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Civil Litigation - Disability - Settlement (2). Borok v. Primmum Insurance Company
In Borok v. Primmum Insurance Company (Ont CA, 2026) the Ontario Court of Appeal allowed an appeal, this brought against the dismissal of an application to approve "a proposed settlement for a party under disability pursuant to Rule 7.08 of the Rules of Civil Procedure" - here, where the settlement was wrt a SABS auto insurance claim.
The court considers the authority of a paralegal to act in settlements for parties under disability, here a SABS auto insurance settlement:b. A paralegal can negotiate a resolution of a claimant’s SABS claims
[21] The application judge erred in finding that a lawyer must negotiate the proposed settlement for the party under disability and file an affidavit confirming this. The application judge found he “could not approve the settlement without requiring Mr. Borok to renegotiate his settlement with a lawyer acting for him.” Rule 7 does not require a lawyer to participate in the settlement negotiations for a party under disability; it simply requires that as part of the material filed in support of the approval motion or application, an affidavit of solicitor acting for the litigation guardian be filed. This affidavit must set out the lawyer’s position in respect of the settlement. The application judge’s finding in this regard was incorrect.
[22] There is no prohibition against paralegals who are licensed by the Law Society of Ontario dealing with SABS claims on behalf of clients who are under a disability: Insurance Act, s. 398; Automobile Insurance regulation, s. 18. While paralegals are prohibited from dealing with settlements of SABS claims for parties who have been catastrophically impaired, this case did not involve a claimant who had been designated catastrophically impaired: Law Society of Ontario, By-Law 4, ss. 6(1)-(2); see also Charles (Litigation Guardian of) v. Gore Mutual Insurance Company, 2023 ONSC 7053 at paras. 2, 5.
[23] Regardless of whether a paralegal or a lawyer negotiated the proposed settlement, the approval materials must contain an affidavit from the solicitor who has been retained and who has reviewed all of the circumstances giving rise to the action, including liability issues and damages issues. The solicitor must provide an opinion on whether the proposed settlement is in the best interests of the party under disability and the reasons for the opinion. In this way, the affidavit enables the court to meaningfully assess the reasonableness of the settlement: Spicer v. Wawanesa Mutual Insurance Company, 2023 ONSC 3221, 35 C.C.L.I. (6th) 257, at paras. 11-15. . Borok v. Primmum Insurance Company [IMPORTANT]
In Borok v. Primmum Insurance Company (Ont CA, 2026) the Ontario Court of Appeal allowed an appeal, this brought against the dismissal of an application to approve "a proposed settlement for a party under disability pursuant to Rule 7.08 of the Rules of Civil Procedure" - here, where the settlement was wrt a SABS auto insurance claim.
Here the court reverses the application court's holding "that the Superior Court of Justice did not have jurisdiction to approve the proposed settlement because it involved the resolution of claims under the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (“SABS”), which was the exclusive jurisdiction of the Licence Appeal Tribunal (“LAT”)":a. The Superior Court has jurisdiction on the settlement of claims arising from SABS
[11] Rule 7.08(1) of the Rules provides that no settlement of a claim involving a person under disability is binding without the approval of a judge. The rule requires that a motion or application for approval must contain certain materials: an affidavit from the litigation guardian setting out their position in respect of the settlement; an affidavit from a lawyer setting out the lawyer’s position with respect to the proposed settlement; and the minutes of settlement. After reviewing the materials, the judge must determine, based on the evidence, whether the proposed settlement is in the best interests of the party under disability and ought to be approved.
[12] Here, the application judge misunderstood s. 280 [SS: 'Resolution of disputes'] of the Insurance Act. He found that the LAT had “exclusive jurisdiction” over all things related to SABS, including a proposed settlement. That is not what the section says:Resolution of disputes
280 (1) This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.
Application to Tribunal
(2) The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1).
Limit on court proceedings
(3) No person may bring a proceeding in any court with respect to a dispute described in subsection (1), other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review. [13] Section 280 of the Insurance Act deals with the procedure to be followed when there is a dispute concerning an insured person’s entitlement to a benefit or the quantum of a benefit. When it was enacted in 2016, s. 280 removed the right to sue in the Superior Court for disputed entitlement to SABS and conferred on the LAT exclusive jurisdiction to determine these disputes: Insurance Act, s. 280(3); Stegenga v. Economical Mutual Insurance Company, 2019 ONCA 615, 147 O.R. (3d) 65, at para. 36. Entitlement and quantum of a benefit are determined by the LAT following a specific procedure: Insurance Act, s. 280(2). An appeal from a decision from the LAT may be heard by the Divisional Court: Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sched. G, s. 11.
