab 1 is the entire Solicitors Act, with Section 28.1 being
the relevant section as it relates to Contingency Fee Agreements. Also attached at Tab :2 is the
Contingency Fee Regulation in its entirety.

As a matter of policy there is no reason to treat parties under a disability any differently from
competent plaintiffs in terms of the appropriateness of compensation for counsel, without whose
efforts the party under a disability would surely be unable to advance a case. A minor plaintiff,
like any other plaintiff, is entitled to full but fair compensation. The parens patriae jurisdiction
should not expand that entitlement. The parens patriae jurisdiction does not enable the Court to
create a different compensation regime.for minor plaintiffs. The Court must protect the minors'
best interests, but it must do so within the established structure for the compensation of
personal injury claims. 21

20 R.S.O. 1990, c.S.15, as amended

21 Tsaoussis Baetz, supra, at para. 29
 -15-

It may be an attractive concept to preserve money that might be needed for future care costs,
by restricting the quantum of legal fees to be paid to the solicitor, but there is not a sound
reason to do so when one considers the following:

Often there can be a problem with insurance policy limits, such that the only money
available to respond to the claim is inadequate because the tortfeasor was underinsured.

Problems with witnesses, risk adverse plaintiffs, and a myriad of other problems often
result in settlement proposals that are less than 100% of the plaintiff's damages.

Very often, the injured plaintiff shares blame for the accident, to a greater or lesser
degree, such that, as a result in the split in liability, there will not be adequate funds to
ensure the continued care of the plaintiff.

The rationale behind Rule 7 is to ensure that minors and mentally incapable people are

not taken advantage of because they are not in a position to look out for their own

interests. Rule 7 was not, however, designed to give persons under a disability a better
deal on legal fees than other claimants. Whether a plaintiff is 17 years old or 19 years
old should not be determinative of the legal fees to be paid at the successful conclusion
of the case to the plaintiff's lawyer.

The Office of the Public Guardian and Trustee itself charges fees for its involvement.
See the attached approved fee schedules at Tab 3.

In motor vehicle matters, a sizable portion of a settlement can be funded by an accident

benefit insurer, which often has no obligation to make any contribution towards legal
fees (and often requires a discount to achieve a lump sum settlement of past and future
entitlement).
 -16-

If solicitors wish to assert a claim for fees based on a contingency fee retainer, careful attention

and care should be paid to the provisions of the Solicitors Act and Contingency Fee Regulation
to ensure that the parties have indeed entered into a valid Contingency Fee Agreement.
Consideration should be given to an application to a Judge for approval of the agreement before

the agreement is finalized, rather than waiting until the conclusion of the case to have the

agreement approved as part of the Rule 7.08 approval process. Where a contingency fee is not

used, if a retainer arrangement for a minor is consistent with retainers entered into by adults,
these retainers should be approved.

There ought to be certainty and predictability of compensation for legal fees. Contingency fee
arrangements or reasonable retainer agreements provide for predictability. As well, the process
ought not to be so cumbersome as to discourage representation of persons under a disability or

unduly increase the cost associated with acting for these claimants.

(c) USE OF SETTLEMENT FUNDS

In Martin v. Robins 22, Justice Quinn analyzed the routine practice of paying money into Court for
minors. He remarked in a footnote to his judgment:

In my little corner of the judicial world, it was unknown to me that

the accountant charged fees in relation to money paid into court
for minors, and admit to being surprised by the knowledge.
understand that the charging of fees started in May 2000, but
expect that the practice is not widely known by members of the
judiciary. A settlement for a minor usually is in respect of a
tragedy, a misfortune or some other loss suffered by the minor.
Historically, payment into court of such settlements has been
treated as virtually compelled by the Rules of Civil Procedure. At
least as long ago as 1943, then Rule 5.35 of the Ontario Annual
Practice provided, "a judgment for the recovery Of money on
behalf of an infant.., shall direct the money to be paid into court".
The discretion, "unless the court orders otherwise", in subrule
7.09(1), entered the Rules in 1985.

22 Martin Robins, supra

 -17-

Having regard for the careful judgment rendered by Justice Quinn, one must ask under what

circumstances it would be appropriate to have funds paid into Court as opposed to being held
outside of the Court in some other safe investment vehicle. A party who does not suffer from a

disability within the meaning of Rule 7 would be reluctant to have his or her money paid to the

Accountant and would wish to explore alternatives. There are several alternative arrangements,
depending on the circumstances of the case, that make sense when dealing with a minor and
which ought to be dealt with either by way of practice directions or amendments to the Rules.
Appropriate alternatives include:

(i) Registered Education Savings Plan

In the case of minors, or at least those with the potential of proceeding on to post-secondary
education, one alternative investment arrangement for a portion of settlement monies is a

Registered Education Savings Plan. A Registered Education Savings Plan is a type of a

savings account that grows tax-free until the child is ready for post-secondary education. It also
allows for a parent to apply on behalf of a child for the Canada Education Savings Grant.
Attached to this paper at Tab 4 is a list of "Frequently Asked Questions" produced by Human
Resources and Social Development Canada, the federal government ministry which oversees

this program. Money put into a Registered Education Savings Plan is eligible for the Canada
Education Savings Grant, which provides a minimum of at least 20% matching, funds on the first
$2,000.00 of annual RESP savings made on behalf of a child, ie. if a $2,000.00 contribution is
made for a child, the government will provide a grant of at least $400.00. Attached at Tab 5 is a

supplementary document from the Human Resources and Social Development Canada website
which gives particulars of the Canada Education Savings Grant.

Obviously, a 20% return on the first $2,000.00 deposited into an RESP is a far better rate of
return than the children would recover by having their money paid into Court.
 -18-

have successfully obtained approval of this on several occasions. Attached at Tab 6 is the
endorsement of Justice Granger in Foster v. Foster, an unreported decision dated August 23,
2007 where Court approval w•is granted for an RESP.

In Hoad v. Giordano, Justice Quinn was asked by a parent to have the entire settlement
proceeds of $14,750.00 paid to the child's father. The only reason advanced as to why the
settlement funds should not have been paid into Court was the father's belief that he could get a

higher rate of return. He did make mention to the Registered Education Savings Plan, but did
not appear to provide enough evidence to convince Justice Quinn that the father's proposal was
a good one. Notwithstanding this decision, it would seem appropriate to develop a Practice
Direction, or, alternatively, a sanctioned pronouncement from the Children's Lawyer, dealing
with the circumstances and appropriateness of having a portion of settlement monies on behalf
of a minor paid into a Registered Education Savings Plan.

Justice Quinn, in disposing of the application, also provided a very helpful list of questions to be
answered by the Litigation Guardian whenever it is proposed that monies be paid somewhere
rather than into Court. His list is as follows:

(a) Why is the litigation guardian opposed to payment of the funds into court?

(b) Is there evidence that the litigation guardian has the ability to manage the
funds.•

(c) What are the financial circumstances of the litigation guardian including
his or her income and expenses, and the number of dependents for
whom he or she is responsible?

(d) What is the plan advanced by the litigation guardian for the management
of the funds?
 -19-

(e) What are the merits and demerits of the plan?

(f) What criteria will be employed for periodic encroachments, if any?

(g) What is the likelihood that the funds (or the remaining balance, if there
have been encroachments), plus accrued interest, will be secure until the
minor attains his or her majority?

(h) Does the plan permit a transfer to the minor of the balance of the funds
immediately upon the attainment of his or her majority?

(i) What is the amount to be managed?

(j) What is the duration of the plan?

(k) Should the litigation guardian be required, at some point, to pass

accounts in respect of his or her management of the funds?

Should the litigation guardian be required to post a bond as security for

the performance of his or her duties in the management of the funds?

(m) What are the views of the child (to the extent that he or she is of an age
where such views can reasonably be ascertained)?

(n) If there is a request for part of the funds to be transferred to the litigation
guardian now (with the balance to be paid into court), are the requested
funds to be used for the direct and reasonable benefit of the child and in
circumstances where the parents of the child are unable to meet the

expense involved? [See Note 2 below]

 20-

(o) In all of the circumstances, has the litigation guardian established, on a

balance of probabilities, that it is in the best interests of the minor that

payment be made to the litigation guardian rather than into court?

Note 2: mention this since Mr. Hoad made a passing reference to the purchase of a computer
for Thomas.

(ii) Structured Settlements

Section 116 of the Courts of Justice Act •3 already deals with periodic payment and a review of
damages. If the plaintiff requests that an amount be included in the award to offset any liability
for income tax on income from the investment of the award, the Court shall order the defendant

to pay all or part of the award periodically. 24 This also serves to override the 1992 decision of

Kendall (Litigation Guardian of) v. Kindl Estate 25 which held that the Court's parens patriae
jurisdiction did not provide jurisdiction to order an unwilling defendant to enter into a
structured
settlement on behalf of a minor plaintiff.

Mr. Justice Wilkins expressed some concern in Marcoccia v. Gill about the process for
arranging structured settlements and the extent of the details disclosed to the Court concerning
the choice of annuity. If lawyers and litigation guardians provide the Court with sufficient detail
about the structure options available to the person under disability and a reasonable rationale
for choosing the particular annuity, .there ought to be little second-guessing by the Court.

Many of the cases that come before the Court arise within the context of a motor vehicle
accident. Ontario Regulation 461/96 deals with Court proceedings for automobile accidents that

23 R.S.O. 1990, c.C.43

24 s.116(1)(b)
25 10 C.P.C. (3d) 24
 -21

occur on or after November 1, 1996. Section 6 has been drafted to specifically deal with
structured settlements and provides:

6.(1) The court shall order that an award for damages for
pecuniary loss be paid periodically under section 267.10 of
the Act if two or more of the following circumstances exist:
1. The award, including prejudgment interest but
excluding costs, is for $100,000 or more.
2. On the date of the order, the plaintiff is less than 18
years of. age.
3. The court is satisfied that the plaintiff has no other
means to fund his or her future care.

4. The court is satisfied that the plaintiff is not likely to

manage the award in a prudent manner.
(2) Subsection (1) does not apply if the court is satisfied
that,
(a) sufficient funds to pay the award periodically are not
available under a motor vehicle liability policy; or
(b) an order to pay the award periodically would have the
effect of .preventing the plaintiff or another person from
obtaining full recovery of a claim arising out of the incident.

The recently amended Section 116.1 of the Courts of Justice Act now also specifically provides
for a mandatory structured settlement regime for medical malpractice cases where an award for
future care costs of the plaintiff exceeds $250,000.00. The full text of Section 116.1 of the
Courts of Justice Act is attached to this paper at Tab 7.

(d) THE CHILDREN'S LAWYER

The Ministry of the Attorney General website indicates that the origin of the Office of the
Children's Lawyer in Ontario can be traced back to as early as 1826, when the Lord Chancellor
of Upper Canada appointed a leading member of the legal bar to be guardian ad litem of minors
when they were being sued, and to represent their interests in Courts.
 22

In civil cases, the Office of the Children's Lawyer reviews proposed settlements referred by the
Courts in cases involving minors. The Children's Lawyer assesses whether the proposed
settlement is in the best interests of the child and reports to the Court.

The Children's Lawyer also has responsibilities and property rights cases, estate/trust cases,
personal rights cases, child protection cases, and child custody and access cases.

Rule 7.08(5) of the Rules of Civil Procedure provides, that notice to the Children's Lawyer or the
Public Guardian and Trustee, as the case may be, is not an automatic requirement for the
approval process. Rather, the Judge reviewing the matter may direct that the material be

served on the Children's Lawyer or the Public Guardian and Trustee, and may direct either
office to make an oral or written report stating any objections to the proposed settlement.

Anecdotally, it is clear that neither office has adequate resources to become involved with each

and every approval that comes before the Court. Indeed, often times the delay that results from
the involvement of either the Children's Lawyer or the Office of the Public Guardian and Trustee

can be considerable. Further, some of the people called upon to assess the reasonableness of
the settlement may be insufficiently experienced.

It would certainly be preferable to involve the Children's Lawyer or Public Guardian and Trustee

on an infrequent basis, perhaps with novel matters or other unusual circumstances that truly
necessitate their involvement.

(e) PUBLIC GUARDIAN AND TRUSTEE

The Ministry of the Attorney General website indicates that the Office of the Public Guardian

and Trustee is part of the Family Justice Services Division of the Ministry of the Attorney
General. It is responsible for protecting mentally incapable people, protecting the public's
interest in charities, searching for errors, investing perpetual care funds, and dealing with
 23

dissolved corporations. The website further describes a tradition, for more than 500 years, of
English common law, giving governments a special responsibility to protect the interests of
mentally incapable adults,, children, and charities, which tradition has continued in Canada.

The Office of the Public Guardian and Trustee also operates the Accountant of the Superior
Court of Justice. A schedule of fees charged by the Accountant has been established pursuant
to the Public Guardian and Trustee Act. 26

Attached at Tab 8 is a paper and checklist prepared by Laurie Redden of the Public Guardian

and Trustee which addresses the Public Guardian and Trustee's role in Rule 7 approval
motions. 27

PRACTICE POINTS

In no particular order, offer these practice points to you for your consideration:

It is not my practice to serve defence counsel with motion material that have prepared
in connection with a Rule 7 motion for approval. The exception to this is that do share

any Minutes of Settlement that need to be jointly executed. This is particularly important
with structured settlements, as there is very precise language that must be employed in
order to ensure the Canada Revenue Agency tax-free status of the structure.
Nonetheless, as a general rule, do not provide my supporting Affidavit material to
defence counsel. The justification for this decision is that service on the defence
counsel may hamper full and frank disclosure by plaintiff's counsel of issues that impact
on the settlement. Keep in mind that, until the Court approves the settlement, the case

is not actually settled. If the Court does not approve of the settlement, and the case

needs to proceed, do not want to risk disclosing privileged information or information

26 R.S.O. 1990, c.P.51, amended, s.8(2)

 24

that could prejudice the disabled plaintiff in ongoing litigation, in the event that the

settlement is not approved by the Court. take the position that the role of the Court in

the approval process is not as an arbiter between the parties. Rather, the Court's
function is to ensure that the proposed settlement is in the disabled party's best
interests. Consequently, avoiding service of the approval material on the defence does

not prejudice the defence.

