In the Court of Appeal of Alberta  
Citation: Tallcree First Nation v Rath & Company, 2022 ABCA 174  
Date: 20220511  
Docket: 2003-0179AC;  
2103-0093AC  
Registry: Edmonton  
Between:  
Tallcree First Nation  
Respondent  
(Appellant)  
- and -  
Rath & Company and Jeffrey R.W. Rath  
Appellants  
(Respondents)  
_______________________________________________________  
The Court:  
The Honourable Justice Frans Slatter  
The Honourable Justice Thomas W. Wakeling  
The Honourable Justice Kevin Feehan  
_______________________________________________________  
Memorandum of Judgment of the Honourable Justice Slatter  
And the Honourable Justice Feehan  
Dissenting Memorandum of Judgment of the Honourable Justice Wakeling  
Appeal from the Decision by  
The Honourable Justice D. Lee  
Dated the 8th day of October, 2020  
Filed the 27th day of October 27, 2020  
(2020 ABQB 592, Docket: 1803 05262)  
Appeal from the Decision by  
The Honourable Justice D. Lee  
Dated the 26th day of March, 2021  
(2021 ABQB 234, Docket: 1803 05262)  
Appeal from the Decision by  
The Honourable Justice D. Lee  
Dated the 9th day of June, 2021  
(2021 ABQB 440, Docket: 1803 05262)  
_______________________________________________________  
Memorandum of Judgment  
_______________________________________________________  
The Majority:  
[1] The issue on these appeals is the reasonableness of a contingency fee agreement for legal  
services entered into by the parties, and the related issue of the fee to which the appellant lawyers  
are entitled.  
[2]  
Tallcree First Nation issued an Appointment for Review of the contingency fee agreement  
it had entered into with Rath & Company. The Review Officer concluded that the agreement was  
reasonable, and that the resulting fee was not “unexpectedly unfair”. A chambers judge reversed  
that decision, concluding that the contingency fee agreement was unreasonable: Tallcree First  
Nation v Rath & Co, 2020 ABQB 592. In subsequent proceedings, the chambers judge determined  
that a fair fee for the services provided would be $3 million: Tallcree First Nation v Rath & Co,  
2021 ABQB 234. The chambers judge subsequently dismissed an application that he recuse  
himself and direct a rehearing: Tallcree First Nation v Rath & Co, 2021 ABQB 440. All three of  
those decisions are under appeal.  
Facts  
[3]  
Tallcree First Nation is one of the signatories of Treaty 8. That Treaty includes a covenant  
to provide each band who signed the treaty with a list of agricultural implements and supplies (e.g.,  
axes, hoes, reapers, plows, oxen, seed, ammunition, twine). The signatories took the position that  
the Treaty also included an implied covenant that Canada would assist the bands in adapting to a  
new economic lifestyle so as to render them economically self-sufficient. The underlying claim  
which is the subject of the contingency fee agreement is that these “Agricultural Benefits” were  
not provided in accordance with the terms of the Treaty.  
[4]  
The potential Agricultural Benefits claim, identified as early as 2000-2001, was ultimately  
advanced by approximately 21 First Nations who had signed Treaty 8, including Tallcree First  
Nation. In about 2005 the face value of these claims was said to be between $42,500 and $51,000  
per band member. Various law firms were retained to pursue the claims. In about 2008 Tallcree  
First Nation retained Ackroyd & Company, who also represented about seven other First Nations,  
on a fee-for-service basis. Rath & Company was retained at some point to represent Sturgeon Lake  
Cree Nation.  
[5]  
In 2008 the Specific Claims Tribunal was established under the Specific Claims Tribunal  
Act, SC 2008, c. 22 to expedite the resolution of claims over 15 years old: s. 14. The First Nations  
diverted the Agricultural Benefits claims into that process, which had certain advantages. Canada  
would not refuse to negotiate a claim on the basis that a limitation period had expired (s. 19), and  
Page: 2  
the statute provided a fixed timeline for processing claims. If the claims could not be resolved, the  
First Nations could take them before the Specific Claims Tribunal rather than the ordinary courts.  
[6]  
The Specific Claims procedure involves several steps:  
(a)  
The First Nation must submit a claim that meets a minimum standard of  
particularity (s. 16(2)(a)). The Minister will advise the First Nation if the minimum  
standard has been met, in which case the claim is said to be “filed with the Minister”  
(s. 16(2)(c), (3)).  
(b)  
Once the claim has been “filed”, the Minister has three years to research the claim  
and assess its validity (s. 16(1)(b)). If the Minister is satisfied with the assessment  
of the claim, then it will be “accepted for negotiation”. If this does not happen  
within three years, the First Nation can wait for the Minister’s assessment.  
Alternatively, after three years, or if the claim is rejected, the First Nation can file  
its claim with the Specific Claims Tribunal (s. 16(1)(a), (b)).  
(c)  
(d)  
Once the claim has been “accepted for negotiation”, there is a further three year  
window within which Canada and the First Nation can explore settlement. If a  
settlement is not achieved, the First Nation can file its claim with the Specific  
Claims Tribunal (s. 16(1)(d)).  
The Specific Claims Tribunal has the jurisdiction to issue final binding decisions  
with respect to all claims that are referred to it (s. 32, 36).  
[7]  
Since all of the 21 First Nations who were making Agricultural Benefits claims had signed  
the same Treaty 8, there was obviously a considerable overlap in Canada’s acceptance of the  
validity of the claims. The logical inference from the record is that Canada was processing these  
claims as a group. Mr. Cardinal, Tallcree First Nation’s business manager, recognized that since  
Tallcree First Nation was one of the smaller First Nations involved, its claim would be  
“piggybacked” on the claims of the larger First Nations that were represented by Ackroyd &  
Company.  
[8]  
Ackroyd & Company submitted an Agricultural Benefits claim on behalf of Tallcree First  
Nation on June 25, 2013. The claim was accepted as “filed” by the Minister on August 14, 2013  
and placed under “assessment”. The settlement that was ultimately achieved, and that formed the  
basis of the disputed contingency fee, was based on this claim.  
[9]  
Under the Specific Claims protocol, the Minister had until August 14, 2016 (3 years) to  
assess the claim, and either “accept it for negotiation”, or reject it (supra, para. 6(b)). However,  
before that deadline arrived, Tallcree First Nation became dissatisfied with the lack of  
communication from Ackroyd & Company about the progress of the claim. They approached  
Rath & Company to take over the file. In October 2014 Rath & Company agreed to take the file  
Page: 3  
on a contingency fee basis and sent a draft contingency fee agreement to Mr. Cardinal. That  
agreement, however, was not signed until one year later, October 14, 2015.  
[10] Mr. Rath commenced working on the file. A federal election was held, and on December 8,  
2015 the new Prime Minister stated publicly that a new approach would be taken to settling treaty  
claims and that First Nations’ rights “are not an inconvenience but rather a sacred obligation”.  
Although the three year deadline for the Minister to assess the claim was not yet up, on  
December 9, 2015 Mr. Rath issued a statement of claim in the Federal Court. On December 10,  
2015 Mr. Rath wrote a lengthy letter to the responsible Ministers demanding that the Tallcree First  
Nation’s claim be recognized and paid. Tallcree First Nation made a settlement offer of $83.5  
million.  
[11] Canada’s response to the statement of claim was that it was not possible to litigate while  
negotiating under the Specific Claims procedure: s. 15(3)(a). As a consequence, the Federal Court  
proceedings were placed in abeyance.  
[12] On August 8, 2016 Canada accepted Tallcree First Nation’s claim for Agricultural Benefits  
“for negotiation”. This was six days before the expiry of the three-year research and assessment  
period. The related claim that Canada would assist the bands in adapting to a new economic  
lifestyle so as to render them economically self-sufficient was not accepted for negotiation. On  
February 2, 2017 Canada made a $57.6 million offer of settlement. This offer was apparently based  
on a formula related to the number of band members and was consistent with offers made to the  
other signatories of Treaty 8. It appears that the claims of all the other 20 First Nations who had  
made Agricultural Benefits claims were settled at about the same time on the same formula,  
although the Tallcree First Nation’s claim was one of the last to be resolved.  
[13] Mr. Rath explained the advantages of the offer to the Chief and Council of Tallcree First  
Nation. When the Council found it to be acceptable, Mr. Rath then invested a considerable amount  
of time explaining the settlement offer to the members of the Tallcree First Nation and answering  
their questions. He helped organize the ratification process and prepared the documentation  
necessary. The offer was ultimately accepted and ratified by the members of the Tallcree First  
Nation in July 2017. Mr. Rath then dealt with the distribution of the settlement proceeds to the  
individual members of the Tallcree First Nation under the terms of a trust agreement.  
[14] To summarize, a number of events were said to affect the reasonableness of the  
contingency fee agreement and the resulting fee. In summary, the immediate chronology of the  
events behind these appeals is:  
August 14, 2013  
October 15, 2014  
August 4, 2015  
Agricultural Benefits claim accepted as “filed” by the Minister.  
First draft of contingency fee agreement provided.  
Federal election called.  
Page: 4  
October 14, 2015  
Contingency fee agreement signed, essentially unchanged from the  
first draft, but without compliance with R. 10.7(3) and (4) (affidavit  
of execution and service).  
October 19, 2015  
October 23, 2015  
Federal election held; government changes.  
Tallcree First Nation Council resolution authorizing Rath &  
Company to negotiate.  
December 8, 2015  
New Prime Minister states publicly that a new approach will be  
taken to settling treaty claims and that First Nations’ rights “are not  
an inconvenience but rather a sacred obligation”.  
December 9, 2015  
Statement of claim issued.  
December 10, 2015 Mr. Rath writes to the responsible Ministers demanding that the  
Tallcree First Nation’s claim be recognized and paid. A settlement  
offer of $83.5 million is made.  
January 26, 2016  
Canada says a claimant cannot litigate and negotiate at the same  
time. Statement of claim placed in abeyance.  
June/July 2016  
August 8, 2016  
August 14, 2016  
Mr. Rath meets with Minister’s special adviser and Prime Minister.  
Canada accepts part of the claim for negotiation.  
Three year deadline for assessing claim would have expired if claim  
had not been accepted for negotiation.  
August 31, 2016  
August 31, 2016  
Tallcree Council resolution accepting offer to negotiate.  
Contingency fee agreement re-executed to comply with R. 10.7(3)  
and (4).  
February 2, 2017  
May 15, 2017  
$57.6 million offer of settlement received from Canada.  
Tallcree Council agrees to present the $57.6 million settlement offer  
to the First Nation’s members for ratification.  
July 21, 2017  
Ratification Officer confirms ratification of $57.6 million settlement  
by Tallcree First Nation’s members.  
Page: 5  
The Contingency Fee Agreement  
[15] As noted, Ackroyd & Company had been working on the Agricultural Benefits claim for  
about eight years on a fee-for-service basis. When Tallcree First Nation became dissatisfied, they  
approached Rath & Company, which agreed to take on the file on a contingency fee basis.  
[16] The draft contingency fee agreement was provided on October 15, 2014. Tallcree First  
Nation attempted to retain other counsel to advise them on the agreement but were unable to do  
so. Their relationship with their standing counsel was in transition, and they were unable to identify  
other counsel to assist. Therefore, while Mr. Cardinal acknowledged that they were aware that they  
were entitled to have the agreement reviewed, that did not happen.  
[17] The contingency fee agreement that was ultimately signed one year later, on October 14,  
2015, was essentially the same as the draft previously provided. There was no attempt made by  
Tallcree First Nation to negotiate the terms of the agreement and specifically the compensation to  
be paid. Mr. Cardinal acknowledged that it was open to them to negotiate the fee.  
[18] The contingency fee agreement provides that Rath & Company would be compensated  
based on a percentage of any settlement amount that was recovered.1 The percentage would  
increase, based on the stage at which resolution was achieved:  
20% was payable in the event of resolution before any examinations for discovery or cross  
examinations on affidavits;  
30% was payable after commencement of questioning or filing of any interlocutory  
motions, up to 60 days before the commencement of trial;  
35% was payable after 60 days before the commencement of trial.  
Tallcree First Nation was responsible for disbursements, which would be billed periodically. If the  
agreement was terminated, services would be paid for on a fee-for-service basis based on hourly  
rates set out in the agreement.  
[19] At the time that the contingency fee agreement was signed, Tallcree First Nation  
understood that the face value of the Agricultural Benefits claim was between $50 million and $80  
million. It was accordingly easy to calculate that a 20% fee would be in the range of $10 million  
to $16 million.  
1 Under R. 10.15 the retainer agreement and the other documents filed for the review are to remain confidential. A  
limited reference to them is necessary to provide context for these reasons for decision, but as the appellants point out  
it was inappropriate for the chambers judge to attach a copy of the retainer agreement to his reasons.  
Page: 6  
[20] Rule 10.8 of the Rules of Court provides that the validity and enforceability of a  
contingency fee agreement depends on compliance with the formal provisions in R. 10.7. The  
contingency fee agreement as first signed on October 14, 2015 was not in compliance. Even though  
the contingency fee agreement was re-executed on August 31, 2016, it is not clear if full  
compliance with the Rules was ever achieved. The respondent, however, did not strongly contest  
the validity of the agreement, and in the end, this issue does not affect the outcome of these appeals.  
The Review of the Retainer Agreement  
[21] Under the Rules of Court, retainer agreements and lawyer’s accounts are subject to review  
by a Review Officer:  
10.9 The reasonableness of a retainer agreement and the reasonableness of a  
lawyer’s charges are subject to review by a review officer in accordance with these  
rules, despite any agreement to the contrary.  
The reasonableness of the retainer agreement must be assessed “. . . based on the circumstances  
that existed when the retainer agreement was entered into”: R. 10.19(2). Hindsight may not be  
used.  
[22] Since both a retainer agreement and the account can be reviewed for reasonableness, it is  
possible that a contingency fee agreement might be found to be reasonable but the account  
subsequently rendered unreasonable. In fact, the contingency fee agreement in question provided  
that the final account “may be adjusted up or down to a fair and reasonable amount having regard  
to such factors as the nature, complexity, time and effort required, value, importance and urgency  
of the matters involved and the results achieved on your behalf”. It also confirmed that the  
agreement “and any account rendered under it, or both” could be reviewed by a review officer.  
[23] On March 15, 2018 the respondent issued an “Appointment for Review of Retainer  
Agreement/Lawyer’s Charges” in a modified version of Form 42 of the Rules of Court. That Form  
includes four boxes that can be checked off to show the scope of the requested review. The  
respondent only checked off one box: “the retainer agreement(s) that is required to be served with  
this notice of appointment”. It did not check off the third box: “the lawyer’s account(s) is required  
to be served with this notice of appointment”. Rath & Company accordingly took the view that  
only the reasonableness of the retainer agreement (not the account) was questioned.  
[24] The Review Officer held a full day hearing on September 6, 2018. Both Mr. Cardinal and  
Mr. Rath gave unsworn evidence, in accordance with the practice generally followed. While the  
general circumstances leading up to the retainer were discussed, no details were given about the  
Specific Claims procedure and the status of the claim at the time that the contingency fee  
agreement was signed.  
Page: 7  
[25] The Review Officer considered the factors used to determine if a contingency fee  
agreement is reasonable. He noted, in particular, that the Agricultural Benefits claim had been  
outstanding for a significant period of time, and that how long it would take to conclude was  
unclear:  
. . . Before I get there, though, one observation I have is that Mr. Cardinal did state  
on a couple of occasions this afternoon, maybe this morning, that the big unknown  
for the First Nation was how long this was going to take. He suggested that it was  
contemplated that this could take several years and that because of the length of  
time involved and presumably the added work of keeping things up and moving  
during that time, that that perception seemed, at least, to justify the 20 percent fee.  
But, of course, at the time that the agreement was entered into or presented and so  
on, it is anybody’s guess how long it is going to take. You simply don’t know. It  
could take a year, two years, it could take five years. So when you are assessing  
things like risk and effort and so on in determining an appropriate percentage, no  
one knows exactly how things are going to unfold but you take your best guess.  
One main motivating factor for Tallcree First Nation was to expedite this long-standing claim and  
bring it to resolution. Mr. Rath’s representations that he had the ability and contacts to expedite  
resolution was a key factor.  
[26] The Review Officer referred to the case law and identified the relevant factors. The first  
factor was the financial circumstances of the client, and particularly whether the client would have  
been able to pursue the claim without the use of a contingency fee arrangement. He concluded that  
the Tallcree First Nation “. . . has financial resources but there is some advantage to a client with  
financial resources to go on a contingency basis if we think matters are going to take a long time  
and they don’t have the inclination to budget for them and so on.”  
[27] The second factor was the responsibility for disbursements. Under the contingency fee  
agreement, the Tallcree First Nation was responsible for disbursements. They were to be billed  
periodically, although Rath & Company never actually did so. The Review Officer held that the  
decision to waive disbursements “may be a factor . . . that might play a bit of a role”.  
[28] The third factor was the level of complexity and difficulty involved in the issues of liability  
and quantum. The fourth and related factor was whether liability was disputed. The Review Officer  
concluded that this was a very specialized body of law, in which few lawyers would have the  
necessary experience. The complexity of the claim would be overcome by experience and  
knowledge. Rath & Company had that expertise. With respect to the fifth factor, the defendant in  
this case (Canada) was well represented.  
[29] The sixth factor was the risk assumed by the lawyer in taking on the file. The Review  
Officer concluded:  
Page: 8  
The risk. Mr. Rath went through a whole number of explanations of the risk. He  
mentioned the fact that negotiators for the Crown could change and that could result  
in starting from scratch. Ministers could change. Attitudes of the government could  
change. A whole number of factors could come into play that might delay the result,  
and he suggested that there may be cases, too, where the result would be less than  
expected. I think in these kinds of cases, it just seems to me that, by in large, you  
are going to get a settlement. Probably going to get a settlement around what other  
First Nations are getting for that same thing but the challenge here was to bring this  
particular First Nation up to speed and get them on par with other First Nations so  
that they could participate then in kind of a joint effort and get the result quickly  
(emphasis added).  
