Executive Summary: Key Legal and Evidentiary Issues

• Dispute centers on whether the registrar has jurisdiction under s. 70 of the Legal Profession Act (LPA) to review bills issued by a former law firm (MWM) to a client whose lawyer departed to establish a new firm (Derber Law)

• MWM billed $752,165.71 (including $671,576.53 in legal fees and $80,589.18 in taxes), representing approximately 70% of the total legal fees allocated from the client's over $3.7 million judgment

• Standing of Derber Law as a "person charged" under s. 64(1) of the LPA was contested, with MWM arguing only the client could pursue the review

• Absence of any employment contract or fee-splitting agreement between Ms. Derber and MWM complicated the allocation of legal fees earned under successive contingency fee agreements

• MWM relied on Rotto to argue that inter-firm fee disputes fall outside the LPA, while Derber Law cited NST v. Boss Power and King Law v. Kevin McLean Law to support the inclusive definition of "person charged"

• Registrar Gaily ruled that the review should proceed under the LPA, finding Derber Law has standing and awarding it party-and-party costs as the successful party

Background of the client's retainer and the movement between law firms

Chantal Courchesne retained lawyer Whitney Derber in January 2018 to represent her in a motor vehicle action while Ms. Derber was practising at another law firm referred to as "Law Firm A." In March 2021, Ms. Derber left Law Firm A and joined McComb Witten Marcoux (MWM) as an associate for a two-year term. The Client elected to follow Ms. Derber and signed a contingency fee agreement (CFA) with MWM on April 14, 2021, agreeing to pay 33.33% of any settlement or judgment amount as legal fees. Notably, when Ms. Derber joined MWM, the parties did not enter into an employment contract and did not agree to any terms governing how legal fees would be split between MWM and Ms. Derber on files Ms. Derber brought with her to MWM, or files she took with her when she left MWM at the end of two years. MWM's counsel did not dispute this.

The MWM CFA and the transfer agreement

The MWM CFA included a termination provision allowing the Client to end the solicitor-client relationship on written notice. If that occurred, the Client agreed to pay MWM on a quantum meruit (services rendered) basis once the lawsuit was settled or judgment rendered. When Ms. Derber's two-year term at MWM expired on March 7, 2023, she departed and established Whitney Derber Law Corporation (Derber Law). The Client again elected to continue retaining Ms. Derber and executed a new CFA with Derber Law at the same 33.33% fee rate. On June 7, 2023, MWM agreed through a Transfer Agreement, signed by Robert C. Marcoux on behalf of MWM, to release the Client's file to Derber Law subject to several undertakings. These undertakings required Derber Law to pay MWM's incurred disbursements, advise MWM within 14 days of any settlement or judgment, protect MWM's legal fee entitlement, and ensure MWM's account for fees was "agreed to" or sufficient funds retained pending an "assessment" before any funds were disbursed from Derber Law's fee portion of the proceeds. MWM subsequently wound up as a law firm and closed in July 2023.

The judgment and the disputed bill

Ms. Derber represented the Client through trial, and in a judgment released in early November 2023, the Client was awarded over $3.7 million in damages. Although the Client's injury claim was under appeal, the insurer provided partial payment of $2,878,472.96, of which $959,395.04 was allocated as legal fees. Derber Law held these funds in its trust account and, given the undertaking she provided under the Transfer Agreement, Ms. Derber could not pay herself from these funds until MWM's fees were agreed to or assessed without breaching that undertaking. Despite requests, MWM did not render bills to Ms. Derber's clients or to Derber Law as the matters resolved. Derber Law filed a petition in September 2024 seeking an order that MWM render bills for seven identified clients. MWM did not file a response, and on October 29, 2024, Justice Baker ordered MWM to issue the bills and awarded costs to Derber Law. In compliance with the Baker Order, on November 7, 2024, MWM rendered a bill to the Client, care of Derber Law, totalling $752,165.71 — comprising $671,576.53 in legal fees plus $80,589.18 in applicable taxes — which Ms. Derber deposed represented 70% of the total allocated to legal fees.

The jurisdictional challenge and competing arguments

Derber Law filed the appointment on May 12, 2025, to review the MWM Bill under s. 70 of the LPA in the Client's name. The Client herself took no position on the fees claimed by MWM and it was Derber Law that disputed the amount MWM claimed. MWM resisted the review, arguing the dispute was a contractual one between the two law firms outside the scope of the LPA. MWM relied heavily on the precedent in Johns Southward Glazier Walton & Margetts v. Rotto, 2015 BCSC 554, where Fitzpatrick J. found that an associate lawyer who had agreed with her former firm on a fee-sharing mechanism was not a "person charged" under the LPA. Derber Law countered that the definition of "person charged" in s. 64(1) is inclusive, citing NST v. Boss Power Corp., 2016 BCCA 1, King Law v. Kevin McLean Law, 2016 BCSC 1598, and Wright Law v. ICBC, 2012 BCSC 149, which supported the inclusive interpretation of who qualifies as a "person charged." Derber Law further argued that through the Transfer Agreement, it was indemnifying the Client and thus met the definition of "person charged" under s. 64(1) of the LPA.

The registrar's analysis of standing and jurisdiction

Registrar Gaily distinguished Rotto on several grounds. Unlike Ms. Rotto, Ms. Derber did not deny the terms of the MWM CFA or the Transfer Agreement, nor did she assert that the parties did not have a binding agreement regarding the allocation of fees on the Client's file. The situation was further distinguished by the fact that, unlike Jones Southward in Rotto, MWM did not advise Ms. Derber of the fees it was claiming, and she was forced to pursue the Derber Law Petition and obtain the Baker Order. The Registrar also rejected MWM's reliance on Cowichan Bay Contractors for the proposition that registrars cannot interpret contracts, noting that case involved a reference under the Supreme Court Civil Rules — not an LPA proceeding — and that in Grewal v. Jenkins Marzban Logan LLP, 2019 BCSC 1963, a justice upheld a registrar's contractual interpretation during an LPA review without finding any jurisdictional overreach. The Registrar found that without compelling evidence to the contrary, when the parties referred to resolution of their fee dispute through "assessment" or "taxation" in the Transfer Agreement, they contemplated the process would be a review under s. 70 of the LPA.

Ruling and outcome

Registrar Gaily ruled that the review of the MWM Bill should proceed under s. 70 of the LPA. The Registrar was satisfied that Derber Law qualifies as a "person charged" given the inclusive definition in s. 64(1), together with Ms. Derber's express agreement under the Transfer Agreement to pay the fees claimed by MWM on the Client's file, thereby indemnifying the Client. The Registrar further held that Fitzpatrick J.'s comments in Rotto are not authority that the LPA precludes the review of the MWM Bill for the purposes of determining the allocation of fees between the competing law firms. As the successful party on this preliminary application, Derber Law was awarded its costs on a party-and-party basis in any event of the cause, with the Registrar exercising discretion under s. 72(2) on the finding that the application presented special circumstances. No specific monetary amount was determined at this stage, as the decision addressed only the threshold question of jurisdiction; the substantive review of MWM's $752,165.71 bill remains to be conducted.