If you propose to enter into a contingency fee on behalf of a party under a disability, and

seek to have that retainer agreement approved at the outset of the case, as the
Solicitor's Act permits, strongly encourage that you also seek to have the motion

material sealed by Court order. While, in general, there is an inclination not to seal
Court files, and there are important public reasons to support that practice, would argue
that more latitude should be granted for requests to seal Affidavits in the context of the

pre-approval retainer agreement situation. Similarly, there may well be good reason to

have motion material that has been filed in support of an intended settlement also
sealed.

With the proposed legal fees, be sure that your motion material thoroughly canvasses

the relevant information that the Court will require in order to be satisfied that the

proposed fee is appropriate. The kind of information that should be contained in the

solicitor's Affidavit includes:

detailed information concerning the work that has been performed in order to

achieve the result;

the experience of the solicitor;

27 am grateful to Laurie Redden for giving me permission to include her material in this paper.
 25

a description of the persons involved in the file;

an explanation of the risk assumed;

the position of the defence. In this regard, it might be helpful to append the

defendant's Mediation Memo or Pre-Trial Memo, if the case has reached that

stage;

a review of the experts retained, or other significant disbursements that were

incurred in order to carry the file;

a copy of the retainer agreement entered into by the Litigation Guardian and
counsel; and

a description of counsel's usual retainer arrangements in a similar case involving

a party that is not under a disability.

Generally, try to ensure that your Affidavit covers off the factors that are described in the

Ontario Court of Appeal decision Cohen v. Keeley, as these are the considerations that

the Court needs to make when considering the appropriateness of a fee.

If it is proposed that a portion of the settlement monies be structured by way of a

structured settlement, it is important to explain the rationale behind the structure

proposal, the considerations that went into the selection of the specific structure scenario

that is being proposed for Court approval, and how the structured settlement assists the

disabled plaintiff in meeting his or her future expenses.

 BIBLIOGRAPHY OF SUGGESTED READINGS
(not otherwise cited in this paper)
Glynn v. Unwin (1926), 30 OWN 188

Poulin v. Nadar, [1950] O.R. 219 (C.A.)

656203 Ontario Inc. v. Soloway Wright, [1999] O.J. No. 429

Rules of Professional Conduct, Rule 2.02(6) Client Under a Disability

Rule 2.08 Fees & Disbursements

Hurd v. Dumont, [1955] O.J. No. 204

Orkin, "The Law of Costs", 2 nd Edition, at post 209.11.1 -Infant Settlements

Sheikh Bagher Mohajer Estate v. Frappier Group Inc., 2004 CanLii 8069

Sandhu v. Wellington Place Apartments, 2006 CanLii 20540 and 20539

Mclntyre (Estate) v. Ontario (AG) (2002), 218 DLR (4 th) 193

Cavalieri v. 1122077 Ontario Limited, 2006 CanLii 35819 (Ont.C.A.)
for an excellent discussion on the rationale for costs orders

1324881.1
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Solicitors Act, R.S.O. 1990, c. S.15

Citation: Solicitors Act, R.S.O. 1990, c. S.15
Enabled Regulation" CONTINGENCY FEE AGREEMENTS, O. Reg. 195/04
U RL: http://www, ca n lii. org/o n/I a ws/sta/s- 15/20070911/whole. html
Version downloaded by CanLII on 2007-09-11

Solicitors Act

R.SoO. 1990, CHAPTER S.15

Consolidation Period: From June 22, 2006 to the e-Laws currency date.

Last amendment: 2006, c.19, Sched.C, s.1(1).

Unauthorized Practice

Penalty on persons practising without being admitted as solicitors

1. If a person, unless a party to the proceeding, commences, prosecutes or defends in his or her own name,
or that of any other person, any action or proceeding without having been admitted and enrolled as a
solicitor, he or she is incapable of recovering any fee, reward or disbursements on account thereof, and is
guilty of a contempt of the court in which such proceeding was commenced, carried on or defended and is
punishable accordingly. R.S.O. 1990, c. S.15, s. 1.
Solicitor's Costs

Solicitors to deliver their bill one month before bringing action for costs

2. (1) No action shall be brought for the recovery of fees, charges or disbursements for business done by a
solicitor as such until one month after a bill thereof, subscribed with the proper hand of the solicitor, his or
her executor, administrator or assignee or, in the case of a partnership, by one of the partners, either with his
or her own name, or with the name of the partnership, has been delivered to the person to be charged
therewith, or sent by post to, or left for the person at the person's office or place of abode, or has been
enclosed in or accompanied by a letter subscribed in like manner, referring to such bill. R.S.O. 1990, c. S.15,
s. 2 (1).

Not necessary in first instance to prove contents of bill delivered

(2) In proving compliance with this Act it is not necessary in the first instance to prove the contents of the
delivered, sent or left, but it is sufficient to prove that a bill of fees, charges or disbursements subscribed
bill
as required by subsection (1), or enclosed in or accompanied by such letter, was so delivered, sent or left, but
the other party may show that the bill so delivered, sent or left, was not such a bill as constituted a
compliance with this Act. R.S.O. 1990, c. S.15, s. 2 (2).
Charges in lump sum

(3) A solicitor's bill of fees, charges or disbursements is sufficient in form if it contains a reasonable
statement or description of the services rendered with a lump sum charge therefor together with a detailed
statement of disbursements, and in any action upon or assessment of such a bill if it is deemed proper further
details of the services rendered may be ordered. R.S.O. 1990, c. S.15, s. 2 (3).

Order for assessment on requisition

3. Where the retainer of the solicitor is not disputed and there are no special circumstances, an order may be
obtained on requisition from a local registrar of the Superior Court of Justice,

(a) by the client, for the delivery and assessment of the solicitor's bill;

(b) by the client, for the assessment of a bill already delivered, within one month from its delivery;

(c) bythe solicitor, for the assessment of a bill already delivered, at any time after the expiration of one
month from its delivery, if no order for its assessment has been previously made. R.S.O. 1990, c. S.15, s. 3;
2006, c. 19, Sched. C, s. 1 (1).
No reference on application of party chargeable after verdict or after 12 months from delivery

4. (1)No such reference shall be directed upon an application made by the party chargeable with such bill
after a verdict or judgment has been obtained, or after twelve months from the time such bill was delivered,
sent or left as aforesaid, except under special circumstances to be proved to the satisfaction of the court or
judge to whom the application for the reference is made. R.S.O. 1990, c. S.15, s. 4 (1).
Directions as to costs

(2) Where the reference is made under subsection (1), the court or judge, in making it, may give any special
directions relative to its costs. R.S.O. 1990, c. S.15, s. 4 (2).

When officer may assess bill without notice

5. In case either party to a reference, having due notice, refuses or neglects to the assessment, the attend
officer to whom the reference is made may assess the bill Without further notice. R.S.O. 1990, c. S.15, s. 5.

Delivery of bill and reference to assessment

6. (1) When a client or other person obtains an order for the delivery and assessment of a solicitor's bill of
fees, charges and disbursements, or a copy thereof, the bill shall be delivered within fourteen days from the
service of the order. R.S.O. 1990, c. S.15, s. 6 (1).

Credits, debits, etc., on reference

(2) The bill delivered shall stand referred to an assessment officer for assessment, and on the reference the
solicitor shall give credit for, and an account shall be taken of, all sums of money by him or her received from
or on account of the client, and the solicitor shall refund what, if anything, he of she may on such assessment
appear to have been overpaid. R.S.O. 1990, c. S.15, s. 6 (2).

Costs on reference

(3) The costs of the reference are, unless otherwise directed, in the discretion of the officer, subject to
appeal, and shall be assessed by him or her when and as allowed. R.S.O. 1990, c. S.15, s. 6 (3).

No action

(4) The solicitor shall not commence or prosecute any action in respect of the matters referred pending the
reference without leave of the court or a judge. R.S.O. 1990, c. S.15, s. 6 (4).
When payment due

(5) The amount certified to be due shall be paid by the party liable to pay the amount, forthwith after
confirmation of the certificate in the same manner as confirmation of a referee's report under the Rules of
Civil Procedure. R.S.O. 1990, c. S.15, s. 6 (5).

Client's papers

(6) Upon payment by the client or other person of what, if anything, appears to be due to the solicitor, or if
nothing is found to be due to the solicitor, the solicitor, if required, shall deliver to the client or other person,
or as the client or other person directs, all deeds, books, papers and writings in the solicitor's possession,
custody or power belonging to the client. R.S.O. 1990, c. S.15, s. 6 (6).
Contents of order

(7) The order shall be read as if it contained the above particulars, and shall not set forth the same, but may
contain any variation therefrom and any other directions that the court or judge sees fit to make. R.S.O.
1990, c. S.15, s. 6 (7).

What order presumed to contain

(8) An order for reference of a solicitor's bill for assessment shall be presumed to contain subsections (2) to
(6) whether obtained on requisition or otherwise, and by the solicitor, client or other person liable to pay the
bill. R.S.O. 1990, c. S.15, s. 6 (8).

Motion to oppose confirmation

(9) A motion to oppose confirmation of the certificate shall be made to a judge of the Superior Court of
Justice. R.S.O. 1990, c. S.15, s. 6 (9); 2006, c. 19, Sched. C, s. 1 (1).

Costs of unnecessary steps in proceedings

7. (1) Upon assessment between a solicitor and his or her client, the assessment officer may allow the costs
of steps taken in proceedings that were in fact unnecessary where he or she is of the opinion that the steps
were taken by the solicitor because, in his or her judgment, reasonably exercised, they were conducive to the
interests of his or her client, and may allow the costs of steps that were not calculated to advance the
interests of the client where the steps were taken by the desire of the client after being informed by the
solicitor that they were unnecessary and not calculated to advance the client's interests. R.S.O. 1990, c. S.15,
s. 7 (1).
Application
(2) Subsection (1) does not apply to solicitor and client costs payable out of a fund not wholly belonging to
the client, or by a third party. R.S.O. 1990, c. S.15, s. 7 (2).

When actions for costs within the month may be allowed

8. A judge of the Superior Court of Justice, on proof to his or her satisfaction that there is probable cause for
believing that the party chargeable is about to depart from Ontario, may authorize a solicitor to commence an
action for the recovery of his or her fees, charges or disbursements against the party chargeable therewith,
although one month has not expired since the delivery of the bill. R.S.O. 1990, c. S.15, s. 8; 1993, c. 27,
Sched.; 2006, c. 19, Sched. C, s. 1 (1).
Assessment where a party not being the principal, pays a bill of costs

g. (1) Where a person, not being chargeable as the principal party, is liable to pay or has paid a bill either to
the solicitor, his or her assignee, or personal representative, or to the principal party entitled thereto, the
person so liable to pay or paying, the person's assignee or personal representative, may apply to the court for
an order referring to assessment as the party chargeable therewith might have done, and the same
proceedings shall be had thereupon as if the application had been made by the party so chargeable. R.S.O.
1990, c. S.15, s. 9 (1).
What special circumstances may be considered in such case

(2) If such application is made where, under the provisions hereinbefore contained, a reference is not
authorized to be made except under special circumstances, the court may take into consideration any
additional special circumstances applicable to the person making it, although such circumstances might not be
applicable to the party chargeable with the bill if he, she or it was the party making the application. R.S.O.
1990, c. S.15, s. 9 (2).

Order for delivery of a copy of the bill

(3) For the purpose of such reference, the court may order the solicitor, his or her assignee or
representative, to deliver to the party making the application a copy of the bill upon payment of the costs of
the copy. R.S.O. 1990, c. S.15, s. 9 (3).
Assessment at instance of third person

(4) When a person, other than the client, applies for assessment of a bill delivered or for the delivery of a
copy thereof for the purpose of assessment and it appears that by reason of the conduct of the client the
applicant is precluded from assessing the bill, but is nevertheless entitled to an account from the client, it is
not necessary for the applicant to bring an action for an account, but the court may, in a summary manner,
refer a bill already delivered or order delivery of a copy of the bill, and refer it for assessment, as between the
applicant and the client, and may add such parties not already notified as may be necessary. R.S.O. 1990,
c. S.15, s. 9 (4).
Application of s. 6

(5) The provisions of section 6, so far as they are applicable, apply to such assessment. R.S.O. 1990, c. S.15,
s. 9 (5).
When a bill may be reassessed

:[0. No bill previously assessed shall be again referred unless under the special circumstances of the case the
court thinks fit to direct a reassessment thereof. R.S.O. 1990, c. S.15, s. 10.

Payment not to preclude assessment

11. The payment of a bill does not preclude the court from referring it for assessment if the special
circumstances of the case, in the opinion of the court, appear to require the assessment. R.S.O. 1990,
c. S.15, s. 11; 2002, c. 24, Sched. B, s. 46 (1).

Assessment officer may request assistance of another assessment officer

12. Where a bill is referred for assessment, the officer to whom the reference is made may request another
assessment officer to assist him or her in assessing any part of the bill, and the officer so requested shall
thereupon assess it, and has the same powers and may receive the same fees in respect thereof as upon a
reference to him or her by a court, and he or she shall return the bill, with his or her opinion thereon, to the
officer who so requests him or her to assess it. R.S.O. 1990, c. S.15, s. 12.