[14] The application judge erred in law by concluding that s. 280 granted the LAT exclusive jurisdiction over all matters relating to SABS, including the approval of proposed settlements. Section 280 grants exclusive jurisdiction to the LAT over disputes arising from ongoing claims related to SABS, not to settlements: Yang v. Co-operators General Insurance Company, 2022 ONCA 178, 21 C.C.L.I (6th) 1, leave to appeal refused, [2022] S.C.C.A. No. 141; Stegenga, at paras. 21-22.
[15] Section 280 of the Insurance Act does not address proposed settlements of SABS claims for parties under disability. As this court has noted, if the jurisdiction of the Superior Court is to be taken away, the statute must do so in clear and unequivocal language: R.W. Tomlinson Limited v. Labourers' International Union of North America, Local 527, 2025 ONCA 861, 515 D.L.R. (4th) 680, at para. 45, leave to appeal granted, [2026] S.C.C.A. No. 30. It has not done so with respect to approval of settlements under r. 7.08.
[16] Furthermore, s. 9.1 of Automobile Insurance, R.R.O. 1990, Reg. 664 (the “Automobile Insurance regulation”) of the Insurance Act addresses specifically proposed settlements of SABS claims and sets out a highly regulated procedure when a settlement is entered into that requires the exchange of certain documents, the establishment of cooling-off periods, and what occurs if the claimant wishes to rescind a settlement. Section 9.1(6) states specifically that certain aspects of the procedure set out in the Automobile Insurance regulation do not apply to settlements that have been approved by a court pursuant to r. 7 of the Rules. This makes it clear that for the proposed settlement of a SABS claim that involves a party under disability the procedure is to file materials pursuant to r. 7 and seek approval from the Superior Court, in the same way that all proposed settlements involving parties under disability are done.
[17] Obtaining court approval of proposed settlements for parties under disability is mandatory in every civil case, no matter what type of case it is and that has always been the procedure. This court confirmed the necessity of securing court approval of any settlement that involves a party under disability in Wu Estate v. Zurich Insurance Co. (2006), 2006 CanLII 16344 (ON CA), 268 D.L.R. (4th) 670 (Ont. C.A.), leave to appeal refused, [2006] S.C.C.A. No. 289, where it noted at para. 10:The requirement for court approval of settlements made on behalf of parties under 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’.” [Citation omitted.] [18] This court recently reaffirmed the protective purpose of court approval under r. 7.08 in D.V. v. Cordocedo, 2026 ONCA 705, at para. 29.
[19] In the context of addressing the issue of sealing orders in r. 7.08 settlement approval motions, this court has specifically commented on the parens patriae jurisdiction of the court in r. 7.08 matters. As noted in S.E.C. v. M.P., 2023 ONCA 821, 97 R.F.L. (8th) 54, leave to appeal refused, [2024] S.C.C.A. No. 39, at para. 39:The common law rules mean that, as put by Salhany J.: “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”: Ruetz v. Morscher & Morscher (1996), 1996 CanLII 7985 (ON CTGD), 28 O.R. (3d) 545, (S.C.), at p. 549.
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The protective purpose of settlement approval for parties under disability has been repeatedly affirmed in this court’s jurisprudence.” [Citations partially omitted.] [20] The application judge misunderstood the purpose of r. 7 and the parens patriae jurisdiction of the court. This court has confirmed on numerous occasions that r. 7.08 provides that no proposed settlements on behalf of parties under disability are binding without a judge’s approval: see e.g. S.E.C., at para. 2. Furthermore, judges of the Superior Court have been and continue to approve proposed resolutions of the SABS claims of parties under disability pursuant to r. 7: see e.g. Kwok (Litigation guardian of) v. State Farm Mutual Automobile Insurance Co., 2016 ONSC 7339; Bellama v. Trafalgar Insurance, 2023 ONSC 172; Wang v. Safety Insurance Company, 2026 ONSC 3237; and Gidda v. Intact Insurance Company, 2023 ONSC 2799. Following the release of the decision under appeal, Firestone R.S.J. released a decision confirming that all settlements proposed on behalf of any party under disability, including the resolution of SABS claims, are subject to court approval: see Gomez v. The Personal Insurance Co., 2025 ONSC 7049, 52 C.C.L.I. (6th) 247. . Leduc v. Dufour
In Leduc v. Dufour (Ont CA, 2026) the Ontario Court of Appeal dismissed an appeal, this from a contingency fee court approval order "under r.7 [SS: 'Rule 7 Parties Under Disability - Representation by Litigation Guardian'] of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for approval of the settlement and the fee payable":B. Decision below
[7] The motion judge began his analysis by noting that both the 2015 CFA and the 2018 CFA did not strictly comply with the requirements for CFAs [SS: 'contingency fee agreements'] set out in Contingency Fee Agreements, O. Reg. 195/04 (the “Regulation”).[4]
[8] He then turned to analyze whether the 2018 CFA was fair and reasonable, and thus enforceable under s. 24 of the Solicitors Act, R.S.O. 1990, c. S.15. In doing so, the motion judge applied the well-developed framework articulated in Raphael Partners v. Lam (2002), 2002 CanLII 45078 (ON CA), 61 O.R. (3d) 417 (C.A.).