The Review Officer therefore concluded that the risk of the client recovering nothing on the claim,  
and therefore of the lawyer receiving nothing under the contingency arrangement, was small.  
Further, the quantum was likely going to be the same as whatever was offered to the other 20 First  
Nations with similar claims.  
[30] Once again, the timing of resolution of the claim was thought to be the key unknown:  
That brings in kind of the other element of time. You can’t predict how long, but  
Mr. Rath did point out that from the outset he was brought in with the idea that he  
would work to get the client up to speed with the other First Nations and get a more  
rapid than expected resolution of it. If that is true and if that was understood by the  
First Nation, then they can hardly complain that the 20 percent was too high because  
the matter unfolded in far less time than we expected. It does seem to me that that  
was the strategy. . . .  
Here Rath & Company did focus on that area of concern, namely the timing of resolution.  
[31] How much time the lawyer ultimately spent on the file was irrelevant hindsight, although  
it was clear that this file (like many) would have cost the client less if it had been done on an hourly  
basis. The Tallcree First Nation, however, clearly understood at the outset how much a 20% fee  
might be. There had been no complaint about the fee until almost all the work was done, but: “It  
is a matter of human nature, and I see it all the time . . . The client is happy with the arrangement  
until the actual bill comes and then it hits them, hey, that’s a lot of money and that’s when it causes  
concern”.  
[32] What level of the graduated contingency fee was engaged was not an issue, because “. . .  
we are dealing with the low percentage, the 20 percent. So that’s for the 20 percent is the  
percentage applied to really the initial steps in getting things done”. The Review Officer observed:  
Twenty percent is on the low end of contingency fee agreements. In personal injury  
actions, a 20 percent fee, if you see one, would be applied to cases where liability  
Page: 9  
is not in issue. It is a clear-cut case. You are going to win, you know, it is just a  
matter of how much work it is going to take to get there and then you go up from  
there.  
As far as success, the resolution was a good one.  
[33] While the resulting fee was high, and might be seen as being unreasonable, the Review  
Officer stated:  
. . . I must give substantial deference to the contingency agreement. Agreement is  
agreement. Twenty percent was specified in the agreement. Twenty percent was  
repeated or the fact that it was a 20 percent contingency fee agreement was  
repeated. The First Nation had an opportunity to get advice during that initial first  
year before they signed it. So giving substantial deference means really just  
respecting the agreement unless it is clearly unreasonable . . . So that is why I often  
say if it is in the agreement, unless it is clearly unreasonable, I have to respect it.  
Twenty percent, although it produces a high fee, I cannot say it is clearly  
unreasonable.  
The Review Officer concluded: “So for all of these reasons, I find that the 20 percent is reasonable  
and the fee generated from the 20 percent is not clearly unreasonable. I will leave it at that”.  
[34] The Review Officer’s Certificate issued under R. 10.19(4) provided:  
Rule 10.19 Decision: The provision in the contingency fee agreement for the  
calculation of fees was found to be reasonable and the resulting fee of  
$11,518,075.00 was not “unexpectedly unfair” or clearly unreasonable on the facts  
of this case. For these reasons and because a Review Officer is bound to give  
substantial deference to a contingency fee agreement, the fee claimed by the Law  
Firm is allowed in full.  
Thus, even though the initial Appointment only requested a review of the retainer agreement, the  
Review Officer also gave an opinion on the reasonableness of the resulting account.  
The Appeal to the Trial Court  
[35] Tallcree First Nation launched an appeal of the Review Officer’s decision to the Court of  
Queen’s Bench under R. 10.26. The chambers judge reversed the decision, concluding that the  
contingency fee agreement was unreasonable: Tallcree First Nation v Rath & Co, 2020 ABQB  
592. While he recognized that deference should be extended to the decisions of review officers, he  
found reviewable errors.  
Page: 10  
[36] The chambers judge considered prior decisions such as M.S. v D.M., 2014 ABQB 702 at  
paras. 33-39, 601 AR 310, emphasizing that contingency fee agreements are often utilized by  
vulnerable people who otherwise would not have access to justice, and summarized:  
23 I conclude that given the sensitive nature of CFA’s with respect to vulnerable  
members of the community and their ability to access justice, amongst other  
reasons, the onus is on Rath to satisfy the Court that the CFA is fair and not  
unreasonable at the time it was entered into.  
The chambers judge acknowledged that the reasonableness of the retainer must be assessed as of  
the time it was entered into, which circumstances he concluded were set out in Mr. Rath’s letter to  
the Ministers of December 10, 2015: 2020 ABQB 592 at para. 25.  
[37] Tallcree First Nation was aware of the magnitude of the fees that might be payable. It had  
the opportunity to have the agreement reviewed by other counsel. The First Nation was in a  
vulnerable position, because Mr. Rath had represented to the Ministers in his December 10, 2015  
letter that it was “in dire economic circumstances” and required settlement money “urgently on an  
emergency basis”.  
[38] The critical factor for Tallcree First Nation, however, was how long it would take to resolve  
the claim. The chambers judge found that Rath & Company was privy to critical information which  
made it clear that a prompt resolution of the claim was possible: 2020 ABQB 592 at paras. 33-35.  
If billed at normal hourly rates, the fee earned by Rath & Company would have been approximately  
3% of the contingency fee: 2020 ABQB 592 at para. 36. A review of the file disclosed that the  
work done was essentially paperwork and correspondence to comply with “government  
administrative processes and documentation of no particular complexity or uniqueness”: 2020  
ABQB 592 at para. 38.  
[39] The chambers judge noted that the Review Officer had relied on the factors listed in Rusk  
(Next Friend of) v Medicine Hat (City), 2001 ABQB 1020, 98 Alta LR (3d) 359, 305 AR 332. He  
found reviewable errors:  
(a)  
(b)  
(c)  
The test in R. 10.9 was the “reasonableness” of the contingency fee  
agreement, not whether it was “clearly unreasonable”: 2020 ABQB 592 at  
para. 48.  
The test was whether the resulting fee was “reasonable”, not whether it was  
“unexpectedly unfair” or “clearly unreasonable”: 2020 ABQB 592 at  
para. 49.  
It was a reviewable error to essentially regard a 20% contingency fee as a  
minimum: 2020 ABQB 592 at paras. 50-51.  
Page: 11  
Having found the contingency fee agreement to be unreasonable, it was necessary to fix an  
appropriate fee for the work that was done. The chambers judge gave procedural directions for a  
further hearing on that issue.  
[40] In those subsequent proceedings, the chambers judge determined that a fair fee for the  
services provided was $3 million: Tallcree First Nation v Rath & Co, 2021 ABQB 234 at para. 84.  
However, while the reasonableness of the contingency fee agreement had been dealt with in the  
first set of reasons, the chambers judge revisited the issue as a result of challenges raised by the  
appellants. There is not always a clear division between the analysis respecting the reasonableness  
of the contingency fee agreement and the reasonable fee to which the appellants were entitled.  
[41] The chambers judge confirmed that the relevant date to assess the reasonableness of the  
agreement was October 14, 2015 when it was signed, not October 2014 when a draft was first  
circulated: 2021 ABQB 234 at para 22.  
[42] The chambers judge also confirmed his view that in October 2015, the Tallcree First Nation  
was in dire financial straits, based on the letter that Mr. Rath had written to the Ministers in  
December 2015: supra, para. 37. While the Tallcree First Nation’s 2018 financial statements  
showed that it had significant resources, he concluded those statements did not necessarily reflect  
its financial position in 2015. Even though Mr. Cardinal had admitted that the Tallcree First Nation  
could have funded the litigation on a fee-for-service basis, “virtually everyone who lived in Alberta  
or is familiar with Alberta's economic state at the time of the CFA is well aware of the dire  
economic circumstances that Rath described above”: 2021 ABQB 234 at paras. 23-26.  
[43] Mr. Rath argued that he could not have known the outcome of the election at the time the  
contingency fee agreement was signed, as implied by the original reasons. The chambers judge,  
however, repeated that “. . . the final result of the federal election would have probably been clear  
to Rath weeks/months before the time the CFA was entered into by Tallcree”: 2021 ABQB 234 at  
para. 32. Mr. Rath had emphasized his political connections prior to the contingency fee agreement  
being signed, and those connections turned out to be critical: 2021 ABQB 234 at paras. 33-35.  
[44] With respect to the risk undertaken, Rath & Company argued that by entering into the  
contingency agreement, it was binding itself “to an arrangement that could take years or even  
decades of complex litigation to resolve”: 2021 ABQB 234 at para. 39. The chambers judge  
concluded, however, that “all of Rath’s efforts were non-legal in nature, which involve little or no  
litigation risk or involvement of Rath”. Finally, “. . . the CFA was a legal document meant to deal  
with legal services performed by lawyers, which is basically not what Rath did in substance,  
because his success in this CFA was largely based on political representations including to the top  
political leader of the Country”: 2021 ABQB 234 at para. 69.  
[45] Further, the contingency fee agreement had an “unfavourable arbitration clause” and  
contemplated an early termination of the agreement: 2021 ABQB 234 at paras. 43-46, 49. The  
chambers judge summarized:  
Page: 12  
47 Furthermore with respect to Rath’s current submission about the great risk that  
he undertook pursuant to the CFA, given what we know actually occurred on the  
file from the Record, and given Rath’s obvious political acumen and lobbying  
abilities, plus his CFA exit strategies and a relatively harsh arbitration clause, it is  
safe to conclude that Rath knew what he was doing, and what outcomes would  
likely transpire during the relevant eight to ten-month period of activity. It appears  
that Rath undertook little personal risk, and had a substantial likelihood of success.  
. . .  
62 The facts in Morrison [v Rod Pantony Professional Corp, 2008 ABCA 145,  
429 AR 259, 89 Alta LR (4th) 233] are also different from the present matter  
because it dealt with an individual who clearly had second thoughts or buyer’s  
remorse with respect to her CFA. This is not the same issue with Tallcree who are  
upset because they believed that the settlement process might take years or decades,  
but in fact the total settlement process was completed in only 18 months. Tallcree  
was unaware of how strong their claims to agricultural benefits were. However Rath  
knew, certainly by the time of the October 2015 CFA and likely several  
weeks/months before that, there was a strong chance that the Federal government  
would change following the mandated October 2015 general election, and that the  
new federal government would respond positively to Tallcree’s agricultural  
benefits claims.  
These findings confirmed his earlier decision that the contingency fee agreement was not  
reasonable.  
[46] The chambers judge also questioned the ability of Rath & Company to successfully pursue  
the claim. He said treaty litigation could be complex and take years to resolve, but there was no  
indication that Mr. Rath had ever undertaken such litigation, as all the reported cases were fee  
disputes that he had with his clients, and: “At the end of the day, Rath & Company was a small  
six-member firm established in 1995 operating in Priddis, Alberta, that received over $11.5 million  
dollars in legal fees for eight to 10 months of activity pursuant to the CFA”: 2021 ABQB 234 at  
para. 48.  
[47] Although the enforceability of the contingency fee agreement had been conceded before  
the Review Officer, and although the issue had not been raised, the chambers judge reflected that  
the law of contracts had evolved since the contingency fee agreement was signed: 2021 ABQB  
234 at paras. 54-60. However, he found it unnecessary to review the law respecting  
unconscionability, the enforcement of arbitration clauses, or the duty of honest contractual  
performance.  
[48] Intertwined with this revisiting of the original reasons for holding that the contingency fee  
agreement was unreasonable was a consideration of the quantum of the appropriate fee. Rath &  
Page: 13  
Company argued that the original $11.5 million fee was reasonable, or alternatively, the proper  
approach was to substitute a different percentage for the 20% contingency fee.  
[49] Under R. 10.19(1), once the contingency fee agreement was found to be unreasonable, the  
appropriate fee was to be determined in accordance with R. 10.2:  
10.2(1) Except to the extent that a retainer agreement otherwise provides, a lawyer  
is entitled to be paid a reasonable amount for the services the lawyer performs for  
a client considering  
(a)  
(b)  
(c)  
the nature, importance and urgency of the matter,  
the client’s circumstances,  
the trust, estate or fund, if any, out of which the lawyer’s charges are  
to be paid,  
(d)  
(e)  
(f)  
the manner in which the services are performed,  
the skill, work and responsibility involved, and  
any other factor that is appropriate to consider in the circumstances.  
Although that test had been applied in Rusk (Next Friend of) v Medicine Hat (City), the chambers  
judge said these factors were not material considerations “because they apply when dealing with  
lawyers acting as legal counsel in a typical adversarial case”: 2021 ABQB 234 at para. 67. This  
file was completely different from the typical personal injury files seen by the review officers.  
[50] Mr. Rath had not kept a record of the time he spent on the file, although when he  
reconstructed his involvement, the resulting fee for the Rath & Company team would be about  
$392,000: 2021 ABQB 234 at para. 53.  
[51] The chambers judge observed that no expert evidence was presented about the quality and  
complexity of the pleadings issued by Rath & Company, although that had never been raised as an  
issue. He accepted that Mr. Rath had specialized knowledge in the area, but concluded that the real  
causative factor in the settlement was the outcome of the election and the attitude of the new  
government as reflected in the statements of the Prime Minister: 2021 ABQB 234 at paras. 28-31.  
[52] The chambers judge described the work done by Rath & Company as “non-typical” and  
“non-legal in nature”, involving lobbying key government decision makers rather than  
conventional litigation: 2021 ABQB 234 at paras. 35-38, 40, 69. Mr. Rath’s direct involvement  
was limited to an eight-month period between December 10, 2015 and August 12, 2016: 2021  
ABQB 234 at paras. 37-38. The chambers judge noticed several times that Mr. Rath’s paralegal  
Page: 14  
was involved in the administration of the file. Further, Mr. Rath’s work had not been instrumental  
in resolving the dispute, which resulted from “fortuitous circumstances and discussions at the  
highest levels of the Defendant Canada”: 2021 ABQB 234 at para. 72.  
[53] Although the parties had not advocated this approach, the chambers judge considered the  
fees that would be charged by a real estate broker: 2021 ABQB 234 at paras. 75-77, 84. He also  
considered the salaries earned by senior lawyers and judges (2021 ABQB 234 at paras. 78-81) as  
well as the overhead of Rath & Company and its tax liability: 2021 ABQB 234 at paras. 82-83.  
[54] As noted, the chambers judge determined that a fair fee for the services provided was $3  
million, inclusive of disbursements: 2021 ABQB 234 at para. 84.  
[55] The appellants were disappointed in the outcome and concerned about the analysis of the  
chambers judge. They brought an application asking that he recuse himself because of a reasonable  
apprehension of bias, and to direct a new hearing on the proper amount of their fees. After hearing  
further argument, the chambers judge dismissed that application: Tallcree First Nation v Rath &  
Co, 2021 ABQB 440.  
Issues  
[56] All three of the chambers judge’s decisions have been appealed, generating the following  
issues:  
a)  
Was the contingency fee agreement reasonable?  
i)  
Did the decision of the Review Officer contain reviewable errors?  
ii)  
Did the decision of the chambers judge reversing the decision of the Review  
Officer contain reviewable errors?  
iii)  
On a proper analysis, was the contingency fee agreement reasonable?  
b)  
c)  
If the contingency fee agreement was unreasonable, what is a proper fee?  
i)  
Did the reasons of the chambers judge setting the fee contain reviewable  
errors?  
ii)  
On a proper analysis, what was the reasonable fee?  
Does the record support a reasonable apprehension of bias?  
Page: 15  
Reasonableness of the Contingency Fee Agreement  
[57] The courts generally do not review contracts for the adequacy or fairness of the  
consideration. Lawyers’ retainer agreements are in a separate category because R. 10.9 provides  
that they can be reviewed for “reasonableness”. The reasons for this were summarized in Morrison  
v Rod Pantony Professional Corp, 2008 ABCA 145, 429 AR 259, 89 Alta LR (4th) 233:  
25 Retainer agreements are obviously in a special category. The client is  
negotiating an agreement with a person (the solicitor) that the client would usually  
look to for advice on such matters. In negotiating the agreement the parties are  
adverse in interest, contrary to the normal state of affairs where the solicitor is  
bound to represent the client's interest. There is also an imbalance of information  
and knowledge, because the solicitor will be more familiar with the terms and  
operations of the retainer agreement than the client. It is undoubtedly for those  
reasons that solicitor-client contracts are reviewed by the court, whereas the court  
will not conduct that sort of analysis of ordinary contracts. The courts will  
obviously not tolerate any sharp practice by the solicitor, or any patent unfairness.  
While retainer agreements might also be set aside on ordinary common law grounds, such as  
unconscionability or misrepresentation, the ability to review for “reasonableness” sets retainer  
agreements apart. Since “unreasonable” is a lower standard than “unconscionable”, it will seldom  
be necessary to review retainer agreements on the latter ground.  
[58] The reasonableness of a retainer agreement should be measured on an objective basis  
having regard to the risks, facts and prospects underlying of the retainer: Morrison at para. 27(a).  
Reasonableness is to be determined based on the circumstances that existed when the retainer  
agreement was entered into: R. 10.19(2). An unexpectedly high fee does not necessarily mean that  
the agreement was unreasonable. Clients should not routinely be able to walk away from  
agreements they have made with their lawyers. In determining “reasonableness”, consideration  
must be given to the interests and expectations of both the client and the lawyer: Morrison at para.  
27. As the Review Officer noted, a client’s unhappiness often first manifests itself after the lawyer  
has done all the work and incurred all the risk.  