How applications against solicitors to be entitled

13. Every application to refer a bill for assessment, or for the delivery of a bill, or for the delivering up of
deeds, documents and papers, shall be made In the matter of (the solicitor), and upon the assessment of the
bill the report of the officer by whom the bill is assessed, unless set aside or varied, is final and conclusive as
to the amount thereof, and payment of the amount found to be due and directed to be paid may be enforced
according to the practice of the court in which the reference was made. R.S.O. 1990, c. S.15, s. 13.
What to be considered in assessment of costs

:[4. In assessing a bill for preparing and executing any instrument, an assessment officer shall consider not
the length of the instrument b•t the skill, labour and responsibility involved therein. R.S.O. 1990, c. S.15,
s. 14.

Agreements Between Solicitors and Clients

Definitions

15. In this section and in sections 16 to 33,

"client" includes a person who, as a principal or on behalf of another person, retains or employs or is about to
retain or employ a solicitor, and a person who is or may be liable to pay the bill of a solicitor for any services;
("client")
"contingency fee agreement" means an agreement referred to in section 28.1; ("entente sur des honoraires
conditionnels")
"services" includes fees, costs, charges and disbursements. ("service") R.S.O. 1990, c. S.15, s. 15; 2002,
c. 24, Sched. A, s. 1.
Agreements between solicitors and clients as to compensation
16. (1) Subject to sections 17 to 33, a solicitor may make an agreement in writing with his or her client
respecting the amount and manner of payment for the whole or a part of any past or future services in
respect of business done or to be done by the solicitor, either by a gross sum or by commission or
percentage, or by salary or otherwise, and either at the same rate or at a greater or less rate than that at
which he or she would otherwise be entitled to be remunerated. R.S.O. 1990, c. S.15, s. 16 (1).

Definition

(2) For purposes of this section and sections 20 to 32,

"agreement" includes a contingency fee agreement. 2002, c. 24, Sched. A, s. 2.

Approval of agreement by assessment officer

17. Where the agreement is made in respect of business done or to be done in any court, except the Small
Claims Court, the amount payable under the agreement shall not be received by the solicitor until the
agreement has been examined and allowed by an assessment officer. R.S.O. 1990, c. S.15, s. 17.

Opinion of court on agreement

18. Where it appears to the assessment officer that the agreement is not fair and reasonable, he or she may
require the opinion of a court to be taken thereon. R.S.O. 1990, c. S.15, s. 18.

Rejection of agreement by court

lg. The court may either reduce the amount payable under the agreement or order it to be cancelled and the
costs, fees, charges and disbursements in respect of the business done to be assessed in the same manner as
if the agreement had not been made. R.S.O. 1990, c. S.15, s. 19.

Agreement not to affect costs as between party and party

20. (1) Such an agreement does not affect the amount, or any right or remedy for the recovery, of any
costs recoverable from the client by any other person, or payable to the client by any other person, and any
such other person may require any costs payable or recoverable by the person to or from the client to be
assessed in the ordinary manner, unless such person has otherwise agreed. R.S.O. 1990, c. S.15, s. 20 (1).

Idem

(2) However, the client who has entered into the agreement is not entitled to recover from any other person
under any order for the payment of any costs that are the subject of the agreement more than the amount
payable by the client to the client's own solicitor under the agreement. R.S.O. 1990, c. S.15, s. 20 (2).
Awards of costs in contingency fee agreements

20.1 (1) In calculating the amount of costs for the purposes of making an award of costs, a court shall not
reduce the amount of costs only because the client's solicitor is being compensated in accordance with a
contingency fee agreement. 2002, c. 24, Sched. A, s. 3.
Same

(2) Despite subsection 20 (2), even if an order for the payment of costs is more than the amount payable, by
the client to the client's own solicitor under a contingency fee agreement, a client may recover the full amount
under an order for the payment of costs if the client is to use the payment of costs to pay his, her or its
solicitor. 2002, co 24, Sched. A, s. 3.

Same

(3) If the client recovers the full amount under an order for the payment of costs Under subsection (2), the
client is only required to pay costs to his, her or its solicitor and not the amount payable under the
contingency fee agreement, unless the contingency fee agreement is one that has been approved by a court
under subsection 28.1 (8) and provides otherwise. 2002, c. 24, Sched. A, s. 3.
Claims for additional remuneration excluded

21. Such an agreement excludes any further claim of the solicitor beyond the terms of the agreement in
respect of services in relation to the conduct and completion of the business in respect of which it is made,
except such as are expressly excepted by the agreement. R.S.O. 1990, c. S.15, s. 21.

Agreements relieving solicitor from liability for negligence void

22. (1) A provision in any such agreement that the solicitor is not to be liable for negligence or that he or
she is to be relieved from any responsibility to which he or she would otherwise be subject as such solicitor is
wholly void. R.S.O. 1990, c. S.15, s. 22.
Exception, indemnification by solicitor's employer
(2) Subsection (1) does not prohibit a solicitor who is employed in a master-servant relationship from being
indemnified by the employer for liabilities incurred by professional negligence in the course of the
employment. 1999, c. 12, Sched. B, s. 14.
Determination of disputes under the agreement
23. No action shall be brought upon any such agreement, but every question respecting the validity or effect
of it may be examined and determined, and it may be enforced or set aside without action on the application
of any person who is a party to the agreement or who is or is alleged to be liable to pay or who is or claims to
be entitled to be paid the costs, fees, charges or disbursements, in respect of which the agreement is made,
by the court, not being the Small Claims Court, in which the business or any part of it was done or a judge
thereof, or, if the business was not done in any court, by the Superior Court of Justice. R.S.O. 1990, c. S.15,
s. 23; 2006, c. 19, Sched. C, s. 1 (1).

Enforcement of agreement

24. Upon any such application, if it appears to the court that the agreement is in all respects fair and
reasonable between the parties, it may be enforced by the court by order in such manner and subject to such
conditions as to the costs of the application as the court thinks fit, but, if the terms of the agreement are
deemed by the court not to be fair and reasonable, the agreement may be declared void, and the court may
order it to be cancelled and may direct the costs, fees, charges and disbursements incurred or chargeable in
respect of the matters included therein to be assessed in the ordinary manner. R.S.O. 1990, c.S.15, s.24.
Reopening of agreement

25. Where the amount agreed under any such agreement has been paid by or on behalf of the client or by
any person chargeable with or entitled to pay it, the Superior Court of Justice may, upon the application of
the person who has paid it if it appears to the court that the special circumstances of the case require the
agreement to be reopened, reopen it and order the costs, fees, charges and disbursements to be assessed,
and may also order the whole or any part of the amount received by the solicitor to be repaid by him or her
on such terms and conditions as to the court seems just. R.S.O. 1990, c. S.15, s. 25; 2002, c. 24, Sched. B,
s. 46 (2); 2006, c. 19, Sched. C, s. 1 (1).

Agreements made by client in fiduciary capacity

26. Where any such agreement is made by the client in the capacity of guardian or of trustee under a deed
or or in the capacity of guardian of property that will be chargeable with the amount or any part of the
will,
amount payable under the agreement, the agreement shall, before payment, be laid before an assessment
officer who shall examine it and may disallow any part of it or may require the direction of the court to be
made thereon. R.S.O. 1990, c. S.15, s. 26; 1992, c. 32, s. 26.

Client paying without approval to be liable to estate

27. If the client pays the whole or any part of such amount without the previous allowance of an assessment
officer or the direction of the court, the client is liable to account to the person whose estate or property is
charged with the amount paid or any part of it for the amount so charged, and the solicitor who accepts such
payment may be ordered by the court to refund the amount received by him or her. R.S.O. 1990, c. S.15,
s. 27.

Purchase of interest prohibited

28. A solicitor shall not enter into an agreement by which the solicitor purchases all or part of a client's
interest in the action or other contentious proceeding that the solicitor is to bring or maintain on the client's
behalf. 2002, c. 24, Sched. A, s. 4.

Contingency fee agreements

28.1 (1) A solicitor may enter into a contingency fee agreement with a client in accordance with this section.
2002, c. 24, Sched. A, s. 4.

Remuneration dependent on success

(2) A solicitor may enter into a contingency fee agreement that provides that the remuneration paid to the
solicitor for the legal services provided to or on behalf of the client is contingent, in whole or in part, on the
successful disposition or completion of the matter in respect of which services are provided. 2002, c. 24,
Sched. A, s. 4.

No contingency fees in certain matters

(3) A solicitor shall not enter into a contingency fee agreement if the solicitor is retained in respect of,

(a) a proceeding under the Criminal Code (Canada) or any other criminal or quasi-criminal proceeding; or

(b) a family law matter. 2002, c. 24, Sched. A, s. 4.

Written agreement

(4) A contingency fee agreement shall be in writing. 2002, c. 24, Sched. A, s. 4.

Maximum amount of contingency fee

(5) If a contingency fee agreement involves a percentage of the amount or of the value of the property
recovered in an action .or proceeding, the amount to be paid to the solicitor shall not be more than the
maximum percentage, if any, prescribed by regulation of the amount or of the value of the property
recovered in the action or proceeding, how ever the amount or property is recovered. 2002, c. 24, Sched. A,

Greater maximum amount where approved

(6) Despite subsection (5), a solicitor may enter into a contingency fee agreement where the amount paid to
the solicitor is more than the maximum percentage prescribed by regulation of the amount or of the value of
the property recovered in the action or proceeding, if, upon joint application of the solicitor and his or her
client whose application is to be brought within 90 days after the agreement is executed, the agreement is
approved by the Superior Court of Justice. 2002, c. 24, Sched. A, s. 4.
Factors to be considered in application
(7) In determining whether to grant an application under subsection (6), the court shall consider the nature
and complexity of the action or proceeding and the expense or risk involved in it and may consider such other
factors as the court considers relevant. 2002, c. 24, Sched. A, s. 4.

Agreement not to include costs except with leave

(8) A contingency fee agreement shall not include in the fee payable to the solicitor, in addition to the fee
payable under the agreement, any amount arising as a result of an award of costs or costs obtained as part of
a settlement, unless,

(a) the solicitor and client jointly apply to a judge of the Superior Court of Justice for approval to include the
costs or a proportion of the costs in the contingency fee agreement because of exceptional circumstances;
and

(b) the judge is satisfied that exceptional circumstances apply and approves the inclusion of the costs or a
proportion of them. 2002, c. 24, Sched. A, s. 4.
Enforceability of greater maximum amount of contingency fee

(9) A contingency fee agreement that is subject to approval under subsection (6) or (8) is not enforceable
unless it is so approved. 2002, c. 24, Sched. A, s. 4.

Non-application
(10) Sections 17, 18 and 19 do not apply to contingency fee agreements. 2002, c. 24, Sched. A, s. 4.

Assessment of contingency fee

(11) For purposes of assessment, if a contingency fee agreement,

(a) is not one to which subsection (6) or (8) applies, the client may apply to the Superior Court of Justice for
an assessment of the solicitor's bill within 30 days after its delivery or within one year after its payment; or

(b) is one to which subsection (6) or (8) applies, the client or the solicitor may apply to the Superior Court of
Justice for an assessment within the time prescribed by regulation made under this section. 2002, c. 24,
Sched. A, s. 4.

Regulations
(12) The Lieutenant Governor in Council may make regulations governing contingency fee agreements,
including regulations,
(a) governing the maximum percentage of the amount or of the value of the property recovered that may be
a contingency fee, including but not limited to,
(i) setting a scale for the maximum percentage that may be charged for a contingency fee based on factors
such as the value of the recovery and the amount of time spent by the solicitor, and

(ii) differentiating the maximum percentage that may be charged for a contingency fee based on factors such
as the type of of action and the court in which the action is to be heard and distinguishing between
cause
causes of actions of the same type;

(b) governing the maximum amount of remuneration that may be paid to a solicitor pursuant to a
contingency fee agreement;
(c) in respect of treatment of costs awarded or obtained where there is a contingency fee agreement;
(d) prescribing standards and requirements for contingency fee agreements, including the form of the
agreements and terms that must be included in contingency fee agreements and prohibiting terms from being
included in contingency fee agreements;

(e) imposing duties on solicitors who enter into contingency fee agreements;
(f) prescribing the time in which a solicitor or client may apply for an assessment under clause (11) (b);
(g) exempting persons, actions or proceedings or classes of persons, actions or proceedings from this section,
a regulation made under this section or any provision in a regulation. 2002, c. 24, Sched. A, s. 4.

Where solicitor dies or becomes incapable of acting after agreement

29. Where a solicitor who has made such an agreement and who has done anything under it dies or becomes
incapable of acting before the agreement has been completely performed by him or her, an application may
be made to any court that would have jurisdiction to examine and enforce the agreement by any person who
is a party thereto, and the court may thereupon enforce or set aside the agreement so far as it may have
been acted upon as if the death or incapacity had not happened, and, if it deems the agreement to be in all
respects fair and reasonable, may order the amount in respect of the past performance of it to be ascertained
by assessment, and the assessment officer, in ascertaining such amount, shall have regard, so far as may be,
to the terms of the agreement, and payment of the amount found to be due may be ordered in the same
manner as if the agreement had been completely performed by the solicitor. R.S.O. 1990, c. S.15, s. 29.
Changing solicitor after making agreement
30. If, after any such agreement has been made, the client changes solicitor before the conclusion of the
business to which the agreement relates, which the client is at liberty to do despite the agreement, the
solicitor, party to the agreement, shall be deemed to have become incapable to act under it within the
meaning of section 29, and upon any order being made for assessment of the amount due him or her in
respect of the past performance of the agreement the court shall direct the assessment officer to have regard
to the circumstances under which the change of solicitor took place, and upon the assessment the solicitor
shall be deemed not to be entitled to the full amount of the remuneration agreed to be paid to him or her,
unless it appears that there has been no default, negligence, improper delay or other conduct on his or her
part affording reasonable ground to the client for the change of solicitor. R.S.O. 1990, c. S.15, s. 30.

