Is a lawyer required to advise a client to not spend money on their legal divorce proceedings?

According to Mr. Justice Ferguson in the October 29, 2008 decision of Khan v. Yakub, during a legal divorce proceeding, a judge should not require one spouse to reimburse the other spouse’s legal fees if that spouse’s lawyer failed to exercise “professional judgment as to what the litigation was worth”.

In that case, the spouses separated in 1998. They litigated their financial issues until 2000 when they settled on the basis that the father would pay the mother child support for the four children based on his annual income of $72,000, resulting in child support of $1,655 per month. Then, in August 2002, the husband returned to court to reduce the child support amount, based on his self-employment income. He contended that his annual income was $51,000, resulting in child support of $1,186 per month. The wife contended that it was much higher.

After extensive litigation, including the use of expert accountants to study the husband’s income, the case was settled on the basis that the husband would pay child support based on an annual income of $120,000, resulting in child support of $2,536 per month.

Based on this favourable conclusion, the wife sought a court order from Mr. Justice Ferguson granting her a reimbursement of her legal and expert fees in the sum of $182,114. Of this sum, $79,016 was for legal fees and $98,719 was for expert fees.

The judge’s opinion on this divorce procedure

The judge stated that “the astonishing feature of the matter is that the lawyers and experts spent 6 years running up these costs when the only significant issue was the Respondent’s income. The file now fills the better part of 3 file boxes. My overall impression of the whole litigation is that the parties have litigated extravagantly and the lawyers and experts for the Applicant have failed to exercise any professional judgment as to what the litigation was worth.”

In the end, the judge reduced the reimbursement sought from $79,000 down to $50,000 for the legal fees and the expert fees were reduced from $98,719 down to $12,000, based on his view that “that is all that such services in a case like this are worth”.

The judge did not end there. The decision went on to state:

“In my view, counsel and experts have a professional obligation to provide advice to their client not just on the merits of a claim, but also about the potential costs of pursuing it, about what is a reasonable sum to invest in the case, and about what might reasonably be expected to be the outcome on costs. There is no evidence before me as to whether this happened in this case. In the absence of such evidence, I find the costs incurred by the Applicant’s counsel and expert to be so excessive as to imply that they failed in these duties. It is now commonplace for counsel to ask for what I consider to be excessive fees when costs are fixed at all stages of litigation. In my view, the courts have an obligation to reject such claims. To award costs in extravagant amounts will simply encourage counsel and experts to charge excessive fees. This will not only ruin clients, but will also make litigation even more inaccessible to the average litigant. The Applicant earns $57,600. To legitimize the amounts charged to her in this case by her counsel and expert for a case about child support is unthinkable.”

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