[59] Some of the factors commonly considered are the financial circumstances of the client, the  
risks involved, the client’s knowledge of the risks and the implications of the agreement, whether  
liability was admitted, the expected attitude of the defendant, the risk that the lawyer might be paid  
nothing for his or her work, the amount of work likely to be involved, the responsibility for  
disbursements, and the expected time that the retainer might be in effect.  
Page: 16  
The Decision of the Review Officer  
[60] There are three overlapping challenges to the Review Officer’s analysis that the  
contingency fee agreement was reasonable. The first was the suggestion that Tallcree First Nation  
had to show the agreement was “clearly unreasonable” (supra, paras. 33-34):  
“So giving substantial deference means really just respecting the agreement unless  
it is clearly unreasonable . . . So that is why I often say if it is in the agreement,  
unless it is clearly unreasonable, I have to respect it.”  
“So for all of these reasons, I find that the 20 percent is reasonable and the fee  
generated from the 20 percent is not clearly unreasonable. I will leave it at that.”  
“The provision in the contingency fee agreement for the calculation of fees was  
found to be reasonable and the resulting fee of $11,518,075.00 was not  
“unexpectedly unfair” or clearly unreasonable on the facts of this case.”  
The chambers judge concluded that this reflected a reviewable error, because R. 10.9 merely  
requires “reasonableness”: supra, para. 39.  
[61] In the quoted statements from his oral reasons, the Review Officer uses both “reasonable”  
and “not clearly unreasonable” when referring to the contingency fee agreement. In the final  
extract, which is from his Certificate, he only states that the agreement was “found to be  
reasonable”. The balance of that quote refers to the account that resulted, not the agreement itself.  
As noted, the reasonableness of the subsequent account was not squarely before the Review  
Officer, and this latter comment did not reflect a reviewable error about the reasonableness of the  
agreement itself: compare the chambers judge’s reasons, 2020 ABQB 592 at para. 49.  
[62] The Review Officer’s use of the adjective “clearly” was unhelpful but was not likely a  
sufficient reason to undermine his decision. The use of this adjective was perhaps intended to be  
an observation about the burden of proof. Alternatively, it may reflect the fact that  
“reasonableness” is not a fixed standard. There might be a range of retainer agreements and fees  
that could be described as “reasonable”. Some would be at the high end of the range and some at  
the low end, but they would all be “reasonable”.  
[63] Of greater concern is the Review Officer’s connected observation that “deference must be  
given to the agreement”, because “an agreement is an agreement”. Any review of a valid and  
binding retainer agreement proceeds on the assumption that there was an agreement. The fact that  
the client and lawyer agreed to the retainer is a given. The reasonableness of the retainer must be  
measured on an objective standard, recognizing that the agreement must be fair to both the lawyer  
and the client. However, it overstates the point to say that one must give the agreement any  
“deference”. That would particularly be so in the case of a vulnerable client who did not appreciate  
the risks and consequences of the agreement.  
Page: 17  
[64] The deciding point, however, is the Review Officer’s comparison of this contingency fee  
agreement to the ones seen in personal injury actions, and particularly his comment that “20% was  
the lowest ever seen”. Simply put, there was no relevant comparison to be made between the  
present claim and a personal injury action. No personal injury action has an expected quantum of  
between $50 million and $80 million. Given all of the other factors at play, particularly the risks  
known at the time, it was unreasonable to simply assume that 20% was reasonable because it was  
the observed floor for other unrelated agreements.  
[65] While many aspects of the Review Officer’s analysis are sound, there was a sufficient basis  
to review his decision that the contingency fee agreement was reasonable, although not entirely  
for the reasons identified by the chambers judge.  
The Analysis of the Chambers Judge  
[66] Having found reviewable errors in the decision of the Review Officer, the chambers judge  
conducted a fresh analysis to determine the reasonableness of the contingency fee agreement. The  
appellants argue that his subsequent conclusion that the contingency fee agreement was  
unreasonable is tainted by reviewable errors of fact and law.  
[67] An obvious problem with the analysis is a failure to follow the “no hindsight” rule.  
Rule 10.19(2) states that the reasonableness of the agreement must be determined “based on  
circumstances that existed when the retainer agreement was entered into”, being October 14, 2015.  
Those circumstances would include the knowledge and understanding that both parties would  
reasonably have held at that time about the claim, as well as their reasonable expectations and  
assumptions about future events. As the appellants point out, neither the client nor the lawyer can  
be expected to be clairvoyant.  
[68] The appellants argue that the reasonableness of the agreement should be decided as of  
October 2014 when the first draft of the contingency fee agreement was provided. The relevant  
date, however, is October 14, 2015 when the agreement was signed.2 A contingency fee agreement  
might be quite reasonable when it is first proposed, but as a result of a change of circumstances  
become unreasonable before it is signed. The fact that the draft contingency fee agreement had  
been circulated many months before it was signed is relevant, but that did not adjust the date on  
which its reasonableness should be ascertained. Tallcree First Nation clearly had an opportunity  
to have the agreement reviewed before it was signed but did not do so.  
[69] There are several parts of the chambers judge’s analysis that assume Mr. Rath knew things  
in October 2015 that he could not have known. One clear instance is in the reasons 2020 ABQB  
592 at para. 24:  
2 The respondent did not advocate for the date the contingency fee agreement was re-executed, August 31, 2016.  
Page: 18  
24 The best evidence of the circumstances that existed when the CFA was entered  
into on October 14, 2015 can be found in Rath’s own letter, written by him less  
than two months afterwards. Rath’s letter dated December 10, 2015 to the federal  
Minister of Indigenous and Northern Affairs, and to the federal Minister of Justice,  
has been reproduced in its entirety as part of the Schedule A documents to this  
decision.  
A key component of the letter of December 10, 2015 was the statement the Prime Minister made  
on December 8, 2015 that a new approach had to be taken to treaty claims: see supra, para. 10.  
Mr. Rath could not possibly have known in October what the Prime Minister was going to say in  
December. This error was carried forward into other parts of the analysis:  
33 In hindsight, this was predictable as a result of statements made by Prime  
Minister Justin Trudeau, who appeared to promise to resolve these types of claims  
as soon as possible, as referenced in Rath’s December 2015 letter quoted from  
earlier. Tallcree notes that all Rath ever told them was that they had close  
connections to the Trudeau government. . . .  
34 . . . Rath would have been aware of this fortuitous change in the attitude of the  
Federal government at the time the October 14, 2015 retainer agreement was  
entered into, as a fixed date election was legislated by S.C. 2000 c.9 to occur on  
October 19, 2015.  
This unreasonable inference was repeated in the subsequent reasons reported as 2021 ABQB 234  
at para. 70.  
[70] The contingency agreement was signed in the midst of a federal election. In several parts  
of the analysis the chambers judge draws the related unreasonable inference that Mr. Rath would  
have been able to predict the outcome of the federal election: reasons at para. 32. Perhaps some  
could have or thought they could have predicted the outcome of that election. However, the  
outcome of an election is never certain until the day after the vote. Further, even if savvy political  
observers could speculate about the probable outcome of that election, that does not mean one  
could predict that the new government would make a dramatic change in its approach towards  
treaty negotiations.  
[71] A further example of hindsight analysis is a reliance on the relatively minor amount of time  
subsequently spent on the file: 2020 ABQB 592 at paras. 36, 50. In many situations it is anticipated  
by the lawyer and the client that the fee generated by the contingency fee agreement will exceed a  
fee based on hourly rates. That is to account for the risk assumed by the lawyer and the delay in  
payment until resolution of the file. Arguing that the contingency fee agreement was unreasonable  
at the time it was entered into based on the actual hours subsequently required is a classic form of  
hindsight analysis. Contrary to what was suggested in Athwal (Litigation representative of) v  
Page: 19  
Mather, 2019 ABQB 801 at para. 18, 42 CPC (8th) 308 this is not a relevant factor in determining  
the reasonableness of a contingency fee agreement.  
[72] Of course, a lawyer working on a contingency basis is still well advised to keep time  
records. If it turns out that the contingency fee agreement is unenforceable for any reason, time  
records will be needed to establish a fair fee. Further, many contingency fee agreements (such as  
the one involved here) provide that fees will be charged on an hourly basis in the event of  
termination of the retainer.  
[73] When the client initiates the review, R. 10.14(1)(b) requires the lawyer to file timesheets.  
That is a universal requirement, even when only the reasonableness of the contingency fee  
agreement is to be reviewed. The requirement, however, is just to ensure a complete record in  
every eventuality. Filing time records does not involve any sort of admission by the lawyer that  
those time records are relevant, nor does the filing of time records override the “no hindsight”  
provisions of R. 10.19(2). In short, the amount of time subsequently spent on the file was an  
irrelevant consideration.  
[74] There are other examples of hindsight analysis. Overall the analysis is compromised by the  
hindsight knowledge that its Agricultural Benefits claim was settled faster than Tallcree First  
Nation’s expectations.  
[75] The analysis is also undermined by palpable and overriding errors of fact. The chambers  
judge concluded that the Tallcree First Nation was vulnerable and impoverished and entered into  
the contingency fee agreement under economic pressure, based on the statement made in the letter  
of December 10, 2015 to Canada that Tallcree First Nation was “in dire economic circumstances”,  
and required settlement money “urgently on an emergency basis”: supra, para. 37. This statement  
was made in a without prejudice demand letter that included a proposal for settlement. It is best  
seen as a hyperbolic embellishment of the client’s claims, made in an adversarial context.  
[76] At its highest, this statement would be Mr. Rath’s personal opinion, and it is in no sense  
evidence of the actual financial circumstances of the Tallcree First Nation or any admission by the  
appellants. The appellants subsequently produced evidence demonstrating that in 2017 the Tallcree  
First Nation had an accumulated surplus of over $41 million, it wholly owned seven businesses,  
and held investments in four partnerships. It had an annual income of more than $16 million per  
year. Mr. Cardinal admitted that it could have funded the litigation on a fee-for-service basis.  
[77] The chambers judge inferred that the financial circumstances of the Tallcree First Nation  
may not have been the same in 2015 as they were in 2017. At its highest, that means that there was  
no direct evidence on the record about those financial circumstances. The evidence about the  
financial position of the Tallcree First Nation was under its control, and if it was alleging dire  
economic straits, it could easily have introduced that evidence. In summary, it was unreasonable  
for the chambers judge to prefer the bare exhortative opinion in the December 10, 2015 letter over  
the actual evidence on the record. The conclusion that the Tallcree First Nation was under  
Page: 20  
economic pressure to enter into the contingency fee agreement as a result of impecuniosity reflects  
a palpable and overriding error.  
[78] The chambers judge also purported to take judicial notice of Alberta’s economic state at  
the time that the contingency fee agreement was signed: 2021 ABQB 234 at para. 25. To the extent  
that general economic trends can be noticed, in the face of the record it was an error for the  
chambers judge to extrapolate general conditions into the specific conditions of the Tallcree First  
Nation.  
[79] The chambers judge questioned the nature of the services to be provided by Mr. Rath. In  
his initial reasons, he described it as “simple emails” and compliance with “federal government  
administrative processes and documentation of no particular complexity or uniqueness”: 2020  
ABQB 592 at paras. 38, 50. In his second set of reasons, he stated:  
. . . Jeffrey Rath is conducting these negotiations with the opposing party in a non-  
typical manner. Rath is personally meeting with the defendant federal government  
representatives . . . 2021 ABQB 234 at para. 35.  
Secondly, the CFA was a legal document meant to deal with legal services  
performed by lawyers, which is basically not what Rath did in substance, because  
his success in this CFA was largely based on political representations including to  
the top political leader of the Country, who happened to be the main decisionmaker  
of the Defendant Government of Canada in this case. 2021 ABQB 234 at para. 69.  
I find that these [Rusk] factors are not material considerations in this matter because  
they apply when dealing with lawyers acting as legal counsel in a typical adversarial  
case, which is not the case here. 2021 ABQB 234 at para. 67.  
It is unclear whether the nature of the services was thought to be relevant to the reasonableness of  
the contingency fee agreement or the fair quantum of the ultimate fee. On this record, it was  
relevant to neither.  
[80] The chambers judge took an unusually narrow view of what lawyers do. Lawyers do not  
just go to court and draft contracts. In many cases, they lobby and advocate for clients, attempt to  
resolve disputes before they emerge, and seek to resolve existing disputes in a non-adversarial  
way. The client is often better served by a lawyer who can settle a dispute, than one who has to  
take the dispute to court. It is clear from this record that one of the reasons why Mr. Rath was  
retained was because of his representations that he could achieve a settlement of the Agricultural  
Benefits claim without litigation. It was an error of principle for the chambers judge to consider  
that the nature of the services was relevant to the issues before him.  
[81] In his first set of reasons, dealing with the reasonableness of the contingency fee agreement,  
the chambers judge referred to the fact that the appellants were “a small six-lawyer law firm  
Page: 21  
practicing in Priddis, Alberta”: 2020 ABQB 592 at paras. 36, 50. This observation was repeated in  
2021 ABQB 234 at paras. 4, 48, 81. Priddis is a small community close to a number of First Nation  
reserves and the City of Calgary. This factor was clearly overemphasized, even if it may have been  
marginally relevant. There is no rule or presumption that small boutique law firms cannot handle  
complex cases within their expertise. The appellants were retained specifically because they were  
a firm specializing in First Nation’s law. The location of the appellants’ offices is likewise  
irrelevant. There is no rule that smaller firms from rural locations are not entitled to the same  
compensation for work that might be done by urban firms.  
[82] The chambers judge also questioned the ability of the appellants to handle the Agricultural  
Benefits claim:  
While I appreciate that Treaty claims litigation can be very complex, and take years,  
if not decades to complete, there is no indication from the Record or in his  
submissions that Rath had ever undertaken such complex proceedings in the 20  
years the firm had existed from 1995 to the time of the CFA. Rath’s reported cases  
seem to only involve fee disputes with other First Nations, and one can reasonably  
question if Rath could have ever undertaken complex Treaty litigation. At the end  
of the day, Rath & Company was a small six-member firm established in 1995  
operating in Priddis, Alberta, that received over $11.5 million dollars in legal fees  
for eight to 10 months of activity pursuant to the CFA: 2021 ABQB 234 at para.  
48.  
This finding was completely inconsistent with the record. Mr. Rath’s curriculum vitae discloses  
that he has specialized in First Nations law for many years. His qualifications were not challenged.  
That is why he was retained.  
[83] Mr. Rath had summarized his qualifications for the Review Officer:  
I am regarded as being one of the leading treaty and aboriginal rights lawyers in  
Canada. I have argued cases at almost every single level of Court in Canada with  
regard to treaty and aboriginal rights, including the Supreme Court of Canada, all  
of the major appellate courts, Alberta, Saskatchewan, Manitoba, British Columbia,  
the North West Territories, as well as all of the superior courts of those jurisdictions  
including -- well, including and including in the Federal Court trial division and the  
Federal Court of Appeal.  
The chambers judge dismissed this statement as merely being Mr. Rath’s “own testimony” and  
“own assertions”: 2021 ABQB 440 at para. 15. Mr. Rath had offered to give his evidence under  
oath, but the Review Officer indicated that he generally followed a more informal approach. In  
any event, as noted, the appellants’ qualifications were never challenged by the respondent.  
Page: 22  
[84] It was also inaccurate to suggest that Mr. Rath’s qualifications depended on his “own  
testimony”, to the extent that would even be unexpected. It was unreasonable for the chambers  
judge to think expert evidence would be provided on these topics: 2021 ABQB 440 at paras. 19-  
21. Mr. Rath provided further documentation which showed that his litigation expertise went far  
beyond fee disputes with clients. The chambers judge disregarded this evidence because he could  
not access the Westlaw Next database: 2021 ABQB 440 at para. 17. If asked, the appellants would  
undoubtedly have provided neutral citations.  
[85] It is unclear if the chambers judge thought that Mr. Rath’s expertise was relevant to the  
reasonableness of the contingency fee agreement or the reasonableness of the ultimate fee.  
Whichever it was, his conclusion was based on a palpable and overriding misapprehension of the  
evidence, which undermined the entire analysis.  
[86] The chambers judge also questioned the fairness of the contingency fee agreement because  
it contained a provision dealing with what would happen if the relationship between Rath &  
Company and the Tallcree First Nation terminated: 2021 ABQB 234 at paras. 44-47. Firstly, this  
issue was not raised by either party. Secondly, any properly drafted contingency fee agreement  
would deal with this possibility, and its presence was irrelevant to the reasonableness of the  
agreement. Thirdly, this clause was never invoked because the relationship was never terminated  
before resolution of the claim. The consideration of this irrelevant factor was an error of principle.  
[87] The chambers judge was also critical of an arbitration clause in the contingency fee  
agreement: 2021 ABQB 234 at paras. 43-47, 49, 56. The agreement provided that it and the  
resulting account could be reviewed by a review officer as stipulated by the Rules of Court. It also  
contained an arbitration agreement, which the parties agreed was an optional, elective dispute  
resolution process. Neither party purported to trigger the arbitration clause, or argued that it was  
relevant to this dispute, or unfair in the abstract. It was a reviewable error for the chambers judge  
to have placed any weight on it.  
[88] Contracts can be set aside if they are unconscionable, but that concept need never be  
applied to lawyersretainer agreements. The Rules of Court provide that retainer agreements are  
reviewed for “unreasonableness”, which is a lower standard than “unconscionability”. Not  
surprisingly, neither party argued “unconscionability”, nor was there any argument about the “duty  
of honest performance”. The chambers judge erred in speculating about whether the contingency  
fee agreement was unreasonable because there had been a change in the laws governing contracts  
and arbitrations: 2021 ABQB 234 at paras. 54-58.  
[89] In summary, the chambers judge’s conclusion that the contingency fee agreement was  
unreasonable was tainted by reviewable errors.  