Bills under agreement not to be liable to assessment

31. Except as otherwise provided in sections 16 to 30 and sections 32 and 33, a bill of a solicitor for the
amount due under any such agreement is not subject to any assessment or to any •rovision of law respecting
the signing and delivery of a bill of a solicitor. R.S.O. 1990, c. S.15, s. 31.

Security may be given to solicitor for costs

32. A solicitor may accept from his or her client, and a client may give to the client's solicitor, security for the
amount to become due to the solicitor for business to be transacted by him or her and for interest thereon,
but so that the interest is not to commence until the amount due is ascertained by agreement or by
assessment. R.S.O. 1990, c. S.15, s. 32..

Interest on unpaid accounts

33. (1) A solicitor may charge interest on unpaid fees, charges or disbursements, calculated from a date
that is one month after the bill is delivered under section 2. R.S.O. 1990, c. S.15, s. 33 (1).

Interest on overpayment of accounts

(2) Where, on an assessment of a solicitor's bill of fees, charges and disbursements, itappears that the client
has overpaid the solicitor, the client is entitled to interest on the overpayment calculated from the date when
the overpayment was made. R.S.O. 1990, c. S.15, s. 33 (2).
Rate of interest

(3) The rate of interest chargeable under subsection (1) or (2) shall not exceed the rate that is established
for the purpose of section 128 of the Courts of Justice Act in respect of an action that is commenced on the
day the bill is delivered, or the overpayment is made, as the case may be. R.S.O. 1990, c. S.15, s. 33 (3).

Idem

(4) The rate of interest applicable to a bill shall be shown on the bill delivered. R.S.O. 1990, c. S.1.5, s. 33
(4).
Variation of rate on assessment

(5) On the assessment of a solicitor's bill, the assessment officer may, where he or she considers it to be just
to do so in all the circumstances,

(a) disallow interest; or

(b) fix a rate of interest that is less than the maximum rate authorized by this section,

in respect of the whole or any part of the amount allowed on the assessment. R.S.O. 1990, c. S.15, s. 33 (5);
1993, c. 27, Sched.
Solicitors' Charging Orders
Charge on property for costs
34. (1) Wherea solicitor has been employed to prosecute or defend a proceeding in the Superior Court of
Justice, the court may, on motion, declare the solicitor to be entitled to a charge on the property recovered or
preserved through the instrumentality of the solicitor for the solicitor's fees, costs, charges and disbursements
in the proceeding. R.S.O. 1990, c. S.15, So 34 (1); 2006, c. 19, Sched. C, s. 1 (1).

Conveyance to defeat is void

(2) A conveyance made to defeat or which may operate to defeat a charge under subsection (1) is, unless
made to.a person who purchased the property for value in good faith and without notice of the charge, void
as against the charge. R.S.O. 1990, c. S.15, s. 34 (2).

Assessment and recovery

(3) The court may order that the solicitor's bill for services be assessed in accordance with this Act and that
payment shall be made out of the charged property. R.S.O. 1990, c. S.15, s. 34 (3).

Solicitors as Mortgagees, etc.

Interpretation
35. (1) In this section,
"mortgage" includes any charge on any property for securing money or money's worth. R.S.O. 1990, c. S.15,
s• 35 (1).

Charges, etc., where mortgage is made with solicitor

(2) A solicitor to whom, either alone or jointly with any other person, a mortgage is made, or the firm of
which the solicitor is a member, is entitled to receive for all business transacted and acts done by the solicitor
or firm in negotiating the loan, deducing and investigating the title to the property and preparing and
completing the mortgage, all the usual professional charges and remuneration that he or she or they would
have been entitled to receive if the mortgage had been made to a person not a solicitor and the person had
retained and employed the solicitor or firm to transact such business and do such acts, and such charges and
remuneration are accordingly recoverable from the mortgagor. R.S.O. 1990, c. S.15, s. 35 (2).

Right of solicitor with whom mortgage is made to recover costs, etc.

(3) A solicitor to or in whom, either alone or jointly with any other person, a mortgage is made or is vested
by transfer or transmission, or the firm of which the solicitor is a member, is entitled to receive and recover
from the person on whose behalf the same is done or to charge against the security for all business
transacted and acts done by the solicitor or firm subsequent and in relation to the mortgage or to the security
thereby created or the property therein comprised all such usual professional charges and remuneration as he
or she or they would have been entitled to receive if the mortgage had been made to and had remained
vested in a person not a solicitor and the person had retained and employed the solicitor or firm to transact
such business and do such acts, and accordingly the mortgage shall not be redeemed except upon payment of
such charges and remuneration. R.S.O. 1990, c. S.15, s. 35 (3).

Solicitor-director, right to charge for services to trust estate

(4) A solicitor who is a director of a trust corporation or of any other company, or the firm of which the
solicitor is a member is entitled to receive for all business transacted or acts done by the solicitor or firm for
the corporation or company in relation to or in connection with any matter in which the corporation or
company acts as trustee, guardian, personal representative or agent, all the usual professional fees and
remuneration that he or she or they would be entitled to receive if the solicitor had not been a director of the
corporation or company, and the corporation or company had retained and employed the solicitor or firm to
transact such business and do such acts, and such charges and remuneration are accordingly recoverable
from the corporation or company and may be charged by them as a disbursement in the matter of such
trusteeship, guardianship, administration or agency. R.S.O. 1990, c. S.15, s. 35 (4).
Salaried Solicitors

Costs, salaried counsel

36. Costs awarded to a party in a proceeding shall not be disallowed or reduced on assessment merely
 because they relate to a solicitor or counsel who is a salaried employee of the party. R.S.O. 1990, c. S.15,
s.36.

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CONTINGENCY FEE AGREEMENTS, O Reg. 195/04

Citation" CONTINGENCY FEE AGREEMENTS, O. Reg. 195/04
Enabling Solicitors Act, R.S.O. 1990, c. S.15
Statute"
URL: http ://www. ca n lii. o rg/on/laws/reg u/2004r. 195/20070911/whole. html
Version downloaded by CanLII on 2007-09-11

Solicitors Act

ONTARIO REGULATION 195/04

CONTINGENCY FEE AGREEMENTS

Consolidation Period: From October 1, 2004 to the e-Laws currency date.

No amendments.

This is the English version of a bilingual regulation.

SKIP TABLE OF CONTENTS

CONTENTS

1. Signing and dating contingency fee agreement

2. Contents of contingency fee agreements, general
3. Contents of contingency fee agreements, litigious matters
4. Matters not to be included in contingency fee agreements
5. Contingency fee agreement, person under disability
6. Contingency fee excludes costs and disbursements
7. Contingency fee not to exceed damages
8. Settlement or judgment money to be held in trust
9. Disbursements and taxes
10.Timing of assessment of contingency fee agreement
Signing and dating contingency fee agreement

1, (1) For the purposes of section 28.1 of the Act, in addition to being in writing, a contingency fee
agreement,
(a) shall be entitled "Contingency Fee Retainer Agreement";

(b) shall be dated; and

(c) shall be signed by the client and the solicitor with each of their signatures being verified by a witness.
O. Reg. 195/04, s. 1 (1).
(2) The solicitor shall provide an executed copy of the contingency fee agreement to the client and shall
retain a copy of the agreement. O. Reg. 195/04, s. 1 (2).

Contents of contingency fee agreements, general

2. A solicitor who is a party to a contingency fee agreement shall ensure that the agreement includes the
following:
1. The name, address and telephone number of the solicitor and of the client.

2. A statement of the basic type and nature of the matter in respect of which the solicitor is providing services
to the client.

3. A statement that indicates,

i. that the client and the solicitor have discussed options for retaining the solicitor other than by way of a
contingency fee agreement, including retaining the solicitor by way of an hourly-rate retainer,
ii. that the client has been advised that hourly rates may vary among solicitors and that the client can speak
with other solicitors to compare rates,

iii. that the client has chosen to retain the solicitor by way of a contingency fee agreement, and

iv. that the client understands that all usual protections and controls on retainers between a solicitor and
client, as defined by the Law Society of Upper Canada and the common law, apply to the contingency fee
agreement.

4. A statement that explains the contingency upon which the fee is to be paid to the solicitor.

5. A statement that sets out the method by which the fee is to be determined and, if the method of
determination is as a percentage of the amount recovered, a statement that explains that for the purpose of
calculating the fee the amount of recovery excludes any amount awarded or agreed to that is separately
specified as being in respect of costs and disbursements.
6. A simpl• example that shows how the contingency fee is calculated.

7. A statement that outlines how the contingency fee is calculated, if recovery is by way of a structured
settlement.

8. A statement that informs the client of their right to ask the Superior Court of Justice to review and approve
of the solicitor's bill and that includes the applicable timelines for asking for the review.

9. A statement that outlines when and how the client or the solicitor may terminate the contingency fee
agreement, the consequences of the termination for each of them and the manner in which the solicitor's fee
is to be determined in the event that the agreement is terminated.

10. A statement that informs the client that the client retains the right to make all critical decisions regarding
the conduct of the matter. O. Reg. 195/04, s. 2.

Contents of contingency fee agreements, litigious matters

3. In addition to the requirements set out in section 2, solicitor who is a party to a contingency fee
a
agreement made in respect of a litigious matter shall ensure that the agreement includes the following:

1. If the client is a plaintiff, a statement that the solicitor shall not recover more in fees than the client
recovers as damages or receives by way of settlement.

2. A statement in respect of disbursements and taxes, including the GST payable on the solicitor's fees, that
indicates,
i. whether the client is responsible for the payment of disbursements ortaxes and, if the client is responsible
for the payment of disbursements, a general description of disbursements likely to be incurred, other than
relatively minor disbursements, and
ii. that if the client is responsible for the payment of disbursements or taxes and the solicitor pays the
disbursements or taxes during the course of the matter, the solicitor is entitled to be reimbursed for those
payments, subject to section 47 of the Legal Aid Services Act, 1998 (legal aid charge against recovery), as a
first charge on any funds received as a result of a judgment or settlement of the matter.
3. A statement that explains costs and the awarding of costs and that indicates,

i. that, unless otherwise ordered by a judge, a client is entitled to receive any costs contribution or award, on
a partial indemnity scale or substantial indemnity scale, if the client is the party entitled to costs, and
ii. that a client is responsible for paying any costs contribution or award, on a partial indemnity scale or
substantial indemnity scale, if the client is the party liable to pay costs.

4. If the client is a plaintiff, a statement that indicatesthat the client agrees and directs that all funds claimed
by the solicitor for legal fees, cost, taxes and disbursements shall be paid to the solicitor in trust from any
judgment or settlement money.
5. If the client is a party under disability, for the purposes of the Rules of Civil Procedure, represented by a
litigation guardian,
i. a statement that the contingency fee agreement either must be reviewed by a judge before the agreement
is finalized or must be reviewed as part of the motion or application for approval of a settlement or a consent
judgment under rule 7.08 of the Rules of Civil Procedure,
ii. statement that the amount of the legal fees, costs, taxes and disbursements are subject to the approval
a
of a judge when the judge reviews a settlement agreement or consent judgment under rule 7.08 of the Rules
of Civil Procedure, and

iii. statement that any money payable to .a person under disability under an order or settlement shall be
a
paid into court unless a judge orders otherwise under rule 7.09 of the Rules of Civil Procedure. O. Reg.
195/04, s. 3.

Matters not to be included in contingency fee agreements

4. (1) A solicitor shall not include in a contingency fee agreement a provision that,

(a) requires the solicitor's consent before a claim may be.abandoned, discontinued or settled at the
instructions of the client;

(b) prevents the client from terminating the contingency fee agreement with the solicitor or changing
solicitors; or

(c) permits the solicitor to split their fee with any other person, except as provided by the Rules of
Professional Conduct. O. Reg. 195/04, s. 4 (1).

(2) In this section,

"Rules of Professional Conduct" means the Rules Of Professional Conduct of the Law Society of Upper Canada.
O. Reg. 195/04, s. 4 (2).

5. (1) A solicitor for a person under disability represented by a litigation guardian with whom the solicitor is
entering into a contingency fee agreement shall,

(a) apply to a judge for approval of the agreement before the agreement is finalized; or

(b) include the agreement as part of the motion or application for approval of a settlement or a consent
judgment under rule 7.08 of the Rules of Civil Procedure. O. Reg. i95/04, s. 5 (1).

(2) In this section,

"person disability"
under means a person under disability for the purposes of the Rules of Civil Procedure.
O. Reg. 195/04, s. 5 (2).

Contingency fee excludes costs and disbursements

 6. A contingency fee agreement that provides that the fee is determined as a percentage of the amount
recovered shall exclude any amount awarded or agreed to that is separately specified as being in respect of
costs and disbursements. O. Reg. 195/04, s. 6.

7. Despite any terms in a contingency fee agreement, a solicitor for a plaintiff shal• not recover more in fees
under the agreement than the plaintiff recovers as damages or receives by way of settlement. O. Reg.
195/04, s. 7.

