Québec – lawyer’s action dismissed as premature for pre-empting client’s right to opt for conciliation and arbitration – #433

In Landry v. Gagné, 2021 QCCA 128, Québec’s Court of Appeal upheld the dismissal of a lawyer’s action which pre-empted the client’s right to require conciliation and, if need be, arbitration of a dispute over an account by way of process set out by Regulation respecting the conciliation and arbitration procedure for the accounts of advocates, CQLR c B-1, r 17.  While the process is asymmetrical in that only the client can opt not to engage in it, the Québec Court of Appeal in Conseil d’arbitrage des comptes des avocats du Barreau du Québec v. Marquis, 2011 QCCA 133 determined that the process qualified as a consensual arbitration and not a statutory and therefore exempt from judicial review.

In first instance, the Court of Québec in Landry v. Gagné, 2019 QCCQ 1447 dismissed the lawyer’s action as premature because the action prevented the client from engaging in the alternative dispute resolution procedure provided for in the Regulation respecting the conciliation and arbitration procedure for the accounts of advocates, CQLR c B-1, r 17 (“Regulation”). That Regulation issued under the Act respecting the Barreau du Québec, CQLR c B-1 which, itself, issued pursuant to the Professional Code, CQLR c C-26

The lawyer sent the client a December 21, 2016 letter in which the lawyer informed the client that he charged the client $52,000.00 for fees and disbursements related to a matter conferred by the client to the lawyer.  The letter offered to reduce the amount by $5,000.00 if paid in thirty (30) days.  The letter bore the mention that interest on the ‘account’ (“compte”) accrued from the date of the letter.

On January 9, 2017, the client requested the details of the account.  In reply, the lawyer initiated an action in Court of Québec on May 5, 2017.

In a September 26, 2017 defense, the client mentioned that he had never received an account and therefore never had the chance to engage in conciliation and, if need be, arbitration of the invoice provided by the Regulation.  The client argued that the action was premature and should be dismissed.

The lawyer responded on December 18, 2017 by communicating his exhibits including a detail of the account entitled ‘December 21, 2016 detailed invoice’.  The client replied by reiterating his right to engage in the process set out in the Regulation and, within the delay set by the Regulation, applied for conciliation, the step precedent to arbitration.

The judge in first instance determined that the December 21, 2016 letter was not an account within the meaning of article 88 of the Professional Code, CQLR c C-26 or article 1 of the Regulation.  Rather, the letter was a demand for payment more like a demand letter and sent by registered mail.  The judge held that the client was entitled to benefit from the conciliation and arbitration process set out in the Regulation and that the lawyer, by ‘hastily’ instituting an action, hindered the client’s rights.

The client applied unsuccessfully to quash the appeal.  The minutes of hearing, reproduced in Landry v. Gagné, 2019 QCCA 1181, note that the Court of Appeal justice hearing the application [informal translation] ‘offered the parties the opportunity to proceed to a settlement conference’.

On the merits of the appeal, the Court upheld the decision in first instance.  Debating the use of the term ‘account’ in the reasons and on the facts, the Court held that the judge’s approach was reasonable.  The Court concluded that the December 21, 2016 letter served more to inform the client of a charge without specifying the hours, the rate or the description of the services.

urbitral notes – First, for more on the conciliation and arbitration process set out in the Regulation, see “Québec – arbitration imposed by statute remains consensual if opportunity available to renounce – #204” regarding Boisvert v. Selvaggi, 2019 QCCS 1673.  In that case, Mr. Justice Kirkland Casgrain dismissed an attempt at judicial review of an award issuing from arbitration imposed by statute.  Relying on the reasoning and result in Conseil d’arbitrage des comptes des avocats du Barreau du Québec v. Marquis, 2011 QCCA 133, Casgrain J. held that such arbitrations remain consensual if the legislation allows opportunity to renounce to its application.  Being consensual, such arbitrations were subject not to judicial review but to annulment proceedings based on limited grounds familiar to practitioners practising international commercial arbitration.

Second, in that case Casgrain J. dismissed Plaintiff’s attempt at judicial review.  The Court of Appeal in the 2011 Conseil d’arbitrage des comptes des avocats du Barreau du Québec v. Marquis had decided that the arbitration of attorneys’ accounts was consensual despite being created by statute.  As a result, Casgrain J. held that the state of the law in Québec prevented the court from undertaking judicial review.

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