Page: 23  
The Fresh Analysis of Reasonableness  
[90] Since both the Review Officer’s and the chambers judge’s analyses of the reasonableness  
of the contingency fee agreement were tainted by reviewable error, it is necessary for this Court to  
conduct a fresh analysis. The factors that are generally considered were discussed supra, paras.  
26-29, 59.  
[91] Reasonableness must be assessed based on the circumstances at the time that the  
contingency fee agreement is entered into, including the knowledge and understanding that both  
parties would reasonably have held about the claim, as well as their reasonable expectations and  
assumptions about future events. The key factors are:  
(a)  
Tallcree First Nation’s Agricultural Benefits claim had been outstanding for some  
time without resolution, and there had been little apparent recent progress. Tallcree  
First Nation was motivated to accelerate the process.  
(b)  
(c)  
The claim was one of about 20 similar claims. It was unlikely that Canada would  
exclude any First Nation from any settlement of the global claim.  
Tallcree First Nation was one of the smaller claimants, and the strategy was that it  
would “piggyback” on the other claims. Thus, the fact that Tallcree First Nation’s  
claim lagged somewhat behind those of the other claimants was not unexpected.  
(d)  
(e)  
The claimants had triggered the Specific Claims procedure. It was unlikely that  
these claims would proceed through conventional litigation. Some of the claims  
had been “accepted for negotiation”, meaning that they were on a track towards  
settlement or hearing before the Specific Claims Tribunal.  
The Specific Claims procedure has a lockstep timeline. It could take six years: three  
years from filing to acceptance for negotiation, and a further three years to negotiate  
settlement. However, while it was far from speedy, the procedure placed statutory  
obligations and time limits on Canada to react to claims, and it gave various rights  
to claimants to access the Specific Claims Tribunal.  
(f)  
Canada had accepted some of the individual claims for negotiation after a review  
of their merits, which was a strong signal that liability was not seriously contested.  
(g)  
It was probable that any settlement would be based on a quantification of the claim  
based on a per capita formula. The possible need for any individual First Nation to  
establish quantum was remote.  
[92] There are three key dates: (i) August 14, 2013, the date the Tallcree First Nation’s claim  
was accepted as “filed” by the Minister, (ii) October 14, 2015, the date the contingency fee  
Page: 24  
agreement was signed, and (iii) August 14, 2016, the end of the three-year research and assessment  
period under s. 16(1)(b) of the Specific Claims Tribunal Act. The contingency fee agreement was  
accordingly signed 26 months into the 36-month research and assessment period.  
[93] At the time the contingency fee agreement was signed, it would therefore have been  
apparent that within 10 months Canada had to do something. Either it had to accept the claim for  
negotiation, or it had to defend the claim before the Specific Claims Tribunal. Since Canada had  
accepted a number of the other claims for negotiation, it would have been perceived to be highly  
unlikely that the Tallcree First Nation’s claim would be rejected. If it was, the claim could be taken  
to the Specific Claims Tribunal. Either way, the period of inactivity would end.  
[94] Further, it was known that similar claims had been “accepted for negotiation” meaning that  
the clock was ticking on the three-year period for Canada to settle the claims. Since Canada’s  
research and review had disclosed merit in the claims, an offer of settlement was likely. If offers  
were not made within the three-year window, those claims could be taken before the Specific  
Claims Tribunal. Tallcree First Nation would piggyback along either way. As the Review Officer  
correctly inferred (supra, para. 29):  
. . . by in large, you are going to get a settlement. Probably going to get a settlement  
around what other First Nations are getting for that same thing but the challenge  
here was to bring this particular First Nation up to speed and get them on par with  
other First Nations so that they could participate then in kind of a joint effort and  
get the result quickly.  
At the time that the contingency fee agreement was signed, prudent independent counsel would  
have advised Tallcree First Nation to stay with their existing counsel and not make any decisions  
about their representation until the three-year assessment window closed on August 14, 2016.  
[95] Furthermore, given that the 20 other claims were being processed together, it would have  
been perceived to be highly unlikely that Tallcree’s First Nation’s claim, which had deliberately  
been piggybacked on the others, could somehow be leapfrogged to the front of the line for earlier  
resolution. The fact that 26 months had passed since the claim was accepted as “filed” was not  
unusual. As Mr. Rath put it, “. . . their researchers glom onto it and they can take - they can take  
years to decide whether or not they are going to validate it”.  
[96] These circumstances were known to the appellants but were not obvious to the respondent.  
As the Review Officer found (supra, paras. 25, 30), timing was thought by the Tallcree First Nation  
to be the “big unknown”. Mr. Cardinal stated:  
. . . What we didn’t understand is the timeframe. You understand, our claim started  
with Miller Thomson back in 2000, 2001, somewhere in that vicinity. We  
understood in entering into this contingency fee agreement that this could  
potentially take years. This could potentially take an undisclosed amount of time in  
Page: 25  
which case Rath & Company would have, in our view, been quite entitled to take  
20 to 35 percent if they had to go to Court . . .  
Mr. Cardinal also indicated that they had no idea other First Nations with similar claims were ready  
to settle. If Mr. Cardinal had been briefed about the mandatory statutory timetable for resolving  
Specific Claims, and the status of claims that had been made by other First Nations, he would have  
been disabused of the impression that settlement would likely “take years”.  
[97] These critical facts are directly relevant to the amount of risk assumed by the appellants.  
Given that a number of these claims had been accepted for negotiation, the reasonable observer  
would have thought at the time that liability was not seriously contested. Given the fact that Canada  
had three years to settle from the date it accepted the other claims for negotiation, the reasonable  
observer would have perceived it being likely that offers would be forthcoming in the near future.  
The risk that offers would have been made to other claimants but not Tallcree First Nation would  
have been perceived to be remote.  
[98] As a consequence, the reasonable observer would have perceived as remote the risk of the  
appellants earning “nothing” under the contingency fee agreement. Furthermore, the prospect of  
the appellants having to advance complex litigation for years was unlikely. These claims were  
going to be processed through the Specific Claims process. Much of the research, analysis, and  
evidence respecting entitlement to Agricultural Benefits under Treaty 8 would have been common  
to all of the other claims, requiring little incremental work for the appellants.  
[99] It follows that the reasonable expectation at the time would have been that an offer of  
settlement would be forthcoming in the near future. The 20% contingency would likely be  
triggered with minimal additional effort or risk. Given the range of settlement being discussed, the  
resulting fee would clearly be unreasonable, having regard to all of the relevant factors behind  
assessing the reasonableness of the contingency fee agreement.  
[100] If, contrary to expectations, no settlement had been forthcoming, it would appear that the  
higher contingency fee percentages in the agreement would have been triggered. The 20%  
contingency only applied up to the commencement of questioning. The 20% contingency therefore  
would only realistically apply in the exact circumstances that came to pass: a resolution by  
settlement in short order. The 20% contingency did not represent the risk that the file “could take  
years or even decades of complex litigation to resolve”: supra, para. 44. Since early settlement  
was the assumption underlying the 20% fee, this aspect of the contingency fee agreement was  
clearly unreasonable. As the chambers judge pointed out, the fact that 20% might be some sort of  
floor in personal injury cases was irrelevant.  
[101] Some of the other perceived risks identified by the appellants were not significant. It is true  
that negotiators can change, and governments can change, but once a claim is accepted for “filing”  
or “negotiation” under the Specific Claims procedure, the government loses a significant amount  
of control. If there is no resolution, the claimants have a direct route to the Specific Claims  
Page: 26  
Tribunal. Since Canada’s own research had indicated some validity in the claims, its choices were  
limited. Further, the Specific Claims Tribunal is able to make binding decisions, precluding any  
need to get independent approval of funding from Parliament.  
[102] As the appellants correctly note, it would always be possible that the members of the  
Tallcree First Nation might not ratify the settlement. But it was conceded that the Tallcree First  
Nation was motivated to settle, and since the plan was to distribute the settlement funds to the  
individual members, there would be a great incentive for them to approve any settlement. Further,  
since Canada would have a limited ability to settle on more favourable terms with one First Nation  
the prospects of any First Nation making a successful counteroffer were remote.  
[103] In summary, the most likely scenario facing the parties at the time the contingency fee  
agreement was signed was that a settlement was achievable in the near future. That is the  
contingency that would trigger the 20% fee. That fee could accordingly be generated with little  
incremental work by the appellants. Given the anticipated quantum of the claim, the resulting fee  
would be unreasonable. Considered on an objective basis on the date it was signed, the contingency  
fee agreement was therefore unreasonable.  
The Reasonableness of the Fee  
[104] Since the only issue before the Review Officer was the reasonableness of the contingency  
fee agreement, he did not have to address the reasonableness of the $11.5 million account that was  
ultimately rendered. His comment in his Certificate that the fee was not “unexpectedly unfair or  
clearly unreasonable” was merely a passing observation.  
The Chambers Judge’s Assessment of the Fee  
[105] Having found that the contingency fee agreement was unreasonable, the chambers judge  
held a further hearing to determine a reasonable fee. He determined that a fair fee for the services  
provided would be $3 million: Tallcree First Nation v Rath & Co, 2021 ABQB 234.  
[106] The appellants argue that the initial Appointment only asked for a review of the  
contingency fee agreement, not their account. However, in the event that the contingency fee  
agreement was found to be unreasonable, it was inevitable that the reasonable fee would have to  
be determined. This was essentially a fresh issue, not strictly speaking a review of the account that  
had been rendered as provided for in the contingency fee agreement based on 20% of the settlement  
amount.  
[107] The appellants therefore correctly argue that it was an error for the chambers judge to  
restrict the type of evidence that could be produced by them at this second phase of the hearing.  
The chambers judge incorrectly held that for the quantum phase of the proceedings, Rath &  
Company had to meet the new evidence test in Palmer v The Queen, [1980] 1 SCR 759. Since  
Rath & Company had reasonably taken the position that the hearing before the Review Officer  
Page: 27  
was only about the reasonableness of the contingency fee agreement, not the account, there was  
no reason for them to introduce evidence at that stage about what a hypothetical reasonable fee  
might be. Further, some of the new evidence was introduced to rebut inferences that the chambers  
judge had drawn from the record and to address issues he had raised on his own motion.  
[108] Rath & Company had to put its “best case forward” but only with respect to the actual issue  
that was to be decided. The Review Officer never considered the issue of quantum, there was no  
“record” on it before him, and therefore it was not possible for the determination of quantum by  
the chambers judge to be “on the record”. While the chambers judge referred to the 69 pages of  
evidence entered by Tallcree First Nation, he appears to have made no reference to the 753 pages  
of evidence introduced by the appellants: 2021 ABQB 234 at paras. 15-16.  
[109] Since the contingency fee agreement was not in play, the appellants’ fee was to be set under  
R. 10.2, supra, para. 49. As noted (supra, paras. 40, 48), the analysis of the reasonableness of the  
agreement and the fair fee was not always kept distinct.  
[110] The appellants argue that if the 20% fee in the contingency fee agreement was  
unreasonable, the chambers judge should have replaced it with a different percentage that was  
found to be reasonable. The review officer or judge, however, is not obliged to rewrite a retainer  
agreement to make it fair and can set a fair fee on any basis contemplated by R. 10.5(2).  
[111] With respect to the time spent, the chambers judge concluded that the appellants had only  
worked on the file for about 10 months: 2021 ABQB 234 at para. 37. That is inconsistent with the  
uncontradicted record. The contingency fee agreement was signed on October 14, 2015. It seems  
likely that Mr. Rath had already begun work on the file before the agreement was actually signed.  
The appellants’ involvement continued all the way through the ratification of the settlement by the  
Tallcree First Nation members in July 2017. Further, the appellants then remained involved in the  
payment of the settlement funds into trust and the complex distribution of the settlement funds to  
the individual members. The appellants worked on the file for at least two years.  
[112] Mr. Rath did not keep a record of the hours he spent on the file. The appellants estimated  
the fee that would be generated based on an hourly rate as being $391,900: 2020 ABQB 592 at  
para. 36. There was no basis on this record for the chambers judge’s suggestion that the amount of  
time had been overestimated: 2020 ABQB 592 at para. 37. His analysis completely ignores the  
many hours spent on the ratification process and the subsequent distribution of the settlement  
funds. Nevertheless, as the chambers judge pointed out, the $3 million fee that he set represented  
a significant premium over the hours invested.  
[113] The chambers judge made several references to the fact that some of the correspondence  
had been signed by Mr. Rath’s paralegal: 2020 ABQB 592 at paras. 36, 50; 2021 ABQB 234 at  
paras. 33-34, fn 1, 48. Counsel are entitled to have assistants, and in any event, Mr. Rath confirmed  
that he drafted most of the correspondence himself, and it was simply signed by his paralegal to  
Page: 28  
expedite the process. To the extent that this factor was relevant to the quantum of the ultimate fee,  
it was clearly overemphasized by the chambers judge.  
[114] The chambers judge compared the fees earned by Mr. Rath to the income of a salaried  
lawyer or judge: 2021 ABQB 234 at paras. 78-81. These considerations, which were raised by the  
chambers judge on his own motion, were, at a minimum, overemphasized. Salaried lawyers and  
judges do not suffer the risk of going unpaid for a number of years and possibly never being paid  
at all. Further, there was no evidence on the record respecting the compensation of lawyers  
generally.  
[115] The chambers judge also made assumptions about the overhead of Rath & Company: 2021  
ABQB 234 at para. 81. This factor was, at best, overemphasized. In addition, it was another issue  
raised by the chambers judge on his own motion, and there was no evidence on the record to  
support the inferences drawn.  
[116] The chambers judge also compared the claimed legal fees to real estate commissions: 2021  
ABQB 234 at paras. 75-77. Not only was this an issue raised by the chambers judge on his own  
motion, there was no evidence of standard real estate commissions on the record. Further, the  
economic underpinnings of a contingency fee agreement and a real estate commission agreement  
are so different as to make this comparison meaningless.  
[117] Finally, the income tax position of Mr. Rath and his professional corporation is not relevant  
to the reasonableness of the legal fees charged. This was another issue raised by the chambers  
judge: 2021 ABQB 234 at para. 83. Income taxes are assessed by the government after income is  
earned, and the lawyer’s tax burden is irrelevant to the reasonableness of the fees charged.  
[118] There are other problematic aspects of the chambers judge’s analysis that appear to have  
affected his conclusion about the fair fee. They include his reference to the size and location of the  
appellant firm (supra, para. 81), his erroneous assessment of Mr. Rath’s expertise and experience  
(supra, paras. 82-85), and his narrow view of the scope of legal services (supra, paras. 79-80).  
[119] Given his exclusion of relevant evidence tendered by the appellants, his overemphasis on  
some factors, and his consideration of irrelevant factors, the chambers judge’s analysis of the  
quantum of the fair fee cannot be sustained. A fresh analysis is required.  
The Proper Quantum of the Fee  
[120] Since the contingency fee agreement was not reasonable at the time it was signed in  
October 2015, the appellants’ fee must be determined in accordance with R. 10.2: supra, para. 49.  
However, the fact that the retainer started out with a contingency fee agreement remains relevant,  
because if Tallcree First Nation had not recovered on its claim it would likely have wanted the  
agreement enforced. Even though the contingency fee agreement was unenforceable, the  
appellants were still exposed to some risk of receiving nothing.  
Page: 29  
[121] The duration of the file (at least two years) and the number of hours spent (approximately  
$391,900 worth) are relevant considerations; so too are the disbursements, which were absorbed  
into the fee.  
[122] The appellants point out that the $11.5 million fee that was to be paid was clearly disclosed  
in the ratification documentation put before the Tallcree First Nation’s members, and that 94% of  
the members approved the settlement on that basis. This is not relevant, because R. 10.9 makes it  
clear that the client cannot contract away the court’s ability to review a retainer agreement. A  
further issue is that the Declaration of Trust does not contain the notice contemplated by  
R. 10.7(2)(h) and 10.7(7) that the contingency fee agreement and the account are subject to review.  
While the Tallcree First Nation’s Council was aware of the right of review, it is not clear that the  
individual members were.  
[123] Mr. Rath argued that there had been delays in advancing the Agricultural Benefits claim  
on behalf of Tallcree First Nation, and that his involvement was instrumental in accelerating the  
process. There is, however, no evidence on this record that the appellants’ involvement expedited  
the resolution of the claim or resulted in a better settlement. The appellants never amended the  
claim that had been “filed” by Ackroyd and Company. The original strategy was to have Tallcree  
First Nation’s claim piggyback on the other claims. The appellants simply adopted the same  
strategy. The 20 similar claims were being processed as a group, and there was never any realistic  
prospect of the Tallcree First Nation’s claim going from the back of the line to the front. In fact,  
despite the appellants’ involvement, the Tallcree First Nation received its offer of settlement from  
Canada some months after a number of the other claimants.  
[124] The appellants’ strategy of filing a statement of claim in the Federal Court was ineffectual.  
Since negotiation through the Specific Claims process was obviously the most desirable route to  
resolution, the litigation would have been of no assistance. Mr. Rath must have known that the  
commencement of litigation would put an end to the Specific Claims procedure. He suggested that  
filing the claim gave him access to senior officials at the Department of Justice, but there is no  
indication on the record that was the case or that those officials could or did do anything to expedite  
the process. In fact, the response to the statement of claim did not come from the Department of  
Justice, but rather from Indian Affairs and Northern Development. Within six weeks of issuance  
of the statement of claim, the litigation was put in abeyance.  
[125] As noted, the contingency fee agreement was signed during the three-year “review and  
assessment” period. It was ultimately accepted for negotiation six days before the expiry of that  
three-year period. No response was ever received to the December 10, 2015 settlement offer of  
$83.5 million. While Mr. Rath undoubtedly spoke to the Minister’s officials and the Prime Minister  
in June and July 2016, there is no indication that those meetings, or anything that arose from them,  
expedited the process. The process simply continued to run its course, and the claim was accepted  
for negotiation on August 8, 2016. That was most likely because many similar claims had been  
Page: 30  
accepted for negotiation, and the deadline was looming. There is no basis for an inference that any  
senior decision maker intervened to expedite the process.  