Settlement or judgment money to be held in trust

8. A client who is a party to a contingency fee agreement shall direct that the amount of funds claimed by
the solicitor for legal fees, cost, taxes and disbursements be paid to the solicitor in trust from any judgment
or settlement money. O. Reg. 195/04, s. 8.

g. (1) If the client is responsible for the payment of disbursements or taxes under a contingency fee
agreement, a solicitor who has paid disbursements or taxes during the course of the matter in respect of
which services were provided shall be reimbursed for the disbursements or taxes on any funds received as a
result of a judgment or settlement of the matter. O. Reg. 195/04, s. 9 (1).
(2) Except as provided under section 47 of the LegalAid Services Act, 1998 (legal aid charge against
recovery), the amount to be reimbursed to the solicitor under subsection (1)is a first charge on the funds
received as a result of the judgment or settlement. O. Reg. 195/04, s. 9 (2).

Timing of assessment of contingency fee agreement

10. For the purposes of clause 28.1 (11) (b) of the Act, the client or the solicitor may apply to the Superior
Court of Justice for an assessment of the solicitor's bill rendered in respect of a contingency fee agreement to
which subsection 28.1 (6) or (8) of the Act applies within six months after its delivery. O. Reg. 195/04, s. 10.

11. Omitted (provides for coming into force of provisions of this Regulation). O. Reg. 195/04, s. 11.

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Fran•ais
Ontario
F. Litigation Services

9. Passings of Accounts: Where attendance is required at a hearing for the

no
passing of accounts, costs in accordance with Tariff C of
Lhe Rules of Civil Procedure, payable by the estate, trust
•rincapable person;
Where the passing of accounts is contested, or where the
zosts exceed the amount allowed under Tariff C,
solicitor- client costs at the hourly rate of legal counsel
tnd staff providing the service, payable by the estate,
rust orincapable person.
20. For all other litigious matters, including bul At the hourly rate of legal counsel and staff providing the
not limited to applications under the Substitute service, payable by the opposing party, where possible,
Decisions Act, family law, estate litigation or or, in the alternative, by the client or estate.
other civil litigation:
21. For litigation services rendered to clients At the hourly rate of legal counsel or staff providing the
for whom the Public Guardian and Trustee acts service, payable by the opposing party, where possible,
as litigation guardian or legal representative or, in the alternative, by the client or estate.
under any rule of Court or by court Order:
Fran•ais
Ontario
G. Other Legal Services

For any legal

service provided by the tthe hourly rate of legal counsel and staff providing the
ublic Guardian and Trustee not specifically rvice.
[llistedin this Schedule:

23. The hourly rates of legal counsel and staff are as follows:
Counsel:

No. of Years of Experience Rate per Hour

0 to 2 years $150.
3 to 5 years $175.
16 8 years
to
1,2oo.
19 lO years
to
l$225.
[O er 10 years l$250.
rticling Students: $100.
Clerks and Paralegals: $ 80.
The Public Guardian and Trustee may designate counsel in the Office of the Public Guardian and Trustee
who may charge up to an additional $50.00 per hour for specialized legal services. [No counsel have been
so designated as. of September 1, 2004.]
Fran•ais
Ontario
H. Accountant of the Superior Court of Justice

24. Compensation on trusts held for minors, 3.0% on capital and income receipts; and
incapable adults under a mental disability 3.0% on capital and income disbursements,
payable monthly by the minor, incapable •r trust.
•erson and absentees:
25. Care and Management Fee on Trusts 3/5 of 1% per annum on the average annual value of the
managed for minors, Incapable adults under a rust under management, payable monthly by the minor,
mental Disability and absentees: ][incapable person, trust or absentee.
26. Care and Management Fee on money paid 3/5 of 1% per annum on the average annual value of the
into Court by or on behalf of a party to funds under management payable monthly out of the
litigation (who are not minors or mentally funds held in Court.
incapable adults), whether on Consent or
)ursuant to a Court Order:
27. Fee for the taking of an Affidavit or 10., payable by the affiant.
Declaration
Oaths:
28.
by a Commissioner for taking

Any other fee to the Accountant Of the

3uperior Court of Justice, as provided by a
3tatute, regulation or any rule of court:
I s provided by the statute, regulation or rule.
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Frequently Asked Questions
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choice for families wishing to save for their children's future education costs. There are several
types of RESPs Family_, Non-Family, and Group Plans. You can consult with RESP promoters to
decide which plan is right for you. Browse the most current list of financial institutions that are
offering RESPs.

For more information, visit the Canada Revenue Agency (CRA) web site.

What is a Registered Education Savings Plan and why should

every Canadian child have one?
A Registered Education Savings Plan is a type of savings account that grows tax free until a
child is ready for post-secondary education. RESPs are a good way to save for a number of
reasons:
* the money grows tax free until the child needs it for tuition, residence and other educational
expenses;
* an RESP allows you to apply for the Canada Education Savings Grant on your child's behalf;
* you may contribute up to $4,000 a year in an RESP

We just had our first baby. When should we start saving?

Right away. In fact, the earlier in life you set up an RESP and apply for the Canada Education
Savings Grant, the bigger your child's savings will grow.
What the maximum annual and lifetime contributions
are
allowed for an RESP?
There is an annual maximum contribution limit of $4,000 and a lifetime limit of $42,000 per
beneficiary.
Are contributions to an RESP tax deductible?
Unlike Registered Retirement Savings Plans (RRSPs), there are no tax deductions for
contributions made to an RESP.

Where does one open an RESP?

Begin by locating promoters of RESPs. The Canada Education Savings Grant (CESG) Program
provides a list of promoters to-assist in this regard.

How many years contributions be made to an RESP, and

can
how long can income remain sheltered in the plan? Does this
depend on the age of the beneficiary?
In the case of a non-family plan, contributions can be made up to and including the 22nd year
of the plan's existence. The family plan is a little more restrictive in that contributions must stop
in the year on the beneficiary's 21st birthday. Both types of plans must be terminated no later
than the 26th year. Depending on the type of plan, the age of the beneficiary is relevant.

Can a subscriber transfer from one RESP to another RESP?

Subject to the terms of the plan, partial or full transfers are permitted under the Income Tax
Act. The transfer of an amount from an RESP to another RESP is considered eligible for CESG
purposes if:
* there is a common beneficiary between the originating plan and the receiving plan; or
* a beneficiary under the'receiving plan is under 21 years of age, and is a brother or sister of a
beneficiary under the originating plan.
Otherwise, the CESG must be repaid and an overcontribution tax may apply.
If subscriber has two children in
a a family plan, is each child
eligible for the $400 Grant?
Yes. Eligible Grant limits are calculated for each beneficiary individually.

In the of a family plan, could all the investment

case
earnings and the grant be paid out in the form of an EAP to
only one of the beneficiaries, if it is felt that the others will
not attend post-secondary institutions?
Under family plan, the subscriber may select any or all of the named beneficiaries to receive
a
some all of the earnings and Grant up to each beneficiary's maximum grant limit. For
or
example, one beneficiary could receive all earnings and grant (up to $7,200) if the subscriber
chose to direct that EAPs be made that way.

In a who decides how the earnings and the grant

family plan,
are divided if one beneficiary decides not to pursue post-
secondary education?
With the exception of Group Plans, the subscriber decides how to divide the earnings and the
grant among remaining beneficiaries for educational purposes provided that none of the
beneficiaries receive more than $7,200 in CESG.

What happens if the beneficiary does not go to school?

Here are some alternatives should this occur:

•1. You may wish to leave money in the plan for a few years in case the beneficiary changes
his or her mind, if the plan allows you to do this;
2. You may name a new beneficiary;
3. you may use the Accumulated Income Payment (AIP)route if the fo!lowing conditions are
met:

* beneficiary is
the at least 21 years of age,
* plan has been
the in existence for at least 10 years, and there are no other eligible
beneficiaries, and
* the subscriber is a resident of Canada

The RESP earnings can be paid out to a subscriber in the form of an Accumulated Income
Payment (AIP).
Will I lose my money if my child does not go on to post-
secondary education after high school?
No. An RESP exist for 26 years before you must close it. If a child does not wish to pursue
can
post-secondary education immediately, it is recommended that you wait a few years until the
child decides whether or not to pursue his or her education. Rest assured that the money
invested in the RESP will continue to earn tax-sheltered income during this period. Should your
child decide never to pursue post-secondary education, you have the option of transferring the
earned income (up to a maximum of $50,000) into your Registered Retirement Savings Plans
(RRSPs), or that of your spouse. Finally, the money can be withdrawn subject to various tax
rates. Under all these circumstances, the grant is returned to the Government of Canada.
However, the interest earned on the grant remains with you, the subscriber.

What is the limit on the amount of Educational Assistance

Payments (EAPs) a beneficiary may receive as a first
payment?
The total of all EAPs that can be made to a beneficiary before he or she completes 13
consecutive weeks in a qualifying educational program is limited to $5,000. Once this period is
completed, the beneficiary can receive any amount of EAPs. Students requiring more than
$5,000 in EAPs may apply to HRDC for permission to receive larger EAPs. The promoter may
impose other restrictions within their plans with respect to EAPs. Beneficiaries should consult
with the promoter or trustee for specific information..

Can subscriber contribute to the plan after the beneficiary

a
begins receiving Educational Assistance Payments (EAPs)
from the plan?
Yes, but one must remember that contributions must cease 22 years after the plan has been
opened, and the plan must terminate in the 26th year after the plan has been opened. Please
note however, that under a family plan, contributions can only be made until the beneficiary
turns 21 years of age.

How will Educational Assistance Payments (EAPs) be taxed?

An EAP consists of earnings on contributions, earnings on the Grant and the Grant itself. EAPs
are taxed in the hands of the beneficiary. Since students typically have little other income, they
pay little or no tax on EAPs.

If the beneficiary does not pursue post-secondary education,

can the Accumulated Income Payment be rolled over in
either the subscriber's RRSP or the beneficiary's RRSP? How
long can the money sit in the plan after an AIP is made?
Investment earnings can only be returned to the subscriber under certain conditions.
Specifically,
(1) the plan must have been in existence for at least 10 years,
(2) all current and former beneficiaries must be at least 21 years of age and not currently
pursuing higher education, and
(3) the subscriber must be resident in Canada.
If these conditions are met, the subscriber may be allowed to receive an accumulated income
payment. The subscriber may choose to transfer the payment to a registered retirement savings
plan, without penalty, if the subscriber has sufficient room to absorb the amount of the transfer.
The subscriber also has the option to receive a cash payment. In this case, the promoter will be
required to deduct tax at source. When an AIP is made from an RESP, the subscriber must
terminate the plan by the end of February of the following year. The CESG will be returned to
the government when the first AIP is made. The AIP cannot be rolled over into the beneficiary's
RRSP.

Important Facts about Registered Education Savings Plans

• Any child can be the beneficiary;
• Parents, grandparents, relatives or friends may put .a combined total of $4,000 a year
into RESPs in respect of a particular beneficiary;
• Subscribers can contribute for up to 22 years after a non-family plan has been opened
and up to the year in which the beneficiary turns 21 years of age in a family plan;
•
Contributions to all RESPs on behalf of a beneficiary are subject to a lifetime limit of
$42,000;
• Contributions made to an RESP are not tax deductible, and are not taxed when returned
to the subscriber;
•
The money in an RESP grows tax-free until the beneficiary is enrolled full-time in a
qualifying program at a college, university or other recognized post-secondary
educational institution
•
Then, the beneficiary can use Educational Assistance Payments paid from the RESP to
help finance his/her post-secondary.education;
• If the beneficiary does not go on to full-time studies, another beneficiary can be named
(subject to the terms of the plan). However, in order to keep the CESG, the new
beneficiary must be under 21 years of age and either the new beneficiary is a brother or
sister of the former beneficiary or both the new and old beneficiaries are under 21 years
of age .and are related to the subscriber. RESPs also now permit the payment to the
subscriber of Accumulated Income Payments (AIP), or the roll over of the income to a
subscriber's or subscriber's spousal Registered Retirement Savings Plan, under certain
conditions.
• An RESP must be terminated by the end of the 26th year.
Date Modified: 2007-09-07
I•IF ! Huml•rl Re,our, s hurnaines
Development Canada D•etoppement
Social
=rid Rec•url•e• et
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Canad
Registered Education Savings Plans
Registered Education Savings Plans Registered Education Savings Plan (RESP)
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TABLE OF CONTENTS

• WHAT IS A REGISTERED EDUCATION SAVINGS PLAN (RESP)?

• OPENING AN RESP
• SAVING WITH AN RESP
•
CHOOSING THE RIGHT RESP FOR YOU
• SERVICE FEES
• MAKING YOUR MONEY GROW
• HELP FROM THE GOVERNMENT OF CANADA
•
USING YOUR RESP
• BEFORE YOU OPEN AN RESP
• WHERE CAN YOU GETMORE HELP?

Learning is the key to success at every stage of life. Education is among the best
investments you can make for the future. Close to 70% of all new jobs now depend
on some form of education after high school.

Because the Government of Canada believes so strongly in the value of education, it

willhelp you save by adding to the amount you put aside for a child's education.

This handbook tells you how to access programs that will help your savings grow faster. It also
gives you useful information about Registered Education Savings Plans (RESPs) and other
Government of Canada programs that can help you save for a child's education after high
school, including:

• a Canada Education Savings Grant (CESG) that is added to the money you put into
an RESP; and
• a Canada Learning Bond (CLB), that is an additional grant worth up to $2,000 that
may be available to you, depending on your family income.

Want to know more?

As you read this guide, you may have other questions about these programs. For more
information about RESPs and investment options, call the Financial Consumer Agency of Canada
(FCAC) at 1-866-461-3222.
For information about Government of Canada education savings plans, call 1 800 O-Canada (1
800 622-6232).
If you have a speech or hearing impairment, you can use the TTY number, 1 800 926-9105.
You can also visit www.canlearn.ca

WHAT IS A REGISTERED EDUCATION SAVINGS PLAN (RESP)?