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Fairness
[9] The motion judge concluded the agreement was not entered into fairly. After identifying all of the formal requirements that were not complied with in the 2018 CFA, he acknowledged that technical non-compliance with the Regulation does not necessarily result in adverse consequences for the non-compliant solicitor. He noted that there were cases suggesting that “substantial compliance” was sufficient and he stated that he was “not inclined to be as forgiving as some of [his] colleagues”: at para. 44. He emphasized the consumer protection role of the Regulation. In his view, the requirements of the Regulation “were a means of providing crucial pieces of information designed to ensure that the lawyer-client imbalance was attenuated”, and “the further a CFA strays from compliance with governing legislation and regulations”, the more difficult it will be to find that it was entered into fairly: at para. 49.
[10] The personal circumstances of Ms. Vanier, as Mr. Leduc’s litigation guardian, were at the forefront of the motion judge’s analysis. In considering them, he found that she was a vulnerable client based on a number of circumstances, including that she only had a high school education, her only prior experience with retaining a lawyer was in connection with a single real estate transaction, and her professional experience was largely confined to working as a heavy equipment operator before Mr. Leduc was born. Additionally, Ms. Vanier’s life changed drastically after Mr. Leduc’s injury. She quit her job to look after Mr. Leduc. At the time the CFAs were entered into, Ms. Vanier’s life was largely devoted to figuring out how to care for her son on her and her now-deceased husband’s modest incomes. The motion judge found that Ms. Vanier was, by all accounts, in dire straits when she engaged Mrs. Wallbridge. Given Ms. Vanier’s vulnerability, the motion judge found that both CFAs should have more closely complied with the Solicitors Act and Regulation.
[11] The motion judge also found that aspects of both CFAs were drafted in a way that could lead to disproportionately large fees for the firm, in some cases in excess of what the respondents would have recovered in damages. Neither CFA referenced that there were limits on counsel’s fees or that the agreement would need to be reviewed and approved by a judge.
Reasonableness
[12] The motion judge also concluded that the fee was not reasonable at the time of the hearing. Under that branch of the Raphael Partners test, the motion judge examined the time Mrs. Wallbridge expended on the claim, its legal complexity, the result achieved, and the risk Mrs. Wallbridge assumed.
[13] He reasoned that, although Mrs. Wallbridge exercised skill and experience in prosecuting an inherently difficult claim, the result achieved fell short of the plaintiffs’ and defendants’ damages assessments and Mr. Leduc’s needs. Moreover, the motion judge assessed the risk to the appellant at several points in time, concluding that the odds of success were strong when the 2018 CFA was entered into, and even stronger at the time of the judicial pre-trials in 2021. These factors, assessed together, militated towards finding that the 2018 CFA was not reasonable as of the date of the hearing.
[14] The motion judge also noted that when approving a settlement where legal fees were agreed to by a litigation guardian, the court must consider whether the party under disability needs to be protected from “any mistakes which may have been made by the litigation guardian”: Cogan (Re) (2007), 2007 CanLII 50281 (ON SC), 88 O.R. (3d) 38 (S.C.), at para. 20. Notwithstanding the fact that Ms. Vanier was initially eager to accept the settlement, the motion judge determined that she was mistaken in agreeing to the terms of the 2018 CFA. This was because the 2018 CFA’s fixed percentage, regardless of the amount of the settlement, resulted in an unreasonable fee.