[126] It is difficult to tell if the federal election and the consequent change of government had  
any effect on the negotiations. Clearly the new government was receptive to the settlement of these  
claims, but since the Specific Claims process had been triggered, Canada’s options were limited  
by that process. In any event, while the change of government may have altered the risk profile of  
the file, such consequences could not be attributed to the appellants’ work or efforts, and  
accordingly do not significantly affect the fee.  
[127] In the circumstances, there is a large range of fees that could be described as reasonable.  
The respondent conceded before the chambers judge that a fee of between $1 million and $2  
million would be appropriate. That would represent a significant premium over an account based  
purely on an hourly rate. The fee of $3 million fixed by the chambers judge is generous and could  
not be described as unreasonably low. On the other hand, the respondent did not file a cross appeal.  
In all the circumstances, while it was based on an unsupportable analysis, there is no basis on this  
record to disturb the fee of $3 million.  
Bias  
[128] The appellants argued that, in addition to the reviewable errors noted, the adjudication in  
the trial court was tainted by a reasonable apprehension of bias. It is not necessary to address this  
issue in detail, because the reviewable errors of fact and law have required a fresh analysis by this  
Court.  
[129] The test for a reasonable apprehension of bias is whether a reasonable person, properly  
informed, viewing the matter realistically and practically, and having thought the matter through,  
would think it more likely than not that the judge, whether consciously or unconsciously, would  
not decide fairly. In other words, if there is an objective reasonable apprehension of bias, the judge  
should recuse him or herself. Such an apprehension can arise from the reasons given by the court,  
whether or not they are part of the ratio decidendi or merely obiter dictum: compare 2021 ABQB  
440 at paras. 26, 28.  
[130] An allegation of a reasonable apprehension of bias must be raised in a timely way. A  
litigant cannot withhold such an objection to see if the result will be favourable. However, on this  
record, the appellants raised the issue at the first reasonable opportunity.  
[131] The appellants concede that the chambers judge correctly stated the test for an appearance  
of bias, but they assert he never applied it. They fairly point out that most of the reasons at 2021  
ABQB 440 do not involve an objective analysis from the perspective of the reasonable observer.  
They amount to an apologia by the chambers judge as to what he, subjectively, intended to say or  
mean.  
Page: 31  
[132] A threshold consideration is that judges should not raise new issues or arguments, at least  
not without giving both parties a fair opportunity to make submissions. Raising new issues can  
give the appearance that the judge is attempting to bolster the case of one side or the other: R. v.  
Mian, 2014 SCC 54 at paras. 39, 42, [2014] 2 SCR 689. A related rule is that a judge is confined  
to the evidence on the record and such information as may be judicially noticed in accordance with  
the rules of evidence. It is not appropriate for a judge to introduce new evidence to the record or  
draw inferences that are not put forward by the parties.  
[133] The appellants alleged a number of reviewable errors by the chambers judge. These are  
repeatedly characterized as incorrect, improper and demonstrative of a reasonable apprehension of  
bias. Some findings are further described as derogatory, damaging to Mr. Rath’s reputation, and  
tantamount to an allegation of fraud.  
[134] Reviewable errors made by a trial judge will be corrected on appeal. For example, if the  
trial judge makes a palpable and overriding error in a finding of fact, or an inference drawn from  
the record, that decision will be reversed. However, reviewable errors are not the same thing as  
bias. When litigation engages the performance of professionals, it is difficult not to discuss the  
quality of that performance. There is no reason why a judge cannot comment on that issue, even  
in a negative light. Merely because the chambers judge made findings that the appellants  
demonstrated are incorrect would not cause a reasonable observer to think that bias was involved.  
[135] Some of the criticized comments may be little more than a poor choice of words. For  
example, the chambers judge referred to Mr. Rath as a “professional litigant”, when he is more  
properly described as a “litigation professional”. An objective observer would likely not see that  
as being an objectionable comment, even though it was literally inaccurate.  
[136] As noted, the chambers judge made findings about Mr. Rath’s expertise that were not  
supported by the record: supra, paras. 83-85. When this error was pointed out, the chambers judge  
denied ever making a ruling on the appellants’ qualifications: 2021 ABQB 440 at paras. 22, 28. A  
reasonable observer reading the reasons would not come to that conclusion. Even though Mr.  
Rath’s qualifications had never been challenged by the respondent, the chambers judge  
unreasonably blamed any misunderstanding on poor advocacy: 2021 ABQB 440 at paras. 21-25.  
One can well understand why the appellants would be concerned about the impact that this  
approach would have on the reasonable objective observer who was fully informed of the facts.  
[137] However, as noted, the reviewable errors made by the Review Officer and the chambers  
judge have been identified and corrected in this Court, making it unnecessary to issue any ruling  
on the allegation of a reasonable apprehension of bias.  
Conclusion  
[138] In conclusion, the appellants have identified a number of reviewable errors of fact and law.  
However, when a fresh analysis is completed, the contingency fee agreement was unreasonable  
Page: 32  
when it was signed, and a reasonable fee for the services provided by the appellants is $3 million.  
The appeals are accordingly dismissed. The appellants must refund the excess fees to the client in  
accordance with R. 10.27(2).  
Appeal heard on February 3, 2022  
Memorandum filed at Edmonton, Alberta  
this 11th day of May, 2022  
Slatter J.A.  
Feehan J.A.  
Page: 33  
Wakeling J.A. (dissenting):  
I.  
[139] This case is about the enforceability of a contingency fee agreement that the client entered  
into after a year of deliberation with its eyes wide open knowing the obligations it undertook and  
an information baseline comparable to that of its counsel.  
[140] As such, it is of great importance to lawyers, their clients, and the community.  
[141] This appeal brings into conflict the values promoted by freedom of contract3 and the  
obligation courts have to ensure that the public has confidence in the legal profession by  
monitoring when requested to do so the reasonableness of lawyers’ fees.4  
[142] What are the likely consequences if a court is too quick to relieve clients of their obligations  
to pay legal fees clearly stated in contingency fee agreements they understood and had sufficient  
information to assess the merits of before signing?  
3 Capital Steel Inc. v. Chandos Construction Ltd., 2019 ABCA 32, ¶ 190; 438 D.L.R. 4th 195, 259, aff’d, 2020 SCC  
25, per Wakeling, J.A. (“Freedom of contract is a fundamental value in Canada and any other society whose members’  
welfare is largely dependent on a thriving free-market economy”); Tercon Contractors Ltd. v. British Columbia, 2010  
SCC 4, ¶ 123; [2010] 1 S.C.R. 69, 123 per Binnie, J. (“[Canada recognizes] the very strong public interest in the  
enforcement of contracts”); Cavendish Square Holding BV v. El Makdessi, [2015] UKSC 67, ¶ 257; [2016] A.C. 1172,  
1278 per Lord Hodge (“the general approach of the common law [is] that parties are free to contract as they please  
and that the courts will enforce their agreements”); Belmont Park Investments Pty Ltd. v. BNY Corporate Trustee  
Services Ltd., [2011] UKSC 38, ¶ 103; [2012] 1 A.C. 383, 421 per Lord Collins (“autonomy is at the heart of English  
commercial law”); Philips Hong Kong Ltd. v. Hong Kong, [1993] UKPC 3a, ¶ 17; [1993] 1 H.K.L.R. 269, 277 (“courts  
have always avoided claiming that they have any general jurisdiction to rewrite the contracts that the parties have  
made”) & Wise v. United States, 249 U.S. 361, 365 (1919) per Clarke, J. (“There is no sound reason why persons  
competent and free to contract may not agree upon this subject as fully as upon any other”). See E. Farnsworth,  
Contracts 313 (4th ed. 2004) (“The principle of freedom of contract rests on the premise that it is in the public interest  
to accord individuals broad powers to order their affairs through legally enforceable agreements. In general, therefore,  
parties are free to make such arrangements as they wish, and courts will enforce them without passing on their  
substance”) & Eisenberg & Miller, “Attorney Fees and Expenses in Class Action Settlements: 1993-2008”, 7 J. Emp.  
Legal Stud. 248, 249 (2010) (“In normal litigation the attorney compensation can be set by private agreement between  
lawyer and client”).  
4 Harrison v. Tew, [1990] 2 A.C. 523, 530 (H.L.) per Lord Lowry (“Before the Act of 1729 [An Act for the Better  
Regulation of Attornies and Solicitors], the courts had exercised inherent jurisdiction over solicitors as officers of the  
court to direct taxation of their bills on the application of their clients”).  
Page: 34  
[143] Will it cause experienced and able lawyers to refuse to represent clients who cannot afford  
to retain counsel on a pay-as-you-go basis and compromise the ability of contingency fee  
agreements to promote access to justice?5  
[144] What will the likely consequences be if a court fails to detect the harm that may be  
associated with the enforcement of contingency fee agreements reasonable members of the public  
may consider too one-sided?  
[145] Will it cause a significant number of members of the community to refrain from retaining  
counsel when it is advisable to do so? An absence of lawyers generally impairs the ability of courts  
to resolve disputes in accordance with the law and expeditiously.  
[146] In my opinion, the October 14, 2015 contingency fee agreement between Rath & Company  
and Tallcree6 was reasonable when it was entered into7 the same conclusion Review Officer  
Pawlowski reached8 and both sides should be obliged to discharge the promises they made in it  
not just Rath & Company.9 Tallcree promised to pay Rath & Company twenty percent of the  
proceeds of its claim should it settle before discovery. The monetary value of the claim’s proceeds  
was $57,590,375 and twenty percent of this amount is $11,518,075. 10  
5 Hryniak v. Mauldin, 2014 SCC 7, ¶ 1; [2014] 1 S.C.R. 87, 92 per Karakatsanis, J. (“Ensuring access to justice is the  
greatest challenge to the rule of law in Canada today. Trials have become increasingly expensive and protracted. Most  
Canadians cannot afford to sue when they are wronged or defend themselves when they are sued, and cannot afford  
to go to trial. Without an effective and accessible means of enforcing rights, the rule of law is threatened”) & Morrison  
v. Rod Pantony Professional Corp., 2008 ABCA 145, ¶ 26; 429 A.R. 259, 266 per Slatter, J.A. (“Contingency fee  
agreements are an important device for providing access to justice to impecunious clients”).  
6 Both Mr. Molstad, Q.C., counsel for Rath & Company, and Ms. Kennedy, counsel for Tallcree before the review  
officer, agreed that the sole issue before the review officer was the reasonableness of the twenty percent contingency  
fee. Hearing Transcript 6: 8-11. Tallcree does not allege that Rath & Company failed to comply with the contingency  
fee requirements set out in rule 10.7 of the Alberta Rules of Court, Alta. Reg. 124/2010, and that the contingency fee  
agreement is of no effect.  
7 Alberta Rules of Court, Alta. Reg. 124/2010, r. 10.9 (“The reasonableness of a retainer agreement ... are subject to  
review by a review officer in accordance with these rules, despite any agreement to the contrary”) & r. 10.19(2) (“A  
review of a retainer agreement must be based on the circumstances that existed when the retainer agreement was  
entered into”).  
8 Reasons for Judgment, Hearing Transcript 139: 8.  
9 Samson Cree Nation v. O’Reilly & Assoc., 2014 ABCA 268, ¶ 17; 375 D.L.R. 4th 663, 672 per Côté, J.A. (“A retainer  
contract binds”) & Gaglardi v. Gaglardi, [1983] 4 W.W.R. 752, 753 (B.C. Sup. Ct. 1983) (“[the] solicitors must be  
held to their agreements. If a bonus in the event of success is contemplated, the client must be made aware at the outset  
of that possibility. A deal, in other words, is a deal”).  
10  
Tallcree also promised to pay for the disbursements. Rath & Company incurred approximately $100,000 in  
disbursements but did not ask Tallcree to pay this sum. Hearing Transcript 2: 7-8.  
Page: 35  
[147] Tallcree does not complain about the amount of the settlement. In fact, the settlement made  
the chief and council “extremely happy”.11 It is difficult to complain about a settlement that is in  
the range Tallcree contemplated from the commencement of the lawyer-client relationship with  
Rath & Company. Nor does Tallcree complain about the twenty percent fee. Tallcree knew that  
the contingency fee was twenty percent if the claim settled when it did.12 Tallcree’s only complaint  
is that Mr. Rath did such a good job that the mountain of cash Canada paid arrived too soon.  
According to Tallcree’s chief executive officer, “this [settlement] happened so quickly that ... 20  
percent seems outrageous”.13 Tallcree acknowledged that it would have gladly paid Rath &  
Company a much higher percentage if the case had dragged on for years and ended up in court.14  
[148] Tallcree’s current position reflects a complete misunderstanding of the benefits a variable  
percentage contingency fee agreement offers. The interests of both Tallcree and Rath & Company  
are aligned if Tallcree recovers the sum a court orders Canada to pay Tallcree as soon as possible  
or Canada agrees to pay Tallcree a sum acceptable to Tallcree as soon as possible.15 Neither side’s  
11 Hearing Transcript 78: 36.  
12 Reasons for Judgment, Hearing Transcript 134: 11-15 (“At the time the agreement was entered into, there was an  
understanding on the part of the First Nation that the ultimate settlement, if it came, would be in a range of around  
[$]50 million to around [$]80 million and the 20 percent was there. So it is a simple case of mathematics of applying  
the 20 percent to those to kind of get an idea of what the fee would be ultimately”) & Hearing Transcript 112: 25-26  
(“Q [Mr. Molstad] And [the chief and counsel] ... knew what the fee was when they signed it? A [Mr. Cardinal] They  
did”).  
13 Hearing Transcript 42: 39-40. See also id. 106: 1-3 (“Mr. Cardinal: … [O]ur biggest concern is how quickly the  
offer had come in that, you know, the time spent on the file, you know, we didn't feel at that time that it was, you  
know, fair that that much -- that little time was invested in”) (exclusive upper case text for the speaker has been altered  
in any extract from the Hearing Transcript).  
14  
Id. 37: 35-41 (“our claim started with Miller Thomson back in 2000, 2001, somewhere in that vicinity. We  
understood in entering into this contingency fee agreement that this could potentially take years. This could potentially  
take an undisclosed amount of time in which case Rath & Company would have, in our view, been quite entitled to  
take 20 to 35 percent if they had to go to Court”). The percentage increased to thirty percent and thirty-five percent if  
the settlement or a judgment occurred later. October 14, 2015 Contingent Fee Agreement and Terms of Engagement  
of Rath & Company … Agricultural and Economic Benefits Claims. See Fitzpatrick, “A Fiduciary Judge's Guide to  
Awarding Fees in Class Actions”, 89 Fordham L. Rev. 1151, 1153 (2021) (“the well-known formula that pays lawyers  
a percentage of what they recover requires clients to monitor against their lawyers settling cases prematurely for a  
smaller recovery than would have been obtained had the litigation continued; the lower the percentage, the greater the  
need to monitor”).  
15 Crown Bay Hotel Ltd. v. Zurich Indemnity Co. of Canada, 160 D.L.R. 4th 186, 192 (Ont. Gen. Div. 1998) per  
Winkler, J. (“A contingency fee arrangement limited to the notion of a multiple of the time spent may, depending  
upon the circumstances, have the effect of encouraging counsel to prolong the proceeding unnecessarily and of  
hindering settlement, especially in those cases where the chance of some recovery at trial seems fairly certain. On the  
other hand, where a percentage fee … is in place, such a fee arrangement encourages rather than discourages  
settlement. … Fee arrangements which reward efficiency and results should not be discouraged”); In re Enron Corp.  
Securities, Derivative & “ERISA” Litigation, 586 F. Supp. 2d 732, 766-67 (S.D. Tex. 2008) per Harmon, J. (“As  
explained by the Honorable H. Lee Sarokin, who independently reviewed the petition for award of attorneys' fees here  
and has provided a Declaration in support of Lead Counsel's fee request, contingent percentage fee arrangements are  
Page: 36  
interests are advanced by an extension of the time period it takes to produce this result. Tallcree’s  
interests are not advanced by a longer settlement period as opposed to a shorter settlement period.16  
A longer settlement period deprives Tallcree of the benefits associated with receipt of the court  
ordered sum or the agreed-upon settlement amount for a longer time than does a shorter settlement  
period. Assuming a seven percent rate of return, the annual lost revenue is $4 million. The loss of  
this revenue is not in Tallcree’s best interests. It goes without saying that Rath & Company, for  
the same reason, wants to be paid its fee as quickly as possible.  
[149] The review officer, not surprisingly, rejected Tallcree’s complaint out of hand:17  
You can't predict how long, but Mr. Rath did point out that from the outset he was  
brought in with the idea that he would work to get the client up to speed with the  
other First Nations and get a more rapid-than expected resolution of it. If that is true  
and if that was understood by the First Nation, then they can hardly complain that  
the 20 percent was too high because the matter unfolded in far less time than we  
expected. … [T]hat was the strategy. There seems to have been a lot of  
communication between Mr. Rath's office and the First Nation. … But I can't  
imagine that that strategy wasn't discussed throughout.  
[150] Review Officer Pawlowski made no reversible errors in concluding that the contingency  
fee agreement was reasonable.18 Rule 10.9 stipulates that “[t]he reasonableness of a retainer  
typical in class actions for three reasons: First contingent percentage fees align the interests of claimants and lawyers  
by rewarding superior performance. Second they minimize the need to monitor attorneys and to evaluate the  
reasonableness of their efforts, both of which are time consuming and often difficult to do. Third, they insure that the  
burden of financing the lawsuit is borne by class counsel rather than the class members’”) & Goldberger v. Integrated  
Resources, Inc., 209 F. 3d 43, 48 (2d Cir. 2000) (“[a compensation formula based on total accumulated hours creates]  
temptation for lawyers to run up the number of hours for which they could be paid”). See Fitzpatrick, “A Fiduciary  
Judge's Guide to Awarding Fees in Class Actions”, 89 Fordham L. Rev. 1151, 1158 (2021) (“The percentage method  
is better because the lawyer is not indifferent to the size or the speed of recovery; like the client, the lawyer wants a  
big recovery and the lawyer wants it quickly”).  