A RegisteredEducation Savings Plan is a special savings plan that can help you, your family or
your friends save for education after high school. RESPs are registered with the Government of
Canada so that savings for education can grow tax-free until the person named in the RESP
enrolls in studies after high school.

OPENING AN RESP
Why should I open an RESP?

When you open an RESP for a Child, the Government of Canada will help you save by adding
money to your RESP through special savings incentives. These incentives are the Canada
Education Savings Grant and the Canada Learning Bond. They are only available if you open an
RESP. *

• Residents of Alberta who have an RESP may also be able to get additional grant money under
the Alberta Centennial Education Savings Plan. For more information call 1-866-515-2237, or
look on the Internet at http://www.advancededucation.gov.ab.ca/aces/.

Who can open an RESP?

Anyone parent, grandparent, other relative or friend can open an RESP for a child. You can
even open a plan for yourself.
Where can I open an RESP?

You can RESP at most financial institutions such as banks and credit unions, or with
open an
group plan dealersor financial service providers. Institutions and organizations that offer
RESPs.are known as RESP providers.

For a list of RESP providers, call the Financial Consumer Agency of Canada at 1-866-461-3222
or go to www.fcac,gc,ca.
What do I need to open an RESP?

You need to get a birth certifi care for your child from the provincial or territorial government
where your child was born. You will also need your own Social Insurance Number (SIN) from
the Government of Canada and a SIN for the child you are saving for. There is no cost or age
limit to get a SIN. Even a baby can get one.

How do I apply for a Social Insurance Number?

• Visit your local Service Canada Centre or Human Resource Centre of Canada (HRCC).
•
Call 1 800 O-Canada (1 800 622-6232) for more information.
•
Look on the Internet at www.hrsdc.gc,ca (keyword search 'SIN').

SAVING WITH AN RESP

Is there a minimum amount of money I need to put in an RESP?

The amount of money you put into an RESP depends on the type of RESP you choose and the
amount of money you choose to invest. Some RESPs have no minimum deposit requirements,
while others do. Before you decide on the type of RESP to open, be sure to shop around and fi
nd the plan that best fits your budget and the RESP provider that best meets your needs.
Note: The Government of Canada will still add to your savings, no matter how little you put
into your child's RESP.

Do I need a bank account to open an RESP?

No. You can open an RESP without having a bank account.

How much money can I put into an RESP?

You can put up to $4,000 into an RESP each year. Over your lifetime, you can invest up to
$42,000 for each person named in an RESP.

How often do I have to put money into an RESP?

Some types of RESPs require specifi c monthly contributions. Others let you put money into
your RESP whenever you want. Every RESP is different.

The sooner you start to save, the more your savings will grow. This is because you'll begin to
earn interest sooner. Even $5 a week can add up quickly, especially when government grants
are added to your savings.
Can I open an RESP for myself?
Yes. There opening an RESP. You can open a plan for a child, or you can
are no age limits for
name yourself the beneficiary of your plan. An RESP allows adults to earn
or another adult as
interest on their education savings tax-free. (Note: Adults cannot get the Canada Education
Savings Grant or the Canada Learning Bond).
CHOOSING THE RIGHT RESP FOR YOU
You can choose from three types of RESPs: family, individual or group plan. Before you choose
an RESP ask the RESP provider to explain the different types of plans so that you can decide on
a plan that best suits your needs.

Family Plan

In a family plan, you can name one or more children as benefi ciaries of the RESP, but they
must be related to you. They may be your children including adopted children
grandchildren, brothers or sisters.
Individual Plan

An individual plan is for one person. The person does not have to be related to you. Since there
are no age limits, you can even set up an RESP for yourself or another adult.

Group plans offered and administered by group plan dealers. Each plan has its own rules.
are
Be carefully and shop around to get the plan that best suits your
sure to read these rules
needs. Usually, group plan dealers must put the money in low-risk investments such as bonds,
Treasury Bills and Guaranteed Income Certificates (GICs). Usually, you have to sign a contract
agreeing to make regular payments into the plan over a certain period of time.
In a group plan, your savings are "pooled" with those of other people. The amount of money
your child gets is based on how much money is in the pool and on the total number of students
of the same age who are in school that year. Make sure you ask your group plan dealer what
happens to the money if the child does not continue with education right after high school. In
order to collect the RESP, the benefi ciary has up to the age of 26 to attend a post-secondary
educational institution.

SERVICE FEES
Some RESP providers charge service fees, others do not. Some may also limit the amount of
money you can put into your plan and tell you how often you can contribute. Before you open
an RESP, ask the RESP provider to explain any fees, limits, penalties or promises to make
regular payments. Shop around for the cost and type of RESP that best suits your needs.
MAKING YOUR MONEY GROW
How do I decide what to do with the money I put in an RESP?

Once you have decided whether to open a family, individual or group plan, ask your RESP
provider about your investment choices. You can leave your money in a savings account or
choose from a variety of options such as bonds, guaranteed investment certificates (GICs),
mutual funds or stocks. It is important to take your time. Ask your RESP provider questions
about your investment choices, including the pros and cons of each.

Note•" Sonde of your investment choices may have more risk, service fees or penalties. Make
sure you ask for a list of the fees or penalties that may apply.

Do I pay tax when I take money out of an RESP?

You will not pay taxes on the money you have invested in the RESP. The interest your
investment earns while it is in your RESP will be taxed, but only when the RESP is closed or
money is taken out to pay for the education of a person named in the plan as a beneficiary.
Since many students have little or no other income, they can usually withdraw the money tax
free.

HELP FROM THE GOVERNMENT OF CANADA

Canada Education Savings Grant

When you open an RESP for a child, the Government of Canada will add the Canada Education
Savings Grant (CESG) to your savings. Since 1998, more than two million children have benefi
ted from these grants.

Who can get the Canada Education Savings Grant?

Most children under 18 years of age can receive the grant, as long as they are Canadian
residents are named as benefi ciaries of the RESP and have a valid Social Insurance Number
(SIN), and at least $1 has been put into the RESP.
Note: There are special rules that apply for children in the years they turn age 16 or 17.

How do I get the Canada Education Savings Grant?

All you need to do to get a CESG is:

• Get a birth certificate from your provincial or territorial government and then get a SIN
for your child from the Government of Canada. There is no cost for a SIN. Anyone, even
a baby, can get one.

•
Choose an RESP provider. (RESP providers include most financial institutions such as
banks, credit unions, group plan dealers or financial service providers).
• Open an RESP for your child.
 • Put some money in your RESP.
• Ask your RESP provider to apply for the CESG on behalf of your child.

The grant money will be deposited directly into your child's RESP.

How much is the grant?

The amount of the grant is based on your family income. The amount can change over time as
your family income changes.
Depending on your family income, your child could receive an additional grant on RESP savings
that you make after December 31, 2004 on behalf of a child:

• If your net income is below $36,378*, the Canada Education Savings Grant will
family
give you 40 cents for every dollar on the first $500 you save in your child's RESP each
year. If you save more than $500, you will get 20 cents for every extra dollar, up to a
maximum of $2,000.
• If your net family income is below $72,756*, the Canada Education Savings Grant will
give you 30 cents for every dollar on the fi rst $500 you save in your child's RESP each
year. If you save more than $500, you will get 20 cents for every extra dollar, up to a
maximum of $2,000.

No matter what your net family income is, the grant provides at least 20 cents for every dollar
of the fi rst $2,000 of annual RESP savings made on behalf of a child. If you make $2,000 in
RESP contributions in one year, you will receive between $400 and $500 in CESG (depending
on your family income).

*2006 amounts These amounts are updated each year based on the rate of infl ation.

Your net family income is reported on your Canada Child Tax Benefit statement (commonly
known as "baby bonus", or "family allowance") that you receive from the Canada Revenue
Agency each July. It is important to apply to the Canada Revenue Agency for the Canada Child
Tax Benefit as it may affect the amount of CESG you will receive.

Canada Learning Bond

The Canada Learning Bond (CLB) is a Government of Canada grant to help families start saving
early, for their child's education after high school.
Who can get the Canada Learning Bond?
You can get the Canada Learning Bond if:

• Your child was 31st, 2003; and

born after December
• Your monthly Canada Child Tax Benefit payment (commonly known as "baby bonus"
or "family allowance") includes the National Child Benefit Supplement.

For families who Government of Canada will add to a child's RESP by making a first
qualify, the
payment of $500, plus extra payments of $100 a year for children up to the age of 15, as long
as you receive the National Child Benefi t Supplement annually. The total CLB available for a
child could amount to $2,000.

An additional $25 will be paid into the RESP with the fi rst $500 bond to help cover the cost of
opening the plan.
How do I get the Canada Learning Bond for my child?
All you need to do to get a CLB is:
 •
Apply birth certifi cate and then a SIN for your child.
for a

•
Apply to the Canada Revenue Agency for the Canada Child Tax Benefit Supplement.
•
Choose an RESP provider who offers the Canada Learning Bond. (RESP providers include
most financial institutions such as banks and credit unions as well as group plan dealers
or other financial service providers).

• Open an RESP for your child.

•
Ask your RESP provider to apply for the CLB on behalf of your child.

The bond money will be deposited directly into your child's RESP.

Do I have to put money into an RESP to get the Canada Learning Bond?
No. Even if you don't put money into your RESP, the Government of Canada will deposit the
Canada Learning Bond into the RESP you opened for your child.

USING YOUR RESP

How soon can the person(s) named in the plan start using the money?
The student can start receiving money from the RESP as soon as he or she is enrolled in a
qualified post-secondary educational program.

What is a qualifi ed educational program?

Qualified educational programs include apprenticeships and programs offered by a trade
school, CEGEP, college or university.
Usually, a qualified
educational program is a course of study that lasts at least three weeks in a
row, with at least 10 hours of instruction or work each week. A program at a foreign
educational institution must last at least 13 weeks.

Note: To find out more about qualified educational programs ask your RESP provider or call the
Financial Consumer Agency of Canada at: 1-866-461-3222.

Can RESP funds be used for students going to school part-time?

Yes. RESP funds can be used for either full- or part-time study in a qualified program.
What happens to the RESP if the person named does not continue
education after high school?

If a person named in the RESP decides not to continue education after high school, you may be
able to:

• Wait for a period of time. They may decide to continue studying later. RESP accounts can
remain open for up to 26 years. In special cases, some plans could remain open for as
long as 31 years.
• Transfer the money to a brother or sister's RESP if he or she decides to continue his or
her education after high school.
•
Transfer the money into a Registered Retirement Savings Plan (RRSP) to help you save
for your retirement.
•
Withdraw the money. Ask your RESP provider for details.

Make sure you check with your RESP provider to find out about any conditions that may apply
to the plan if your child does not continue education after high school.
If you withdraw the money, how much tax will you have to pay?
You will not be taxed on the amount you contributed to the RESP, but you will have to pay
taxes on the money you earned in your plan as interest.

This money is called accumulated income. It will be taxed at your regular income tax level, plus
an additional 20 percent.

You may withdraw the income earned in the RESP if:

•
all the persons named in the plan are at least 21 years old;
• you are a Canadian resident; and
• you opened the RESP at least 10 years ago.

What happens to the Government of Canada grants if the person named

in the RESP decides not to continue education after high school?

The Canada Education Savings Grant may be used for another child's education. The Canada
Learning Bond cannot be transferred to another child and must be returned to the Government
of Canada. The amount that you saved and the interest it earned goes back to you.

Is there a time limit?

• An RESP can stay open for a maximum of 26 years. In special cases, some plans could
remain open for as long as 31 years.

BEFORE YOU OPEN AN RESP...

•
Look for anRESP provider (bank, credit union, group plan dealer or fi nancial service
provider) that best meets your needs.
• Make sure you have a Social Insurance Number (SIN) for yourself and the person named
in the RESP.
•
Decide if you want to manage your savings yourself or obtain the services of a fi nancial
advisor.
•
Decide if you want to open an individual, family or group plan.
Then ask your RESP provider these questions:
• Does it cost anything to open an RESP?
• Once I have opened an RESP, will I have to pay any fees? If so, what are they for and
how much will I have to pay?
• Do I have to put in a minimum amount of money to open an RESP?
• Do I have to make a regular payment?
•
What happens if I cannot make a regular payment? Do I lose my investment?
•
What are my investment choices? What are the pros and cons of each choice? Can the
value of my investment go down?
• Can I withdraw money if I need it? Are there penalties withdrawing money early?
for
• Can I transfer the RESP to another person or to another RESP provider? What is the cost
to transfer?
•
What will happen to my savings in the RESP if the recipient of the RESP does not continue
his or her education after high school?
• Does the RESP provider limit the types of qualifi ed educational programs that I can use
my savings for?
 • What happens if I close my RESP early?
WHERE CAN YOU GET MORE HELP?
For more information about RESPs and banking, contact the Financial Consumer Agency of
Canada (FCAC):
Toll-free: 1-866-461-3222

E-mail: info@fcac.gc.ca
Web site: www.fcac.gc.ca
The Financial Consumer Agency of Canada is an agency of the Government of Canada. FCAC
makes sure that banks respect the laws that protect you.
For more information about the Canada Education Savings Grant or the Canada Learning Bond,
or to order a copy of this brochure, call 1 800 O-CANADA (1 800 622-6232). If you have a
speech or hearing impairment, use the -I-I-Y number, 1 800 926-9105.
Website: www.¢anlear•.¢•

Canada Education Savings Grants and Canada Learning Bonds are Government of Canada
initiatives offered by Human Resources and Social Development.

