Birth injury litigation is among the most complex work undertaken by medical malpractice lawyers. These cases can take years to resolve and require extensive medical evidence, expert opinions, and substantial financial investment. For lawyers working on a contingency fee basis, the risks are significant. Thousands of hours and hundreds of thousands of dollars in disbursements may be invested without any guarantee of recovery.
In D.V. v. Cordocedo, 2026 ONCA 705, the Ontario Court of Appeal considered the reasonableness of contingency fees arising from the settlement of a catastrophic birth injury claim. The decision provides important guidance on contingency fee agreements and the court’s role in approving settlements involving minors. It also addresses a related issue: protecting a child’s identity while respecting the open court principle.
For birth injury lawyers, the decision highlights the importance of documenting the risks and work involved throughout a retainer, while considering how to protect the privacy of the child whose future the litigation is intended to secure.
A Fair Agreement Does Not Guarantee a Reasonable Fee
The minor appellant suffered a traumatic brain injury at birth, allegedly because of the negligence of the attending midwives and obstetrician. His parents retained counsel under a contingency fee agreement providing for a fee of 35 per cent of any settlement or damages before the action was set down for trial, increasing to 40 per cent thereafter.
By the time the matter settled, counsel had docketed 2,208.37 hours of work, representing fees of $550,145.90 before HST. Disbursements totalled $189,122.28, inclusive of HST. Counsel voluntarily reduced the fee from 40 per cent to just under 26 per cent, proposing total counsel fees of approximately $3.28 million, including HST, across the settlement allocations. The proposed fee attributable to D.V. was approximately $2.83 million, including HST.
The motion judge accepted that the agreement was fair when entered into, particularly given the family’s inability to fund the litigation themselves. However, the judge found the proposed fee unreasonable and reduced it to $1.65 million. The Court of Appeal upheld that decision.
The case reinforces the distinction between fairness when an agreement is made and reasonableness when the fee is presented for approval. Fairness focuses on the circumstances in which the client entered the agreement, including whether the client understood its terms. Reasonableness is assessed when the court considers the proposed fee, taking into account all relevant circumstances.
As explained in Henricks Hunter v. 814888 Ontario Inc. (Phoenix Concert Theatre), 2012 ONCA 496, these are distinct inquiries. A contingency fee agreement may be fair at the outset without the resulting fee necessarily being reasonable at settlement.
This distinction is especially important in birth injury litigation. The family may have no practical means of advancing a claim without counsel assuming substantial financial risk. However, neither the existence of a signed agreement nor the size of the settlement determines the appropriate fee.
Assessing Risk Throughout the Retainer
The Court of Appeal recognized the importance of the risk counsel assumes at the beginning of a retainer. That risk reflects the access to justice purpose of contingency fee agreements and informs the assessment of the time spent, expenses incurred, responsibility undertaken, and other circumstances of the case.
Birth injury claims can be particularly difficult to assess at the outset. Counsel may need to fund several expert opinions before even knowing whether the claim can succeed. However, the Court emphasized that the initial risk cannot overwhelm the overall analysis. The court must consider the entire retainer, including how the risks evolved as the litigation progressed, the work performed, the complexity of the matter, the result achieved, and the interests of the client.
For lawyers, this means that documenting the initial risk is important, but so is recording how the case develops. The assessment should reflect the actual course of the retainer rather than focusing exclusively on the uncertainty at the outset or the successful outcome at the end.
Where a minor’s settlement requires court approval, counsel should be prepared to explain the proposed fee in context. Relevant records should capture the uncertainties surrounding liability and causation, anticipated expert requirements, significant developments, work undertaken, and disbursements incurred. Counsel should not assume that a properly executed agreement or substantial settlement will, on its own, establish that the fee is reasonable.
Protecting the Child’s Identity: Initialization and Open Courts
The financial interests of an injured child are not the only concern in a catastrophic birth injury action. These cases often involve sensitive medical information, permanent disabilities, and evidence concerning a child’s future functioning and care needs. Public access to court records may create lasting privacy concerns for a child who has little understanding of the litigation being conducted on their behalf.
Sections 135 and 137 of the Courts of Justice Act establish aspects of the framework governing open hearings and public access to court documents. In Sherman Estate v. Donovan, 2021 SCC 25, the Supreme Court of Canada confirmed that restrictions on court openness require a serious risk to an important public interest, a showing that the order is necessary because reasonable alternatives will not adequately address the risk, and a proportionality assessment weighing the benefits against the negative effects.
Children’s vulnerability can support privacy protection. In A.B. v. Bragg Communications Inc., 2012 SCC 46, the Supreme Court recognized the importance of protecting children from the risks associated with public identification.
In D.V., protecting the child’s identity also required protecting the identities of his parents, because identifying the parents could effectively identify the child. The Court concluded that using initials and making targeted redactions to identifying information, including addresses, the child’s school, and date of birth, adequately protected the child’s identity. Broader redactions of substantive information, including medical evidence, damages evidence, and settlement details, were not justified.
The decision illustrates the importance of considering initialization early in a birth injury action. Privacy concerns should be assessed alongside the need to advance the claim, particularly where the court record may contain sensitive information about a minor’s health and future. At the same time, requests for privacy protection must be carefully tailored to the specific risk and the open court principle.
Conclusion
D.V. v. Cordocedo offers important lessons for lawyers handling catastrophic birth injury claims. Contingency fee reasonableness must be assessed in light of the entire retainer, including the initial risk, the evolution of the litigation, the work performed, and the result achieved. A fair agreement does not guarantee a reasonable fee, just as a successful outcome does not erase the uncertainty and investment that preceded it.
The decision also underscores that protecting a child’s interests extends beyond securing financial compensation. Initialization and targeted redactions may protect a minor’s identity while preserving public access to the substance of the proceedings.
For birth injury lawyers, these responsibilities begin well before settlement. Careful documentation, thoughtful fee planning, and early consideration of the child’s privacy can help ensure that the litigation protects both the child’s financial future and their personal interests.