16 Weir-Jones Technical Services Inc. v. Purolator Courier Ltd., 2019 ABCA 49, ¶ 134; 442 D.L.R. 4th 9, 94-95 per  
Wakeling, J.A. (“Sophisticated civil process systems recognize that the public interest is best served by mechanisms  
that allow a court to resolve a dispute as early in the process as is feasible and with the utilization of the least-possible  
judicial and private resources”).  
17 Hearing Transcript 136: 29-38.  
18 A decision of the review officer may be set aside if the product of an unfair procedure, an error of principle, a clearly  
erroneous factual determination or is inordinately high or low. Bhatnager v. Canada, [1991] 3 S.C.R. 317, 318 per  
Sopinka, J. (“Rule 62 [of the Rules of the Supreme Court of Canada] authorizes a review of the decision of the  
Registrar and not an appeal. A judge of this Court should not generally interfere with the decision of the Registrar  
simply on the basis of a difference of opinion as to the proper amount to be allowed. Rather, there must be an error  
in principle or the Registrar must be shown to be clearly wrong in the amount allowed”); Steinke v. Hajduk Gibbs  
LLP, 2014 ABQB 34, ¶ 42; 581 A.R. 91, 106 per Wakeling, J. (“Neither the law firm nor the client has taken the  
position that the review officer was without the jurisdiction to review the accounts in the Timberlane and Caplink  
files. Nor has either side complained about the hearing procedure. Under these circumstances, the Court may only  
Page: 37  
agreement and the reasonableness of a lawyer’s charges are subject to review by a review officer  
in accordance with these rules …”.19  
[151] I would allow the appeal against the Court of Queen’s Bench order that came to the  
opposite conclusion.20  
II.  
[152] Rule 10.19(2) of the Alberta Rules of Court 21 directs that the reasonableness of a  
contingency fee agreement must be based on the circumstances that existed when it was entered  
into.  
vary or revoke the review officer’s decision if it reflects ‘an error of principle or whether the award is inordinately  
high or low’”); Betser-Zilevitch v. Prowse Chowne LLP, 2021 ABCA 129, ¶ 13 (“The standard of review is ... governed  
by the framework established in Housen v. Nikolaisen, … : Extricable errors of law and errors in principle are subject  
to review on a correctness standard. To the extent that the decision requires an interpretation of the rules of court and  
such interpretation is an extricable error of law, it is subject to review on a correctness standard. Where the question  
is one of fact, or mixed fact and law, the standard of review is ‘palpable and overriding error’”); Mercantile Bank of  
Canada v. McLennan Ross, 1988 ABCA 224, ¶¶ 11-13; 86 A.R. 311, 313 per Stevenson, J.A. (“In my view in Alberta  
the primary question on review of a quantum fixed by a taxing officer is (as in many other jurisdictions) whether he  
has made an error of principle, or whether the award is inordinately high or low”) & ¶ 6; 86 A.R. at 312 (“If the  
quantum awarded can be said to be inordinately high or low, that is a ground of interference because it betrays an error  
of principle”); Mercantile Bank of Canada v. McLennan Ross, 1987 ABCA 174, ¶ 10; 83 A.R. 322, 323 per Kerans,  
J.A. (“we are of the view that the taxing officer’s award is not shockingly low”) & Fraser Milner Casgrain LLP v.  
Kristof Financial Inc., 2012 ABQB 359, ¶ 17; 541 A.R. 245, 249-50 per Yamauchi, J. (“a court hearing an appeal  
from a review officer’s decision may find that the review officer made a finding of fact that is clearly in error”)  
(emphasis in original). The American standard of review is comparable. See Re AT & T Corp., 455 F. 3d 160, 163-64  
(3d Cir. 2006) (“We review a district court’s award of attorney fees in a securities class action for abuse of discretion.  
... ‘The standards employed calculating attorneys' fees awards are legal questions subject to plenary review, but ‘[t]he  
amount of a fee award . . . is within the district court's discretion so long as it employs correct standards and procedures  
and makes findings of fact not clearly erroneous’”).  
19 Alberta Rules of Court, Alta. Reg. 124/2010.  
20 Appeal Record F26-F27.  
21 Alta. Reg. 124/2010, r. 10.19(2) (“A review of a retainer agreement must be based on the circumstances that existed  
when the retainer agreement was entered into”). Section 68(5) of British Columbia’s Legal Profession Act, S.B.C.  
1998, c. 9 introduces the same test: “the registrar must confirm the agreement unless the registrar considers that the  
agreement is unfair or unreasonable under the circumstances existing at the time the agreement was entered into”. See  
also Mide-Wilson v. Hungerford Tomyn Lawrenson and Nichols, 2011 BCSC 1440, ¶ 232 (Registrar) (“the question I  
must pose is not: If the Action settled on December 9, 2008 [the day after the parties signed the contingency fee  
agreement] would the contemplated fee be reasonable? Rather, I must ask myself: Whether, on December 8, 2008,  
considering what the parties knew, were the contemplated fees as set out in the ... [contingency fee agreement]  
reasonable?”), varied on other grounds, 2013 BCSC 374; 35 C.P.C. 7th 318, aff’d, 2013 BCCA 559; 370 D.L.R. 4th  
1, leave to appeal ref’d, [2014] S.C.C.A. No. 77 & Fox v. Westpac Banking Corp., [2021] VSC 573, ¶ 151 per Nichols,  
J. (“those considerations relevant to fixing a commission rate for a litigation funder at the end of a class action …  
include the litigation risks of funding provided in the proceeding, which must be assessed avoiding the risk of hindsight  
bias and recognising that the funder took on those risks at the commencement of the proceeding”).  
Page: 38  
[153] The temporal focus the time the contingency fee agreement was entered into is the  
critical point.  
[154] Justice Scalia explains why this must be the case:22  
I think it obvious that the reasonableness of a contingent-fee arrangement has to be  
determined by viewing the matter ex ante, before the outcome of the lawsuit and  
the hours of work expended on the outcome are definitively known. For it is in the  
nature of a contingent-fee agreement to gamble on outcome and hours of work—  
assigning the risk of an unsuccessful outcome to the attorney, in exchange for a  
percentage of the recovery from a successful outcome that will (because of the risk  
of loss the attorney has borne) be higher, and perhaps much higher, than what the  
attorney would receive in hourly billing for the same case. … . It is something quite  
different, howeverand something quite irrationalto look at the consequences  
of a contingent-fee agreement after the contingencies have been resolved and  
proclaim those consequences unreasonable because the attorney has received too  
much money for too little work. That is rather like declaring the purchase of the  
winning lottery ticket void because of the gross disparity between the $2 ticket price  
and the million-dollar payout.  
[155] Rule 10.19(2) of the Alberta Rules of Court23 prohibits retrospective assessment of the  
reasonableness of the fee and consideration of all the circumstances that are known at the end of  
the process. 24  
[156] Hindsight makes everyone look like a genius.  
[157] Suppose a pro football head coach, with his team ahead by three points in a high-scoring  
game with one minute left to play and the scrimmage line at centre field seven yards from the first-  
22 Gisbrecht v. Barnhart, 535 U.S. 789, 810-11 (2002) per Scalia, J. (emphasis in original).  
23 Alta. Reg. 124/2010.  
24 This is not the case in class actions. E.g., Union Asset Management Holding A.G. v. Dell Inc., 669 F. 3d 632, 644  
(5th Cir. 2012) per Higginbotham, Cir. J. (“Given the Fifth Circuit's stance on choice of method, the district court did  
not abuse its discretion by using the percentage method with a meticulous Johnson analysis. ... We join the majority  
of circuits in allowing our district courts the flexibility to choose between the percentage and lodestar [the total hours  
the lawyers logged multiplied by a reasonable hourly rate] methods in common fund cases, with their analyses under  
either approach informed by the Johnson considerations [a number of factors, including time required, difficulty of  
the questions, requisite legal skills, customary fee and experience of lawyers]”) & Fox v. Westpac Banking Corp.,  
[2021] VSC 573, ¶ 148 per Nichols, J. (“A review … of a percentage fixed at an earlier time, once information  
informing questions of proportionality [between the return and risk] is available, will facilitate the Court ensuring that  
the percentage to which the law practice is ultimately entitled, remains appropriate”). British Columbia courts also  
conduct a retrospective assessment of contingency fee agreements in non-class action retainers. Mide-Wilson v.  
Hungerford Tomyn Lawrenson and Nichols, 2013 BCCA 559, ¶ 98; 370 D.L.R 4th 1, 56, leave to appeal ref’d, [2014]  
S.C.C.A. No. 77.  
Page: 39  
down marker, calls a fake kick play the kicker runs with the ball instead of kicking it. The coach  
decides on this course for a number of reasons. First, the opponent would not expect his team to  
select such a high-risk play the coach is reputed to be an old-fashioned conservative strategist.  
Second, the kicker is the best kicker in the league. He could kick the ball out of bounds within the  
opposition’s twenty-yard line seven times out of ten. A typical kick would pin the opposition deep  
in their end with the opportunity to run maybe four plays before the game was over. Third, the  
opposition probably forgot that the veteran kicker played quarterback in college and was a good  
runner. The coach is well aware of possible different outcomes successful and unsuccessful. The  
play would be a success if the kicker ran the ball down field far enough to get a first down. In this  
scenario, the offence would run out the clock to preserve the victory. Or the kicker could run the  
ball for a touchdown. This would end the game. The team would be up by ten points with less than  
a minute left in the game. This is the best possible outcome. But the coach is a savvy veteran and  
realized there were potential downsides. The kicker may be stopped short of the first down line.  
This would mean that the opposition would have much better field position than if the kicker  
angled the ball out of bounds at the opposition’s ten-yard line. Or the kicker may fumble the ball  
and the opposition recover and run for a touchdown. This is the worst outcome. After weighing all  
these considerations and quickly canvassing his coaching staff all agree he calls the fake kick  
play.  
[158] Most Monday-morning quarterbacks, if the high-risk fake kick play works out, will  
announce to the world that they would have made the very same call. This is so even if they were  
aghast when they realized that the kicker was not going to kick the ball. And most Monday-  
morning quarterbacks will question the head coach’s ability to be a football coach if one of the  
potential bad outcomes materializes, even if he or she thought it was a brilliant call when it was  
obvious that a fake kick was underway.  
[159] A Monday-morning quarterback’s opinion is only worth listening too if he or she voiced  
opposition to the fake kick play before it happened.  
[160] Same here.  
[161] Tallcree never complained about Rath & Company’s fee25 until it had derived the benefits  
of counsel’s good work and Canada had paid Tallcree $57,590,375 to settle its claim. In  
complaining, Tallcree overlooks the fact that its members overwhelmingly voted in favor of a  
settlement that made Rath & Company’s legal fees a first charge on the settlement proceeds,26  
Tallcree signed the contingency fee agreement after thinking about it for a year, and it chose not  
25 Appointment for Review of Retainer Agreement/Lawyer’s Charges filed March 15, 2018. Appeal Record P1.  
26 Hearing Transcript 4: 18-20 (“a settlement agreement with the Federal Crown … involves a trust agreement that  
was voted on by 93 percent of the community”) & 93: 18-19 (“Mr. Rath: … the trust agreement itself sets out that our  
fee is to be paid as a first charge on proceeds and our fee is 20 percent”).  
Page: 40  
to act on the recommendation of Rath & Company and obtain independent legal advice on the  
merits of the October 14, 2015 contingency fee agreement.27  
[162] To continue the football analogy, Rath & Company the fake kicker have run for a  
touchdown and Tallcree still complains. Tallcree, in essence, asserts that the kicker should have  
slowed down after making a first down so that the other side would have less time to mount a  
comeback. Such criticism is unfounded and unfair.28  
III.  
[163] A court will not enforce any retainer agreement that takes advantage of a client and  
undermines the reputation of lawyers in the community.29  
27 Reasons for Judgment, Hearing Transcript 133: 37-39 (“The First Nation ... just didn’t bother”).  
28 Samson Cree Nation v. O’Reilly & Assoc., 2014 ABCA 268, ¶ 71; 375 D.L.R. 4th 663, 679 per Côté, J.A. (“The  
appellant client’s desire now to change the fee bargain after the suit has ended, is doubly unfair”).  
29 Morrison v. Rod Pantony Professional Corp., 2008 ABCA 145, ¶ 25; 429 A.R. 259, 266 per Slatter, J.A. (“The  
courts will obviously not tolerate any sharp practice by the solicitor, or any patent unfairness.”); Steinke v. Hajduk  
Gibbs LLP, 2014 ABQB 34, ¶ 66; 581 A.R. 91, 12-13 per Wakeling, J. (“The eighth principle directs a court to ensure  
that those who are obliged to pay for legal services are treated reasonably, taking into account all the circumstances.  
... This is a jurisdiction of long-standing designed to increase the likelihood persons who utilize lawyers in defending  
their interests are not taken advantage of and are treated fairly by lawyers who are officers of the court”) & Walmesley  
v. Booth, 26 Eng. Rep. 412, 414 (Ch. 1739) (the court will not allow an attorney who has “great power and influence  
… over his client” to take advantage of his client). Ontario’s Rules of Professional Conduct explicitly guard against  
exploitative contingency fee agreements. Law Society of Ontario, Rules of Professional Conduct (2000, as amended)  
r. 3.6-2.1 (“(1) In determining the appropriate percentage or other basis of the contingency fee, the lawyer shall  
consider a number of factors, including the likelihood of success, the nature and complexity of the claim, the expense  
and risk of pursuing it, the amount of the expected recovery and who is to receive an award of costs. The lawyer shall  
advise the client of these factors. (2) A lawyer who enters into a contingency fee agreement must meet the following  
client disclosure requirements: (a) provide the client with the Law Society’s consumer guide titled ‘Contingency fees:  
What you need to know,’ available on the Law Society’s website, and a reasonable opportunity to review and consider  
it before entering into the agreement”) (emphasis added). The disclosure requirements do not apply to sophisticated  
clients or to class proceedings. Id. r. 3.6-2.1(3) (“The client disclosure requirements of this Rule do not apply to an  
agreement where: (a) a lawyer is retained to represent one or more persons in a proceeding commenced under the  
Class Proceedings Act, 1992, as amended; or (b) either the client or any person or entity responsible for the payment  
of the client’s legal fees in the matter that is the subject of the agreement is an organization that, together with any  
affiliates, members of the same joint venture or any other related persons or entities, (i) employs more than 25  
individuals, (ii) employs a lawyer on a full-time basis, or (iii) has assets or gross annual revenues that exceed $10  
million”). Ontario caps percentage-based contingency fee agreements at 50 percent unless parties jointly obtain court  
approval for a greater amount. Solicitors Act, R.S.O. 1990, c. S.15, s. 28.1(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”) & Contingency Fee  
Agreements, O. Reg. 563/20, s. 1 (“A solicitor for a client who is a claimant shall not recover more in fees under a  
contingency fee agreement than the amount recovered by the client under an award or settlement from the party or  
parties against whom the claim was made, including any costs but excluding disbursements and taxes”).  
Page: 41  
[164] The legislative foundation for a superior court’s jurisdiction to review the accounts of  
officers of the court is An Act for the Better Regulation of Attornies and Solicitors30 Westminster  
passed in 1729. This enactment established a protocol that granted clients who objected to a bill  
of an attorney31 or a solicitor32 the right to have it reviewed by a court. An attorney or a solicitor  
could not sue for an unpaid account until the taxation process was concluded.33 Long before 1729  
courts, exercising their inherent jurisdiction over attorneys and solicitors as officers of the court,  
ordered its officers to submit their bills to taxation.34  
[165] To ensure that a lawyer does not take advantage of a client in the case of a contingency fee  
agreement a court must ask two questions.  
[166] First, did the client have sufficient skills to adequately assess the merits and demerits of  
the contingency fee agreement, and to make an informed and prudent decision as to whether the  
contingency fee agreement was in its best interests?35 Put slightly differently, did the client have  
an adequate understanding of its obligations and benefits under the agreement?36  
30 2 Geo. II, c. 23, s. 23 (U.K.).  
31 An attorney practiced in the common law courts. 397 Halsbury’s Laws of England 65 (5th ed. 2020).  
32 A solicitor practiced in the courts of equity. Id.  
33 2 Geo. II, c. 23, s. 23 (U.K.). The Act did not apply to barristers. A barrister could not sue for unpaid fees.  
34 Ex p. Arrowsmith, 33 Eng. Rep. 241, 241 (Ch. 1806) (“the jurisdiction to tax the bills of attorneys and solicitors, as  
officers of the Courts, subsisted long before the [1729] Statute”) & Ex p. Earl of Uxbridge, 31 Eng. Rep. 1126, 1126  
(Ch. 1801) (“there was no doubt, the Court exercised this jurisdiction long before the [1729] Statute ...; which did  
little more than introduce the regulations, under which the jurisdiction should be exercised”).  
35  
Alberta Treasury Branches v. 1401057 Alberta Ltd., 2013 ABQB 748, ¶ 44; [2014] 3 W.W.R. 180, 207 per  
Wakeling, J. (“a sophisticated client has the necessary skills to protect its own interests when transacting professional  
business with lawyers”) & Steinke v. Hajduk Gibbs LLP, 2014 ABQB 34, ¶ 68; 581 A.R. 91, 113 per Wakeling, J.  