Date Modified: 2007-05-07

 COURT FILE NO.: 52782/06
DATE: 2007-07-23

ONTARIO
SUPERIOR COURT OF JUSTICE

GLORIA FOSTER
Applicant
and

DUSTY LACE FOSTER, MISTY DIANE FOSTER

AND TAYLOR RUBY FOSTER
Respondents
BEFORE: Justice B.T.Granger
COUNTSEL: Gordon Good, for the Applicant
Marian Jacko, for the Office of the Children's Lawyer
ENDORSEMENT

[1] Gloria Foster is the mother of the three minor respondents, Dusty Lace Foster born June
23, 1994, Misty Dianne Foster born May 28, 1996 and Taylor Ruby Foster born May 28, 1996.

[2] On June 30, 2006, I approved the Minutes of Settlement in Court File Number #33515/00
and in Court File Number #42910, which resulted in Judgment in favour of each minor in the
sum of twenty thousand six hundred and thirty dollars ($20,630.00), inclusive of interest. The
judgment in favour of each of the minor children arose from injuries suffered, by their father
Clarence Foster in an automobile accident. The claims of the infants were derivative claims
pursuant to the provision of the Family Law Act, R.S.O. 1990.
[3] Pursuant to paragraph six of my Judgment dated June 30, 2006, I ordered that the minors
funds be held in trust by Gordon Good, a Barrister and Solicitor, pending my further order as to
the manner in which the minor plaintiffs' funds were to be invested pending each minor child
attaining the age of 18 years.
[4] Ms. Foster wishes to manage the settlement funds belonging to the minors and requests
an order appointing her as guardian of the property of each minor. As part of her plan of
management, Ms. Foster proposes to pay $4,000.00 annually, which is the maximum
contribution allowable at the present time into a Registered Education Savings Plan,
("R.E.S.P."), for each child, to fund each of their post secondary educational pursuits.
 -2-

[5] The evidence indicates that each of the children based on their scholastic records to-date,
are to be accepted as a student at a university or college in the future. Ms. Foster and her
likely
husband are concerned that as a result of the automobile accident, they will be unable to
contribute financially to the post secondary school expenses of the children.

[6] If the settlement fund of each child is contributed to an R.E.S.P. at the rate of $4000.00
per annum, Human Resources and Skill Development Canada will make a contribution equal to
20% of the contribution made by the subscriber. These figures may increase as a result of
changes to the Federal Budget.
[7] If a child goes to a post secondary school, all of the funds in her R.E.S.P. will be
available to fund, in part, her education. If any of the children do not attend a post secondary
education institution, the contributions made by Human Resources and Skill Development
Canada must be returned to Human Resources and Skill Development Canada and the remaining
funds in the R.E.S.P. will belong to the beneficiary of the plan.

[8] In my view, the investment of each of the minor's settlement funds in an R.E.S.P. would
be in the best interest of each minor so long as the funds can be maintained as the separate funds
of such minor, and the investments are conservative and the risk of loss or reduction in value is
kept to a minimum. I am satisfied these objectives can be achieved by investing the settlement
funds of each child in their own R.E.S.P.
[9] In order to create an R.E.S.P., there must be a subscriber and a beneficiary. In this case, I
am satisfied that Gloria Foster, as guardian of the property of each of the minor children, can
apply with court authority as Trustee on behalf of each child as.a subscriber for an non-family
R.E.S.P., and direct that the minor child subscriber shall be the irrevocable beneficiary of the
R.E.S.P.

[10] In rejecting'
this type of investment in the past, courts have been concerned that creditors
of the guardian of property would attempt to seize the funds to satisfy debts of the guardian. In
this case, the minors' settlement funds are presently being held in trust by Gordon Good. Gloria
Foster, as the guardian of property of each of the minors, can direct Gordon Good to transfer the
funds into a trust account in favor of each minor with MacKenzie Funds who would, on an
annual basis, make the maximum contribution into the minors' R.E.S.P. I am satisfied that if this
procedure is followed, the guardian would have no beneficial interest in the funds of each minor,
whether the funds are in the MacKenzie Funds or the R.E.S.P., and as such a creditor of the
guardian of property would have no claim against the property.
[11] It is imperative that once the funds have been deposited in the trust fund and/or the
R.E.S.P., such funds only be paid out to the minor upon her attaining her majority or to an
educational institution or pursuant to an order of this court.
[12] The Management Plan of the settlement funds of the minors provides for the investment
of such funds in the trust funds and/or R.E.S.P. to be in mutual funds. Although the suggested
mutual funds for investment of the settlement funds are conservative and minimize the risks of
 -3-

investment loss while providing a potential for growth of the capital, the use of mutual funds for
the investment of the only asset of the minors, subjects such assets to a reduction in value if there
is a downward trend in the value of the stocks in the mutual funds. This risk exists
notwithstanding the positive average return on the mutual funds over the last 10 years.
[13] In my view, the settlement funds must be invested while in trust and/or in an R.E.S.P. in
guaranteed investment certificates to ensure the funds are available for the minors personally or
for their post secondary education. MacKenzie Funds must agree, in writing, to abide by the
terms of the Management Plan.

[14] Mr. Good shall amend the Management Plan to reflect these changes and shall submit
same to Ms. Jacko for approval on behalf of the Office of the Children's Lawyer.
If counsel are
unable to agree on the terms of the amendment plan, I may be spoken to.

[15] Counsel may make written submissions on costs subsequent to the Management Plan
being approved, and the order appointing Gloria Foster as guardian of the childrens' property
being issued.

"Mr. Justice B. T. Grange r''

Mr. Justice B. T. Granger

DATE: August 23, 2007.

Periodic payment, medical malpractice actions

116.1 (1) Despite section 116, in a medical malpractice action where the court determines that the award
for the future care costs of the plaintiff exceeds the prescribed amount, the court shall, on a motion by the
plaintiff or a defendant that is liable to pay the plaintiff's future care costs, order that the damages for the
future care costs of the plaintiff be satisfied by way of periodic payments. 2006, c. 21, Sched. A, s. 17.

The order

(2) an order under subsection (1), the court shall determine the amount and frequency of
If the court makes
the without regard to inflation and shall order the defendant to provide security for those
periodic payments
payments in the form of an annuity contract that satisfies the criteria set out in subsection (3). 2006, c. 21,
Sched. A, s. 17.

Form of security
(3) The annuity contract shall satisfy the following criteria:

1. The annuity contract must be issued by a life insurer.

2. The annuity must be designed to generate payments in respect of which the beneficiary is not required to
pay income taxes.

3. The annuity must include protection from inflation to a degree reasonably available in the market for such
annuities. 2006, c. 21, Sched. A, s. 17.

Directions from the court

(4) If the parties are unable to agree on the terms of the annuity, either party may seel• directions from the
court about the terms. 2006, c. 21, Sched. A, s. 17.

Filing and approval of plan

(5) Unless the court orders otherwise, a proposed plan to provide security required by an order under
subsection (2) shall be filed with the court within 30 days of the judgment or within another period that the
court may specify, and the court may approve the proposed plan, with or without modifications. 2006, c. 21,
Sched. A, s. 17.

Effect of providing security

(6) If security is provided in accordance with a plan approved by the court, the defendant by whom or on
whose behalf the security is provided is discharged from all liability to the plaintiff in respect of damages that
are to be paid by periodic payments, but the owner of the security remains liable for the periodic payments
until they are paid. 2006, c. 21, Sched. A, s. 17.

Effect of not providing security

(7) If a proposed plan is not filed in accordance with subsection (5) or is not approved by the court, the court
shall, at the request of any party to the proceeding, vacate the portions of the judgment in which periodic
payments are awarded and substitute a lump sum award. 2006, c. 21, Sched. A, s. 17.

Application for lump sum

(8) The court may order that the future care costs be paid in whole Or in part by way of a lump sum payment
to the extent that the plaintiff satisfies the court that a periodic payment award is unjust, having regard to the
capacity of the periodic payment award to meet the needs for which the damages award for future care costs
is intended to provide compensation. 2006, c. 21, Sched. A, s. 17.

Amount to offset liability for income tax

(9) If the court does not make an order for periodic payments under subsection (1) or makes an order for a
lump sum payment under subsection (7) or (8), the court shall make an award for damages that shall include
an amount to offset liability for income tax on income from investment of the award except to the extent that
the evidence shows that the plaintiff will not derive taxable income from investing the award. 2006, c. 21,
Sched. A, s. 17.

Periodic payments exempt from garnishment, etc.

(10) Periodic payments of damages for future care costs are exempt from seizure or garnishment to the
same extent that wages are exempt under section 7 of the Wages Act, unless the seizure or garnishment is
made by a provider of care to the plaintiff and the seizure or garnishment is to pay for the costs of products,
services or accommodations or any one of them with respect to the plaintiff. 2006, c. 21, Sched. A, s. 17.

Future review

(11) In an order made under this section, the court may, with the consent of all the affected parties, order
that the award be subject to future review and revision in such circumstances and on such terms as the court
considers just. 2006, c. 21, Sched. A, s. 17.

Regulations
(12) The Lieutenant Governor in Council may make regulations prescribing or calculating the amount of
future care costs for the purpose of subsection (1). 2006, c. 21, Sched. A, s. 17.

Definitions

(13) In this section,

"future care costs" means the cost of medical care or treatment, rehabilitation services or other care,
treatment, services, products or accommodations that is incurred at a time after judgment; ("coOts des soins
futurs")
"medical malpractice action" means an action for personal injuries alleged to have arisen from negligence or
malpractice in respect of professional services requested of, or rendered by, a health professional who is a
member of a health profession as defined in the Regulated Health Professions Act, 1991 or an employee of
the health professional or for which a hospital as defined in the Public Hospitals Act is held liable; ("action
pour faute professionnelle m•dicale")
"prescribed amount" means $250,000 or such greater amount as may be prescribed by regulation, calculated
as a present value at the time of judgment in accordance with the Rules of Civil Procedure. ("montant
prescrit") 2006, c. 21, Sched. A, s. 17.
Transition

(14) This section applies to all proceedings in which a final judgment at trial or final settlement has not been
made on the day the Access to Justice Act, 2006 receives Royal Assent. 2006, c. 21, Sched. A, s. 17.
 ROLE OF THE PUBLIC GUARDIAN AND TRUSTEE
IN MOTIONS FOR APPROVAL OF SETTLEMENTS
ON BEHALF OF ADULT PARTIES UNDER DISABILITY

1. Authority
Pursuant to Rule 7.08(5) of the Rules of Civil Procedure, a Justice of the Superior
Court may direct that the Public Guardian and Trustee be served with the Motion
Record and order that a written or oral Report be made, "stating any objections
he or she has to the proposed settlement and making recommendations, with
reasons, in connection with the proposed settlement".

The endorsement of the Justice requesting the Report is an order of the Court,
effective on the date on which it was made: Rule 59.01. The Order specifies the
issues to be covered in the Report. Endorsements also generally provide for the
Public Guardian and Trustee to obtain additional information from the solicitor,
upon request. The Public Guardian and Trustee's authority to make the Report is
derived from this Order.

2. Role of the Public Guardian and Trustee

The role of the Public Guardian and Trustee is to review the Motion Record,
request any additional documentation on the issues to be reviewed, and prepare
a written Report with recommendations to the Court. The Public Guardian and
Trustee reviews the Motion Record in the interests of the adult party under
disability and makes recommendations to assist the Court in exercising its parens
patriae duty and it role under Rule 7.08.
The Public Guardian and Trustee does not review draft materials in support of
Motions for approval of settlements on behalf of adult parties under disability.

3. Procedure

Upon receipt of the Court's order requesting a Report under Rule 7.08(5), the
Public Guardian and Trustee will write to the solicitor to request service of the
Application or Motion Record. Upon receipt, the Record is reviewed to determine
whether or not any additional information is required. Depending on the contents
of the original Record, additional information may be required in affidavit form or
by correspondence. Additional information provided by the solicitor to the Public
Guardian and Trustee is copied to the Court and included in the Public Guardian
and Trustee's Report, since it is usually referred to in the Report. Reports are
sent to the requesting Justice, but the Application or Motion may be considered
by another Justice of the Superior Court. Reports are copied to the moving
party's solicitor (usually by fax transmission) concurrently with delivery to the

© Public Guardian and Trustee, 2007.

Superior Court. The moving solicitor is provided an opportunity to respond to the
Public Guardian and Trustee's Report by way of letter to the Court. These
comments should be copied to the Public Guardian and Trustee's counsel who
authored the Report.

On occasion, follow-up may be required by the Court as a result of the Public

Guardian and Trustee's recommendations. This may occur by way of court
attendance or in writing, depending on the nature of the Court's order. If the
follow-up is to occur in the future, this may be indicated by an endorsement
accompanying the original Judgment.
Attached is a copy of the Checklist currently in use by the Public Guardian and
Trustee when reviewing Applications and Motions for approval of settlements. Of
course, the matters to be reviewed are directly related to scope of the Court's
order, which may require a review of one or two issues only.
At thistime, the Public Guardian and Trustee does not request fees for
preparation of Reports. This may change in the future.
4. Timing
Reports are prepared by
the Public Guardian and Trustee in the order in which
endorsements are received by the Court. The volume of requests varies from
time to time and, in 2007, the Public Guardian and Trustee has experienced a
significant increase in the number of requests from the Court.
The turnaround time for Reports from the Public Guardian and Trustee varies.
from two weeks to six weeks or more and depends on the timeliness of receipt of
materials requested from counsel and the availability of PGT counsel.

Attachment Checklist

Laurie S. Redden
July 25, 2007

© Public Guardian and Trustee, 2007.