Remedy
[15] The motion judge substituted what he concluded was a reasonable fee of $3.25 million, plus fees and disbursements. He did so according to a “staggered percentage” model, according to which the appellant was entitled to 33 percent of the first $5 million recovered as damages, 25 percent of the next $5 million, and 15 percent of the remaining amount recovered as damages.
D. Standard of review
[16] The fairness and reasonableness of a fee agreement between a solicitor and client is a question of mixed fact and law, reviewable for palpable and overriding error, absent an error in principle: Chrusz v. Cheadle LLP, 2010 ONCA 553, 272 O.A.C. 1, at para. 30; Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 37.
E. Analysis
[17] It is not in dispute that a contingency fee agreement, in order to be approved by the court, must be both “fair” at the time it was entered into and “reasonable” at the date of the hearing to approve it: Raphael Partners, at paras. 37-58. A contingency fee agreement can be declared void, cancelled or disregarded if it is found to be either unfair or unreasonable: Henricks-Hunter v. 814888 Ontario Inc. (Phoenix Concert Theatre), 2012 ONCA 496, 294 O.A.C. 333, at para. 13. Therefore, in order to succeed on the appeal, the appellant must establish that the motion judge erred in both his conclusion that the 2018 CFA was not fair, and his conclusion that it was not reasonable.
The motion judge did not err in concluding the 2018 CFA was not fair
[18] In Raphael Partners, at para. 37, this court described the question to be considered as follows:The fairness requirement of s. 24 of the Act is concerned with the circumstances surrounding the making of the agreement and whether the client fully understands and appreciates the nature of the agreement that he or she executed. [19] The onus is on the solicitor to show that the way in which a fee agreement was obtained was fair: Raphael Partners, at para. 37.
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[24] The motion judge recognized that the regulations governing CFAs serve as a form of consumer protection legislation, and that the requirements of the regulation governing CFAs were a “means of providing crucial pieces of information designed to ensure that the lawyer-client imbalance was attenuated”. It was not unreasonable for him to observe that “[c]ompliance with the governing legislation was particularly important in this case” because of Ms. Vanier’s vulnerability and the need for crucial information “to level the playing field between the lawyer and the client”. And, contrary to the appellant’s submission, the motion judge’s conclusion that Ms. Vanier was a vulnerable client was firmly grounded in the evidence and reveals no reversible error.
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[28] The appellant also takes issue with the motion judge’s reference to the fact that he was “not inclined to be as forgiving as some of [his] colleagues in relation to the 2018 CFA’s compliance with the Regulation.
[29] This passing comment by the motion judge does not point to any reversible error. Non-compliance with the Regulation does not render a CFA void or unenforceable; rather in each case the court must determine whether the CFA is fair and reasonable. In making this determination it is relevant whether any failings in the contents of the CFA are material to the nature of the proceedings: Bogue v. Miracle, 2025 ONCA 188, at paras. 19-20. Given what the motion judge viewed as significant non-compliance with the Regulation and Ms. Vanier’s vulnerability, he was not convinced that the 2018 CFA was entered into fairly. Whether or not other judges in other cases[5] may have been more “forgiving” of instances of non-compliance with the Regulation is irrelevant to the analysis.
[30] For these reasons, we see no basis to interfere with the motion judge’s finding that the appellant had not shown the 2018 CFA was fair. Consistent with the required approach in Raphael Partners, he focused on “the circumstances surrounding the making of the agreement and whether the client fully [understood and appreciated] the nature of the agreement that [she] executed”.
[31] As this conclusion disposes of the appeal, we do not need to consider the motion judge’s additional finding that the 2018 CFA was not reasonable. That said, nothing in these reasons should be taken as an endorsement of the motion judge’s analysis on this prong of the Raphael Partners test. In particular, we do not agree with the motion judge’s approach to the assessment of the risk undertaken by the appellant that focused on the risk of non-payment at the time the case was settled. Rather, “[t]he reasonableness of the fee should of course be assessed by reference to the risk as it appeared at the time the agreement was negotiated, and not as of the time of the assessment, when it may falsely appear with the benefit of hindsight that the risk of failure was minimal all along”: Laushway Law Office v. Simpson, 2011 ONSC 4155, 336 D.L.R. (4th) 632, at para. 131, citing Gavin MacKenzie, Lawyers & Ethics: Professional Responsibility and Discipline (Toronto: Thomson Reuters Canada, 2018) (loose-leaf updated April 2025), at § 12:1, appeal to Ont. C.A. dismissed for delay, 2013 ONCA 317.
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