(“there is an increased risk that an unsophisticated consumer of legal services may be taken advantage of”).  
36 Samson Cree Nation v. O’Reilly & Assoc., 2014 ABCA 268, ¶ 83; 375 D.L.R. 4th 663, 682 per Côté, J.A. (“The  
client’s experience and sophistication is an important factor”); Morrison v. Rod Pantony Professional Corp., 2008  
ABCA 145, ¶ 27; 429 A.R. 259, 266 per Slatter, J.A. (“Of relevance here will be ... the education and abilities of the  
client, indications by the client that he or she understands the arrangement, and other similar factors. The key is that  
the client should understand how the fee will be calculated in practical terms”); Alberta Treasury Branches v. 1401057  
Alberta Ltd., 2013 ABQB 748, ¶ 44; [2014] 3 W.W.R. 180, 206-07 per Wakeling, J. (“An unsophisticated client may  
expect that the court will exercise its protective function with more vigor than will be the case if the client is a regular  
consumer of legal services and familiar with the issues which arise in the delivery of legal services. This is because a  
sophisticated client has the necessary skills to protect its own interests when transacting professional business with  
lawyers”); In re Whitcombe, 50 Eng. Rep. 56, 57 (Ch. 1844) per Lord Langdale, M.R. (“An agreement ... between a  
solicitor and client for taking a fixed sum ... is an agreement which may be perfectly good; but this Court, for the  
protection of parties, looks at every transaction of this kind with great suspicion. The matter may turn out to be  
perfectly fair and right, still it exposes the conduct of the solicitor to suspicion, and naturally awakens the vigilance  
and jealousy of this Court, seeing that one party has all the knowledge, and the other is in ignorance”) & Stedman v.  
Page: 42  
[167] Second, did the lawyer have relevant important information about the negotiation or  
litigation process it failed to share with the client that probably would have caused the client to  
come to a contrary conclusion?37 If so, the information deficit would be extremely problematic.  
[168] These two questions do not emphasize the merits or demerits of the contingency fee  
agreement itself.  
[169] If a determination is made that a client did not have sufficient skills to make a prudent  
decision and a lawyer failed to advise a client with these deficiencies to seek independent legal  
advice on the advisability of the client signing the contingency fee agreement or suffered from an  
unacceptable information deficit, the default mechanism set out in rule 10.2(1) of the Alberta Rules  
of Court applies.38 This requires a review officer to take into account the six listed factors and  
make a decision as to what is a “reasonable fee”. This is a challenging task. Rule 10.2(1) does not  
Collet, 51 Eng. Rep. 1171, 1173 (Ch. 1854) (“the settlement of a solicitor’s bill by the client for a fixed sum is valid,  
and will not be disturbed ... where it has been entered into fairly, and with proper knowledge on both sides”).  
37 Almalki v. Canada, 2019 ONCA 26, ¶¶ 39-40; 431 D.L.R. 4th 357, 369, leave to appeal ref’d, [2019] S.C.C.A. No.  
79 (“the motion judge acknowledged that contingency fee agreements were subject to closer scrutiny than purely  
commercial contracts. She went on, after a review of the relevant evidence, to hold, at para. 21: ‘In this case however,  
there is no evidence of fraud, duress, mistake of fact or unconscionability. There is no evidence of Mr. Almalki's  
failure to understand the fee agreement or specifically the effect of the language of paragraph 16 [providing that, if  
exceptional circumstances arise, the fee will include a portion of legal costs paid by the Attorney General, and parties  
will jointly apply to obtain Court approval of this, as required by the applicable legislation].’ There is no evidence that  
the plaintiffs were misled by Stockwoods. The record fully supports these findings and I would defer to them”); Re  
Stuart ex p. Cathcart, [1893] 2 Q.B. 201, 204-05 (C.A.) per Lord Esher, M.R. (“By s. 9 [of The Attorneys' and  
Solicitors' Act] the Court may enforce an agreement if it appears that it is in all respects fair and reasonable. With  
regard to the fairness of such an agreement, it appears to me that this refers to the mode of obtaining the agreement,  
and that if a solicitor makes an agreement with a client who fully understands and appreciates that agreement that  
satisfies the requirement as to fairness. But the agreement must also be reasonable, and in determining whether it is  
so the matters covered by the expression ‘fair’ cannot be re-introduced. As to this part of the requirements of the  
statute, I am of opinion that the meaning is that when an agreement is challenged the solicitor must not only satisfy  
the Court that the agreement was absolutely fair with regard to the way in which it was obtained, but must also satisfy  
the Court that the terms of that agreement are reasonable. If in the opinion of the Court they are not reasonable, having  
regard to the kind of work which the solicitor has to do under the agreement, the Court are bound to say that the  
solicitor, as an officer of the Court, has no right to an unreasonable payment for the work which he has done, and  
ought not to have made an agreement for remuneration in such a manner”); Stedman v. Collet, 51 Eng. Rep. 1171,  
1173-74 (Ch. 1854) per Sir John Romilly, M.R. (“the settlement of a solicitor’s bill by the client for a fixed sum is  
valid, and will not be disturbed ... where it has been entered into fairly, and with proper knowledge on both sides. ....  
[P]rovided the transaction be open and fair and without pressure, a solicitor and his client may ... agree that a fixed  
sum shall be paid to the solicitor, in liquidation of his bill of costs”) & Zipchen v. Bainbridge, 2008 SKCA 87, ¶ 64;  
[2008] 12 W.W.R. 397, 416 per Wilkinson, J.A. (“Freedom of contract must be respected, it is true, and lawyers must  
have fair opportunity to set the conditions under which they are willing to offer their services. The courts are loath to  
interfere in contingency arrangements, freely and fairly negotiated, but a solicitors' retainer is not, and never has been,  
a purely commercial engagement. The so-called ‘helping professions’ are not unaccustomed to meeting higher  
expectations, and in the particular circumstances of this case, those higher expectations were found to exist”).  
38 Alberta Rules of Court, Alta. Reg. 124/2010, r. 10.18(4) (“If a contingency fee agreement is disallowed, the amount  
payable to the lawyer for the lawyer’s charges must be determined under rule 10.2”).  
Page: 43  
identify what weight should be attached to any of the six factors or the conditions that might make  
one criterion more important than the others. It invites unpredictable and inconsistent  
adjudications.39  
IV.  
[170] If a determination is made that the client had sufficient skills to assess the wisdom of  
entering into a contingency fee agreement with the lawyer, or if it did not, that the lawyer  
recommended that the client seek independent legal advice, and if the client suffered no  
unacceptable information deficit about other key facts that adversely affected the ability of the  
client to assess the merits of the contingency fee, in the absence of compelling reasons that justify  
the contrary conclusion, an adjudicator must conclude that the contingency fee agreement is  
reasonable.40 There is, in effect, under these conditions a presumption that a contingency fee  
agreement is reasonable.41  
39 Steinke v. Hajduk Gibbs LLP, 2014 ABQB 34, ¶ 51; 581 A.R. 91, 108 per Wakeling, J. (“It is safe to say that  
adjudicators asked to apply these factors are seldom likely to come up with similar conclusions as to what is a  
reasonable amount. In other words, the value of this process is not predictability and certainty”).  
40 Morrison v. Rod Pantony Professional Corp., 2008 ABCA 145, ¶ 26; 429 A.R. 259, 266 (“courts should not set  
aside agreements between solicitors and clients without good cause”); Steinke v. Hajduk Gibbs LLP, 2014 ABQB 34,  
51; 581 A.R. 91, 108 per Wakeling, J. (“a court must hold the lawyer and the client to promises made in a retainer  
agreement ... in the absence of a compelling reason not to”) & Re Braithwaite, Boyle & Assoc., 171 A.R. 76, 78 (Q.B.  
Taxing Officer 1995) (“if a client, understanding the significance of [an onerous] ... clause, agrees to its terms, good  
bargain or bad, I am not inclined to overturn it”). See also Re AT & T Corp., 455 F. 3d 160, 167 (3d Cir. 2006) per  
Scirica, C.J. (“[The District] cited Cendant for the ‘proper standard’ that should be applied in class action lawsuits  
brought under the Private Securities Law Reform Act. This standard entailed ‘afford[ing] a presumption of  
reasonableness to fee requests submitted pursuant to an agreement between a properly-selected lead plaintiff and  
properly-selected lead counsel,’ a presumption that would ‘be rebutted when a district court finds the fee to be (prima  
facie) clearly excessive’”) & Baker, Perino & Silver, “Is the Price Right? An Empirical Study of Fee-Setting in  
Securities Class Actions”, 115 Colum. L. Rev. 1371, 1432 (2015) (“we tentatively propose the following set of  
arrangements to improve the [Private Securities Litigation Reform Act]’s effectiveness: 1. The lead plaintiff should  
negotiate a fee when retaining counsel to handle the case; … 3. The district court should review the negotiated fee  
terms before appointing class counsel and should uphold them unless they are clearly unreasonable or not the products  
of arm’s-length negotiations”).  
41 A lawyer has an ethical obligation to charge a fair and reasonable fee. Law Society of Alberta, Code of Conduct 58  
(February 20, 2020) (“[Rule 3.6-2 Commentary] In determining the appropriate percentage or other basis of a  
contingency fee, a lawyer and client should consider a number of factors, including the likelihood of success, the  
nature and complexity of the claim, the expense and risk of pursuing it and the amount of the expected recovery. ...  
The test is whether the fee, in all of the circumstances, is fair and reasonable”) & American Bar Assoc., Model Rules  
of Professional Conduct (2020), r. 1.5(a) (“A lawyer shall not make an agreement for, charge, or collect an  
unreasonable fee”). A presumption of judicial impartiality is also in effect for a good reason. Yukon Francophone  
School Board v. Yukon, 2015 SCC 25, ¶ 25; [2015] 2 S.C.R. 282, 297 per Abella, J. (“there is a strong presumption of  
judicial impartiality”); Bizon v. Bizon, [2014] ABCA 174; ¶ 34; [2014] 7 W.W.R. 713, 728 per Wakeling, J.A. (A  
judge takes an oath to deliver justice impartially and is presumed to act in a manner consistent with that oath”) &  
Brookes v. Earl of Rivers, 145 Eng. Rep. 569, 569 (Ex. 1679) (“favour shall not be presumed in a judge”).  
Page: 44  
[171] Clients that have sufficient skills to make informed and prudent decisions and have access  
to sufficient information to make informed and prudent decisions have to accept the fact that they  
alone made the decision to enter into the contingency fee agreement. No one forced them to do so.  
They were the decision makers. They concluded that it was in their best interests to make the  
promises recorded in the contingency fee agreement in return for the promises their lawyers made.  
They must, almost invariably, be required to discharge their obligations.42  
[172] When does a compelling reason exist to depart from this?  
[173] A court has the jurisdiction to intervene and relieve a client of the obligations it knowingly  
and voluntarily entered into when it signed a contingency fee agreement if the failure to do so  
would damage the public’s confidence in the integrity of lawyers and the general administration  
of justice.43  
[174] More specifically, a court must intervene if a reasonable observer fully informed of all  
relevant facts and the purposes served by contingency fee agreements and judicial oversight would  
conclude that the contingency fee agreement, assessed when it was entered into, was so one-sided  
that its enforcement would likely cause a significant number of potential consumers of legal  
services to decline to retain counsel when it would be advisable to do so. The absence of counsel  
jeopardizes the primacy of the rule of law and the ability of courts to adjudicate disputes fairly and  
promptly. Courts must adopt norms that encourage litigants to utilize the services of lawyers.  
[175] Judicial intervention will seldom be necessary under this test because the first two  
components of the test discussed in Part III have bite. The likelihood that a client with the skillset  
needed to make an informed and prudent decision about the merits of a contingency fee agreement  
and with access to the information needed to make an informed and prudent decision will agree to  
a contingency fee agreement that is so one-sided that it will cause a significant number of potential  
consumers of legal services not to retain counsel when it is advisable to do is extremely low.  
[176] This part of the test, unlike the first, focuses on the interests of the greater community –  
not the client.  
42 Morrison v. Rod Pantony Professional Corp., 2008 ABCA 145, ¶ 28; 429 A.R. 258, 267 per Slatter, J.A. (“A client  
cannot without good reason be allowed to negotiate and sign an agreement, stand by and permit the solicitor to invest  
his or her time and money in the file, and then at the last minute refuse to pay the negotiated compensation. Whatever  
duties there are on a solicitor when entering into a retainer agreement with a client, those duties should not allow an  
ungrateful client to deprive the solicitor of legitimate compensation”).  
43 See Lewis Estates Communities Inc. v. Brownlee LLP, 2013 ABQB 508, ¶ 28 per Brown, J. (“This ... is an important  
aspect of the lawyer-client relationship that is intended to foster public confidence in the administration of justice”).  
Page: 45  
V.  
[177] I will first consider whether Tallcree had the necessary attributes to allow it to adequately  
assess the merits and demerits of the contingency fee agreement and make a prudent decision as  
to what course was in its best interests.  
[178] There is no doubt in my mind as to Tallcree’s capacity to make a prudent decision on this  
question. It had sufficient business skills to grasp the burdens and benefits of this contingency fee  
agreement and decide whether the benefits exceeded the burdens and justified entering into the  
agreement.44  
[179] It is noteworthy that First Nations routinely utilize contingency fee agreements to advance  
large treaty claims.45  
[180] Tallcree was not a stranger to commerce and the legal profession.  
[181] Nor was it an unsophisticated entity without ties to the commercial world. It owned or had  
an interest in a number of businesses.46  
[182] Tallcree had dealt with lawyers on a regular basis in the past Miller Thomson was its  
counsel for over thirty years47 and, it would be uncharitable to assume otherwise, had the  
business acumen necessary to distinguish between legal fees based on the time lawyers spent on a  
file and their hourly rates and a contingency and the benefits and detriments associated with each  
form of retainer.  
[183] Also noteworthy is the fact that Tallcree signed the contingency fee agreement on October  
14, 2015, more than a year after Rath & Company delivered it to Tallcree. Tallcree had more than  
44 Capital Steel Inc. v. Chandos Construction Ltd., 2019 ABCA 32, ¶ 215; 438 D.L.R. 4th 195, 263, aff’d, 2020 SCC  
25, per Wakeling, J.A. (“Parties to commercial contracts have the means to look after their own interests. The public  
knows this and there is no danger that their confidence in the ability of the courts to administer justice will be eroded  
if courts decline to enforce contract terms only if they are oppressive”).  
45 Both Mr. Rath and Ms. Kennedy confirmed this is the case. Hearing Transcript 131: 18-38 (“The Review Officer:  
… You're suggesting … that there are many contingency fee agreements for … agricultural benefits settlements? Mr.  
Rath: Agricultural benefits settlements, land claims, all kinds of large First Nations claims. The Review Officer: …  
[T]hey have a lot of them done on contingency fee agreements? Mr. Rath: Absolutely”). See Gisbrecht v. Barnhart,  
535 U.S. 789, 803 (2002) per Ginsburg, J. (“Characteristically in cases of the kind we confront, attorneys and clients  
enter into contingent-fee agreements specifying that the fee will be 25 percent of any past-due [Social Security]  
benefits to which the claimant becomes entitled.’”).  
46 Hearing Transcript 59: 40-60: 1 (“[Mr. Rath]: Tallcree [has an] … operation of several hundred million dollars  
involving numerous corporations, trusts”) & id. 113: 3-4 (“[Mr. Cardinal] By the size of our First Nation, we probably  
are one of the more substantial Nations in terms of financial management”).  
47 Id. 114: 9-11. Ackroyd & Company had acted for Tallcree with respect to its Treaty 8 agricultural benefits claim  
before Tallcree retained Rath & Company. Hearing Transcript 10: 11-14.  
Page: 46  
a year to evaluate its merits and demerits. Tallcree passed a band council resolution on October  
23, 2015 formally authorizing the retention of Rath & Company.48 This was an agreement subject  
to scrutiny by the members of Tallcree. And Tallcree signed the contingency fee agreement a  
second time on August 31, 2016 to comply with the Alberta Rules of Court. All told, by the time  
Tallcree signed the contingency fee agreement for a second time it had almost two years to consider  
the wisdom of doing so.  
[184] The contingency fee agreement is in plain English and unambiguously explained the fee  
structure.49 Tallcree never suggested it did not understand the contingency fee agreement. On the  
contrary, it knew exactly what its obligation would be if the settlement was in the $50 to $80  
million range.50 Mr. Cardinal, Tallcree’s chief executive officer, said this:51 “[E]very person on  
the chief and council basically rejected the contingency fee agreement because it was excessive  
and it was talked about and talked about and then that’s why it was delayed a year”.  
[185] The indisputable fact is that Tallcree signed the October 14, 2015 contingency fee  
agreement after the chief and council debated the wisdom of doing so extensively during a twelve-  
month period with full knowledge of the promises it made to Rath & Company.  
[186] That Tallcree declined to act on Rath & Company’s recommendation to secure independent  
legal advice is telling. The explanation Mr. Cardinal provided for not retaining counsel to provide  
independent legal advice52 Tallcree did not care enough about securing independent legal advice  
to devote more time to retaining counsel after initial efforts failed to readily produce a lawyer –  
supports the conclusion that Tallcree did not need legal advice to protect its interests. There was  
nothing stopping it from securing independent legal advice before signing the October 14, 2015  
48 Appellant’s Extracts of Key Evidence 7.  
49 See Samson Cree Nation v. O’Reilly & Assoc., 2014 ABCA 268, ¶ 149; 375 D.L.R. 4th 663, 691-92 per Côté, J.A.  
(“The appellant client was sophisticated in its dealings with the lawyers. ... The agreements were simple. Their effect  
is obvious without more elaboration”) & Morrison v. Rod Pantony Professional Corp., 2008 ABCA 145, ¶ 27; 429  
A.R. 258, 267 per Slatter, J.A. (“Of relevance here will be the length of the agreement, the technicality of the language  
used”).  