 CHECKLIST FOR MOTIONS FOR APPROVAL OF SETTLEMENTS

FOR PARTIES UNDER DISABILITY UNDER RULE 7.08

Documents required by rule 7.08(4):

(a) Affidavit of litigation guardian settinq out the material facts and
reasons supporting the proposed settlement and the position of the
litigation guardian in respect of the settlement;
(b) Affidavit of solicitor for the litigation guardian settinq out the
solicitor's position in respect of the proposed settlement;
(c) The written consent of a minor over the age of 16 years, unless
a iudge orders otherwise; and
(d) A copy of the proposed Minutes of Settlement.

Evidence:

(a) copy of Statement of Claim;

(b) theory of plaintiff's case and defence, including facts and liability;
(c) extent of damages/injuries (include selected important medical reports,
including reports which address the stability of the condition of the
party under disability, particularly in cases involving acquired brain
iniuries);
(d) reasons for settlement v. trial;- _•1
(e) rationale for and details of quantum of damages; •l [•
(f) apportionment of damages [i •-• l|
•'•
allocation of settlement funds among all .plaint•s,
a. partial indemnity costs
rsemerttsqSa-qd
b. assessable d isbu
•-•

awarded; •er/d/a•tS.I .•. ih#|udingl |

•.
(h) proposed management of f•ds •6rl
Parties u)•d•r Di•s•a bility
par• u•er•c•i•ability
F•°_r A, d ultauthoriz• •p•erson
a. Is there a ICqa•y to manaqe the funds?
i. Attorney under a •ontinuing power of attorney for property;
or
ii. Guardian of property appointed by Court or PGT (must
include a formal Manaqement Plan).
Copy of authority should be included.
b. Are there restrictions or conditions on guardian's authority (ie.
amendment to Management Plan or posting of security required
following settlement of a claim)
c. Will the attorney or guardian be retaininq professional assistance to
manage the funds? (This is advisable if there is a siqnificant capital
fund to be manaqed.)
c. What is the proposed management plan for the funds?

© Public Guardian and Trustee, 2007.

 4

d. Should there be a passing of accounts scheduled in the future?

e. If applicable, the impact of settlement on other income of the adult
under disability (ie. Ontario Disability Support (ODSP), welfare
payments, OAS or CPP.) There are methods to structure personal
injury awards to maximize and continue the receipt of ODSP benefits
which must be arranged prior to jud.qment.)

For I•linors
An application to appoint a guardian of property is made
contemporaneously with the approval of the proposed settlement. In
the guardianship application consideration is given to the following:
a. The qualifications of the proposed guardian;
b. The proposed management plan;
Does the plan reflect the future care needs of the minor? Is
there a satisfactory investment plan? Is the minor's interest in
the assets adequately protected? Does the plan provide for
reasonable disbursements for the benefit of the minor that are
related to the injury suffered?
c. Is there a requirement for the guardian to account?
d. Is the guardian of property claiming compensation? If so, how
will it be calculated?
e. Does the Judgment require a capacity assessment prior to the
birthday?
minor's 18 th
As the Judgment in the .quardianship proceeding •.nd•e
management
I• of d•t• ointed under
th C• ss• thatt •man•
I•t, th ve• e•nt !n and the
authorized disbursements•

(i) Has a structured settl#me•t •6en•s•dered or proposed. Why or

not
i. Options•various structures considered and rationale;
ii. Rationale for terms of pa•icular structure bein•
recommended (commencement date, term, payments,
guarantee period, balloon payments for post-seconda•
education, vehicles, medical assistance devices or other
future needs etc.)
iii. Rationale of structure v. private investment- rate of
return, future care.
(i) Plans for investment or disposition of any lump sum which is not
included in a structure;
(k) Income tax impact of se•lement on pa•y under disability;
(I) Will any or all of the funds be paid into Cou• pursuant to rule 7.09?
(This is required under Rule 7.09 if there is no le#ally authorized
person to manage the funds.)

© Public Guardian and Trustee, 2007.

 Costs to solicitor for litigation _cluardian
(a) Copy of retainer- continqency or hourly;
i. provide summary of time, dockets, year of call and hourly
rate of each counsel;
ii. List major steps taken in the litigation and time for each; eg.
discoveries, any motions, settlement conferences, mediation;
(b) Total claim for leqal fees and disbursements for all plaintiffs;
(c) Amount recovered from defendant(s) for fees and disbursements;
(d) Balance of fees and disbursements over and above partial indemnity
costs claimed from party under disability;
(e) If there are FLA claimants or other plaintiffs, the proportion of leqal fees
and disbursements contributed from their settlement, whether or not
parties under disability.
Terms of Order/Judgment
(a) approving the terms of the settlement on behalf of the party under
disability
(b) ordering payment of legal fees, disbursements and G.S.T. to solicitor for
the litiqation guardian;
(c) ordering disposition of all funds:
i. into court to the credit of the party under disability (if a
minor, specify that funds are to be paid out at 18, subject to
any further order that the court may in the meantime make);
or
ii. to a guardian of property for the minor to be appointed under
the Children's Law Reform Act contemporaneously with the
approval of the proposed settlement; or a .qua•ian of

under disability; or
iii. to astructure•:t•et
property or, fd•t an
property; or
|/
ldlte••, l.l•.r•e
property who has already been
disability under the Substitute
under a continuin,q pow.,er-0f

le
•
app.0•rt6•ll•rlthe
DecisiOns

ati•ly
Actt•r
adult under
an attorney
at•;ne•V •Lgj•n I•/the adult

nts to a .quardian of
to an attorney for

a combinatio_•
fu--•s ••b---•
paJd•o other plaintiffs, such as Family LawAct
claimants, including contribution to leqal costs;
Unless aguardian of property is appointed at the time of the motion for
approval of the settlement (for minors) or in advance of the settlement or
contemporaneously (for adults), the funds of the party under disability shall
be paid into Court (rule 7.09) unless the Court orders otherwise..(It is not
acceptable to permit disposition of funds to a "trustee" for an adult party
under disability, or for a minor, unless the minor permanently resides
outside Ontario.)

© Public Guardian and Trustee, 2007.

 (e) A guardian property cannot be "appointed" in the same order approving
of
a settlement for a party under disability. A separate application must be
made to the Court under the Children's Law Reform Act for a minor, or the
Substitute Decisions Act for an adult, for the appointment of a guardian of
property. For an adult, the appointment of a guardian of property should
pre-date the motion for approval of a settlement, since other funds such as
SABs are usually in pay well in advance of any settlement. By Practice
Direction in Toronto, applications under the Substitute Decisions Act must
be scheduled on the Estates List in Toronto. If the guardianship is not in
place by the time of the settlement motion,_a separate guardianship
application must be issued at the Estates Office with a separate court file
number but may be heard by the same Justice considerinq the Motion for
approval. The guardianship application must follow the requirements of
the Substitute Decisions Act. If the application is to be read concurrently
with a tort settlement, the SDA application must also comply with the
requirements for summary disposition under that Act as the matter will be
decided without a hearing. The Public Guardian and Tr•st•e• is a party
respondent and must be •s-erved with the applicatio•p•, •dn•[minimum of 10
days' notice. Applications under the Children's E•a•Ref•m Act are issued

••
motion for approval of the settlem
for approval.
T---•-•-•--•-• •_i•te
. •
ra
• , / •
at the Estates Office but may be heard b•t t• sa•r•ud• hearing the
lt•r•oLa'd'eousf•J with the motion
U
t•lement should require service
on the Children's
service because it provideJ•g•4•heck r) thatPlease do not dispense with this
money is paid into court, as
ordered.

Laurie S. Redden Tel. 416-314-2777

Deputy Public Guardian and Trustee & General Counsel

Linda Waxman Tel. 416-314-8039

Senior Counsel
Office of The Children's Lawyer

Amended October 9_2007

© Public Guardian and Trustee, 2007.

 CHECKLIST FOR APPLICATIONS
TO APPOINT A GUARDIAN

Notice of Application
under the Substitute Decisions Act, section 22 or 55
or both, to declare an individual incapable of managing property; or
incapable of managing personal care; or both. In the case of an application
for guardianship of personal care, order must specify whether it is for full or
partial guardianship and, if the latter, specify the areas in which the
individual is incapable and the guardian has authority (see section 45 for list
of areas). In Toronto, by Practice Direction, the Notice of Application must
be issued at the Estates Office and receive a separate court file number
from any other civil litigation in which the incapable person is a party.
Outside of Toronto, the Notice of Application must be issued with a new
Court file number in the Superior Court of Justice.

Affidavit of proposed Guardian indicating the guardian's consent to act, the

relationship with the incapable person, qualifications, other suitability,
consultation with relatives and friends, consultation with experts as required
for the duties.

Detailed Management Plan (for property)s. 70(1)(b); and/or Guardianship

Plan (for personal care) s. 70(2)(b). These are prescribed forms under the
Act. The plans should include the current state of assets or personal care,
in addition to the plans for the future. If there are funds held by the Court
for the incapable person, this must be noted in the plan as well as the
guardian's intention to withdraw and manage the funds. If the Accountant
of the Court is to pay the funds out of Court, this must be so ordered in the
guardianship order.
Evidence of incapacity: differs if the Application is for guardianship of
property or personal care and whether there will be a hearing or it will be
heard by "summary disposition" (no hearing, which includes guardianship
applications over the counter contemporaneously with a Rule 7.08
settlement);
(a) For appointment of a property guardian, with a hearing, evidence required
is that which is sufficient to satisfy the Court of the incapacity of the
respondent, based on the test in section 6 of the Substitute Decisions Act.
The report of the medical practitioner or capacity assessor should describe
in some details the specific functions the individual is unable to perform.
Mere statements that the individual is "incapable of managing property" are
not sufficient.
(b) For appointment of a property guardian on summary disposition, the
evidence of incapacity must include one statement by a capacity assessor

© Public Guardian and Trustee, 2007.

 and another by a person who has been in contact with the incapable
person in the preceding 12 months (section 72).
(c) For appointment of a guardian for personal care with a hearing, the
evidence required is that which is sufficient to satisfy the Court of the
incapacity of the respondent, based on the test in section 45 of the
Substitute Decisions Act. The report of the medical practitioner or
capacity assessor should describe in some detail the specific functions of
personal care that the individual is unable to perform. Mere statements
that the individual is "incapable of his or her personal care" are not
sufficient. Where the evidence substantiates or the order sought is for
personal care guardianship of specific functions only, the Order should
state the functions over which the guardian has authority, or if all, state
that it is an order for full guardianship for personal care. A statement by a
person who has been in contact with the incapable individual in the
preceding 12 months should also be included [section 71(1)].
(d) For appointment of a guardian for personal care by summary disposition
(without a hearing), two statements by capacity assessors are required
pursuant to section 74 of the Act.
The Court's powers on applications for summary disposition are listed in
section 77.

5. Service:

(a) Service on the incapable person is mandatory under the Act [section 69(1)
(1) for property and section 69(3)(1) for personal care] and the Court of
Appeal has held that failure to do so is fatal to the order appointing the
guardian. The consent of the incapa.ble person is sometimes offered but
should be questioned if the person is incapable, did he or she have the
capacity to make informed consent to the appointment of a guardian? Note
the rights advice and the statement mandated by sections 70(1)(c) and
70(2)(c) of the Act.
(b) Service on family members: parents, siblings and children pursuant to
section 69(6). The Superior Court has held that although this section is
mandatory, relatives may consent in writing to the appointment of the
guardian and waive their right to service under the Act, to eliminate the need
for service.

(c) Service on the Public Guardian and Trustee, who is a party respondent, is
also mandatory. The Court should expect to receive a letter or report from
OPGT to counsel and the Court, or a personal appearance, commenting on
the application. We appreciate being served within the ten days prescribed
by the Rules of Civil Procedure.

© Public Guardian and Trustee, 2007.

 9

Has the incapable person responded to the application or indicated a desire

to respond? Does he or she require legal counsel? If so, the Court may
direct the Public Guardian and Trustee to arrange legal representation to be
provided for a person whose capacity is in issue in a proceeding under the
Substitute Decisions Act [section 3(2)].

Does the Order contain a time period within which the guardian of property
should pass accounts? Many judges find this advisable after one or two
years, to ensure the guardian is performing his or her duties and keeping
records in accordance with the Act. It may also be requested as an
alternative to the ability to post security. The obligation to keep records and
detailed requirements for both types of guardians are set out in O. Reg.
100/96.

Security: Is the guardian of property required to post security? If so, in

what amount? The following clause should be inserted in the Order:

"THIS COURT ORDERS that (name of applicant) be and is appointed as

the Guardian of Property upon posting a bond with the Registrar of this
Court in the amount of $ .00 and that this Order shall not be issued
until such a bond is posted."

The Public Guardian and Trustee is entitled to charge a fee for reviewing
guardianship applications, currently in the amount of $265. [$250. plus $15.
G.S.T.]. These fees are usually fixed in the guardianship Order.
10. Guardianship Orders must provide for a copy to be served on the Public
Guardian and Trustee, to be included in the public Register of Guardians
under O.Reg.99/96.

11. The appointment of a guardian of property should predate any approval of a

monetary settlement for the incapable person under Rule 7.08. It is
suggested that applications under the Substitute Decisions Act be made
immediately in situations where funds are payable upon the commencement
of the disability of the incapable person, such as attendant care benefits, no
fault benefits and payments for medical and rehabilitative services.

This checklist is for the assistance of counsel only and should not be construed as legal advice or the policy
or position of the Public Guardian and Trustee.

October 9, 2007

© Public Guardian and Trustee, 2007.