50 Hearing Transcript 112: 25-26 (“Q [Mr. Molstad] And [the chief and counsel] … knew what the fee was when they  
signed it? A [Mr. Cardinal] They did”).  
51 Id. 103: 12-14. See also id. 104: 40-105:1 (“the 2014 contingency, when it was presented was not signed simply  
because they felt at the time percentages were too high”).  
52 Reasons for Judgment, Hearing Transcript 133: 37-39 (“The First Nation ... may have contacted several lawyers  
asking for referrals. No referrals were forthcoming and they just didn't bother”). See also Hearing Transcript 103: 12-  
15 (“every person on the chief and council basically rejected the contingency fee agreement because it was excessive  
and it was talked about and talked about and then that's why it was delayed a year. We took it to two different law  
firms [but never retained anyone]” & id. 103: 39-104: 2 (“The Review Officer: So the bottom line is you never talked  
to a lawyer about the contingency fee -- Mr. Cardinal: The bottom line is we couldn't find anybody to help us with  
that”).  
Page: 47  
contingency fee agreement.53 Tallcree knew exactly what it was doing. It understood that it would  
be obliged to pay Rath & Company a very large fee if its claim against Canada was resolved and  
Canada paid it a very large settlement sum. This is solid evidence Tallcree was satisfied it had  
sufficient business acumen to assess the wisdom of entry into the contingency fee agreement.  
[187] In short, there is no doubt in my mind as to the capacity of Tallcree to make an informed  
and prudent decision.  
VI.  
[188] This part of the judgment records the facts that must be borne in mind when assessing  
whether Tallcree’s decision to enter into the October 14, 2015 contingency fee agreement was  
marred by an information deficit that probably would have caused it to decline to enter into the  
October 14, 2015 contingency fee agreement.  
[189] They cover a variety of topics that relate to political and legal issues, as well as strategic  
and business considerations.  
A.  
[190] The critical time for each query is the date Tallcree signed the contingency fee agreement  
October 14, 2015.  
[191] How likely is it that Tallcree could establish Canada’s liability?  
[192] What did Tallcree consider constituted a fair settlement range?  
[193] What was the likelihood Canada would either agree to negotiate and pay a sum satisfactory  
to Tallcree or a body with authority to order Canada to pay a sum to Tallcree would order Canada  
to make such a payment?  
[194] How much time would likely elapse before Tallcree received any payment as a result of a  
settlement or a judgment of a court or the specific claims tribunal? 54  
[195] What expenditure of time and money would the parties reasonably expect Rath & Company  
to make before Rath & Company could expect to be paid?  
53 Hearing Transcript: 112: 19-20.  
54 Long, Miller and Mullins v. Sawchuk, 2002 BCSC 542, ¶ 58 (“It will be the rare case that the course that litigation  
will take will be known at the outset. It will often be most difficult to know, at the time the contingency agreement is  
signed, with any degree of certainty how complex an action may become, whether liability will be [in] issue, the  
amount that may be recovered, the risk to the law firm or the time it will take to bring the action to conclusion”).  
Page: 48  
[196] Was the Conservative government, led by Prime Minister Harper, opposed to settling  
claims of this nature? If the Conservatives won the upcoming federal election, would it change  
course?  
[197] Was there likely to be a change of government at the next federal election?  
[198] If the Liberal Party of Canada, under the leadership of Justin Trudeau, formed a majority  
government after the next election, would it be more receptive to resolving longstanding treaty  
disputes than the previous Conservative government?  
[199] What protocols are established by the Specific Claims Tribunal Act?55  
[200] What skill level is necessary for a lawyer handling a file of this nature? Is the proceeding  
complex?  
[201] Did Rath & Company have the skills necessary to advance Tallcree’s interests under the  
court processes or the protocols established by the Specific Claims Tribunal Act?  
[202] Did the lawyers that represented Canada have more skills than Tallcree’s lawyers?  
[203] Would the conduct of other actors besides Rath & Company affect the outcome?  
[204] Did Tallcree have the resources to pay legal fees and disbursements on an ongoing basis,  
if Rath & Company agreed to act on a fee-for-service basis? What were the legal fees likely to be?  
Did Tallcree want to pay Mr. Rath on a time-spent basis?  
[205] Did other First Nations utilize contingency fee agreements to prosecute treaty cases? If so,  
how frequently?56  
[206] If Tallcree agreed to compensate Rath & Company on a fee-for-service basis, what would  
the legal fees likely have been?  
[207] If the likely contingency fee exceeded the likely fee-for-service fee, would the differential  
have been acceptable to Tallcree?  
[208] What benefits and detriments would the contingency fee agreement have bestowed on  
Tallcree? Were the benefits great enough and the detriments low enough to justify paying the likely  
contingency fee?  
55 S.C. 2008, c. 22.  
56 See Gisbrecht v. Barnhart, 535 U.S. 789, 804 (2002) per Ginsburg, J. (“Traditionally and today, the marketplace  
for Social Security representation operates largely on a contingency fee basis.’”).  
Page: 49  
[209] What minimum percentage ensures that counsel devotes the necessary time and resources  
to maximize the recovery for the client?57 There is a point that best represents the accommodation  
of the interests of both Tallcree and Rath & Company. A client’s interests are not served by a  
contingency fee that is not high enough to cause counsel to invest the amount of time required to  
maximize the client’s return. At what point is the fee too high, in the sense that a lesser percentage  
would still cause counsel to devote the time and resources needed to maximize the client’s  
recovery?  
[210] What contingency fee comparators are there in the marketplace?  
[211] What risks did Rath & Company face in doing business with Tallcree? Did Tallcree  
regularly pay its bills? Would enough Tallcree members turn out to vote to constitute a valid  
ratification? Would the leadership of Tallcree do something imprudent and unexpected that might  
jeopardize any settlement?  
[212] This is not an exhaustive list, but it is fairly thorough.  
B.  
[213] There is nothing in the record that remotely supports the notion that Tallcree labored under  
an information deficit when compared to Rath & Company that had it not existed would probably  
have caused Tallcree to decline to sign the October 14, 2015 contingency fee agreement.  
[214] I am satisfied that Tallcree had sufficient information to make an informed and prudent  
decision about the merits and demerits of the contingency fee agreement. While it is unlikely that  
Tallcree had access to all the information Rath & Company had, there is no reason to conclude  
any information Rath & Company had that Tallcree did not would have caused Tallcree to come  
to a different conclusion.  
[215] I am satisfied that both Tallcree and Rath & Company were on a level playing field with  
respect to negotiating a retainer.  
57 “Developments in the Law–The Paths of Civil Litigation”, 113 Harv. L. Rev. 1752, 1830 (2000) (“Insofar as they  
pursue their own interests as financiers of legal claims, plaintiffs’ attorneys will invest resources in their cases so as  
to maximize their own return ... . If the attorneys’ share of the settlement or damage award is too low, they will  
underinvest in the case, which will lead to a smaller than optimal recovery for the plaintiff. If the fee is too high, then  
the attorneys will attempt to maximize the expected judgment but will reap a surplus that would otherwise have gone  
to the plaintiffs. Calculating the percentage necessary to maximize the plaintiffs’ net recovery requires knowledge and  
experience that few plaintiffs and, in the case of class actions, few judges possess”) & Perdue v. Kenny A. ex. rel.  
Winn, 559 U.S. 542, 552 (2010) per Alito, J. (“a ‘reasonable’ fee is a fee that is sufficient to induce a capable attorney  
to undertake the representation of a meritorious civil rights case. … but that does not produce windfalls to attorneys’….  
Section 1988's aim [that permits recovery of reasonable fees for prevailing party] is to enforce the covered civil rights  
statutes, not to provide ‘a form of economic relief to improve the financial lot of attorneys’”).  
Page: 50  
[216] Both sides probably thought that it was more likely than not that there would be a change  
in the federal government at the upcoming election. And no doubt both Tallcree and Rath &  
Company anticipated that the next government would be more receptive to advancing the interests  
of aboriginal communities. In making these observations, I note that neither Mr. Rath nor Mr.  
Cardinal directly58 addressed these subjects in their evidence before the review officer. Common  
sense allows me to draw inferences from indisputable facts.  
[217] In addition, both Tallcree and Rath & Company must have known that the Minister of  
Indigenous Affairs and Northern Development had not declared Canada’s willingness to negotiate  
with Tallcree its Specific Claims Tribunal Act claim59 and that this was a hurdle that Tallcree had  
to clear.  
[218] As well, they both must have been aware as of October 14, 2015 that Canada had not  
presented any settlement proposals to Treaty 8 adherents after negotiations with the Bigstone Cree  
Nation concluded on December 13, 2010. Tallcree led no evidence that Rath & Company knew  
when Canada would do so. And Mr. Rath’s evidence was that he did not:60 “[T]here was no ... real  
prospect that this time around that these claims were going to settle any quicker ... than they had  
settled on any of the previous occasions where Canada had tried to settle these claims”. Counsel  
for Tallcree never even asked Mr. Rath any questions about the information he had on this topic  
as of October 14, 2015, the date Tallcree executed the contingency fee agreement. As a result,  
there is no evidence as to when Canada presented settlement offers to any Treaty 8 adherents other  
than Tallcree February 2, 2017.61  
58  
The possibility of either favorable or unfavorable government changes appear to have been within Tallcree’s  
contemplation. Tallcree’s Factum ¶ 4 (“It was common ground in the proceedings before the … [review officer] that  
little progress had been made in the resolution of any agricultural benefits claims throughout the tenure of the Stephen  
Harper government from 2006 to 2015. In 2004 the prior Liberal administration had conducted an assessment to  
determine the per person value of such claims under Treaties 5 and 8, and held some discussions on the basis of that  
valuation, but those discussions were shelved following the election of the Harper government”).  
59 Specific Claims Tribunal Act, S.C. 2008, c. 22, s. 16(1)(b).  
60 Hearing Transcript 66: 19-22.  
61 A review of Crown-Indigenous Relations and Northern Affairs Canada’s Status Report on Specific Claims reveals  
that eighteen Treaty 8 adherents signed their agricultural benefits settlement agreements between June 21 and  
November 29, 2017 as follows in chronological order: Doig River on June 21; Saulteau on June 26; Fort McMurray  
on June 27; West Moberly on June 29; Blueberry River on June 30; Sturgeon Lake Cree on July 11; Swan River on  
July 13; Tallcree on July 21; Whitefish Lake on July 24; Prophet River on July 25; Athabasca Chipewyan, Black Lake  
and Fond du Lac on August 15; Fort Nelson on September 28; Halfway River on October 3; Duncan’s on November  
9; Mikisew Cree on November 10; and K’athlodeeche on November 29. Government of Canada Crown-Indigenous  
Relations and Northern Affairs Canada, Status Report on Specific Claims. https://services.aadnc-  
aandc.gc.ca/SCBRI_E/Main/Reporting Centre/External/externalreporting.aspx.  
Page: 51  
[219] According to Mr. Rath, Canada had settled Bigstone Cree’s Treaty 8 agricultural benefits  
claim on terms that made it a very unattractive precedent to other aboriginal communities.62 On  
December 13, 2010 Canada paid the Bigstone Cree $15,000 a person to settle its agricultural  
benefits claim, as part of a larger land claims settlement.63 Mr. Rath reported that the agricultural  
benefits settlement was not the product of real negotiations.64  
[220] Mr. Rath presented Tallcree with an action plan that appealed to Tallcree. So both sides  
knew what the strategy going forward was.  
[221] Tallcree hoped that Canada would either agree or be ordered to pay Tallcree to discharge  
Canada’s obligations under Treaty 8 regarding unpaid agricultural benefits between $50 to $80  
million and admitted that it could have figured out the legal fee Rath & Company would earn65 –  
twenty percent of $50 million is $10 million; twenty percent of $80 million is $16 million.  
62 Hearing Transcript 67: 17-31. Bigstone Cree Nation settled together treaty land entitlement and agricultural benefits  
claims with Canada and Alberta. Fact Sheet Settlement Agreement with Bigstone Cree Nation. https:  
//www.canada.ca/ en/news/archive/ 2011/09/ fact-sheet-settlement-agreement-bigstone-cree-nation.html. Bigstone  
Cree Nation signed the claim settlement on April 21, 2010, Alberta on December 12, 2010 and Canada on December  
13, 2010. Government of Canada Crown-Indigenous Relations and Northern Affairs Canada, Status Report on  
Specific Claims. https:// services.aadnc-aandc.gc.ca/ SCBRI_E/Main/ ReportingCentre/ External/ externalreporting.  
aspx. See also Specific Claims Research Centre, Bigstone Treaty Land Entitlement (“In 1981, the band submitted a  
claim regarding the size of the reserve lands. … Negotiations between Alberta, Canada and Bigstone Cree have been  
going on since 1999. … The claim was finally resolved when a settlement agreement of $259,400,000 was reached  
between the Bigstone Cree Nation, Alberta, and Canada on December 2010”). https://specific-claims.ca/  
bigstone%20treaty%20land%20entitlement & First Nations Drum, “Bigstone Cree Overwhelmingly Ratify Major  
Treaty Settlement” (March 19, 2010) (“The Bigstone Cree emphasize that the agreement is … the government of  
Canada’s fulfillment of its responsibility as set out in Treaty 8 under the Treaty Land Entitlement clause and the  
Agricultural Treaty Benefits clause”). http://www.firstnationsdrum.com/2010/03/bigstone-cree-overwhelmingly-  
ratify-major-treaty-settlement/. It appears that this was the second settlement of Treaty 8 Agricultural Claims. The  
first involved the Fort McKay First Nation on March 31, 2004. Government Of Canada Crown-Indigenous Relations  
and  
Northern  
Affairs  
Canada,  
Status  
Report  
on  
Specific  
Claims.  
https://services.aadnc-  
aandc.gc.ca/SCBRI_E/Main/ReportingCentre/External/externalreporting.aspx.  
63 Hearing Transcript, 66: 37-67: 31.  
64 Id. Tallcree never challenged Mr. Rath’s assertion or led any evidence to contradict it.  
65 Reasons for Judgment, Hearing Transcript 134: 11-15 (“At the time the agreement was entered into, there was an  
understanding on the part of the First Nation that the ultimate settlement, if it came, would be in a range of around  
[$]50 million to around [$]80 million and the 20 percent was there. So it is a simple case of mathematics of applying  
the 20 percent to those to kind of get an idea of what the fee would be ultimately”); Hearing Transcript 42: 27-34  
(“The Review Officer: … So you knew the range, you had the percentage so you could have sort of sorted out in your  
mind what this is going to cost in the end. Mr. Cardinal: I could have sorted it out, absolutely”) & id. 37: 30-33 (“The  
Review Officer: So when the contingency fee agreement was entered into, you probably know roughly what kind of  
moneys are at stake here. Mr. Cardinal: I would say yes to that”).  
Page: 52  
[222] The review officer had no doubts about the fact that the leaders and members of Tallcree  
knew from the outset that the contingency fee was twenty percent of a very large sum:66  
[T]here is absolutely no question that [the] First Nation didn't understand from the  
outset that 20 percent was the fee. There is no question that they knew around the  
range of recovery that was expected, and Mr. Rath reminded them on a large  
number of occasions, according to Mr. Cardinal, that this is 20 percent. It is 20  
percent. So they were constantly reminded of that throughout. … [T]he contingency  
fee amount was referred to in the trust agreement. It was put before all of the  
members of the First Nation for votes and … they voted in favour of it.  
[223] Tallcree presented no evidence as to the legal fees it anticipated it may have to pay if Rath  
& Company agreed to work on a fee-for-service basis.67 Ms. Kennedy, counsel for Tallcree, never  
asked Mr. Rath a question on this topic. And Tallcree never asked Rath & Company to undertake  
this file on a fee-for-service basis. It is obvious that Tallcree never considered this at the time68  
when it signed the October 14, 2015 contingency fee agreement.  
[224] How much time did Tallcree believe it would take before Canada would agree to pay  
between $50 to $80 million or be ordered to pay these very large sums? Mr. Cardinal informed the  
review officer that Tallcree “believed at the time that this could potentially take years”.69 He told  
the review officer that, “[n]one of the chief or council knew how many of these other Nations were  
ready to settle”.70  
[225] Mr. Rath, in response to a question from Review Officer Pawlowski, explained the political  
facts-of-life that suggested a prompt resolution was not just around the corner:71  
[T]here was no ... real prospect that this time around that these claims were going  
to settle any quicker or any better than they had settled on any of the previous  
occasions where Canada had tried to settle these claims.  
66 Reasons for Judgment, Hearing Transcript 137: 14-21.  
67 There was some disagreement as to whether Tallcree paid Rath & Company the legal fees it owed the firm arising  
from the 2008 retainer. Hearing Transcript 56: 6-13 & 101: 23-102: 35.  
68 Hearing Transcript 41:30-39 (“Mr. Cardinal: … If we had known at the beginning that this is what it was going to  
cost us, we would have cash managed it. It would have saved ourselves 11 million bucks. … [W] we could have wrote  
him a cheque for this amount at any point in time and cash managed it, given the number of years, days, however long  
it is going to take”).  
69  
Id. 42: 27-34. See also id 37: 35-37 (“Mr. Cardinal: … We understood in entering into this contingency fee  
agreement that this could potentially take years”).  
70 Id. 42: 1-2.  
71 Id. 66: 19-30.  
Page: 53  
... [Y]ou have to look at these claims in the context of the potential liability or as  
Canada, you know, and their lawyers look at it, the floodgates of these claims  
opening up. Even with a valuation of $42,000 per person, given the number of  
treaties that contain agricultural benefits provisions, the number of individual  
Indians that are involved, these claims have the potential of creating liability to the  
Federal Government sufficiently to change Federal budgets. We're talking in the