Toronto police officer owes law firm $50k after turning down $1.3-million settlement

Employment law boutique Levitt LLP recommended Const. Firouzeh Zarabi-Majd accept deal from Toronto Police Service

A Toronto police officer pursuing the force for alleged systemic harassment and abuse must pay her former lawyers more than $50,000 in fees after rejecting a $1.3-million settlement it had negotiated on her behalf.

According to a recent Ontario Superior Court ruling, Const. Firouzeh Zarabi-Majd was one of three officers who approached Toronto employment law boutique Levitt LLP about alternative legal avenues open to them, in addition to a human rights complaint already in progress against the Toronto Police Service.

When they later fell out, Zarabi-Majd claimed she should not have to pay anything to the law firm after turning down the offer, and even requested a refund for money she had already paid them, alleging that the contingency agreement she signed violated Ontario’s Solicitors Act.

But Justice Carole Brown sided with Levitt LLP, finding that the law firm had explained to Zarabi-Majd that she would have to pay their fees if she refused to accept a reasonable settlement.

“In this case, I am satisfied that Levitt LLP took on considerable risk in representing the applicant, performed significant work pursuant to the instructions of the applicant and for her benefit, obtained a fair and reasonable settlement offer, and is entitled to compensation, despite the fact that the applicant refused to settle on the basis offered,” Justice Brown wrote, ordering Zarabi-Majd to pay the firm $52,960.25 plus HST on a quantum meruit basis, as well as disbursements of $11,613.83, inclusive of HST.

Still, that was well short of the $500,000 the firm would have been due under the contingency fee agreement, had it been enforced.

“We won on all points. We’re pleased,” Levitt LLP partner Tatha Swann told Court Report Canada following the ruling.

Zarabi-Majd’s counsel did not respond to a request for comment, but the officer recently told CBC’s The Fifth Estate that turning down the settlement wasn’t “about the money.” She explained that she didn’t want to be bound by a non-disclosure agreement, preferring to speak out publicly on behalf of female officers too scared to.

In addition, she told the investigative program that her 10 years at TPS were marred by incidents of harassment, including an inspector who labelled her a “waste of space,” a sergeant who kissed her without consent and inappropriate communications from male colleagues.

"The environment is so toxic you're just constantly trying to survive," Zarabi-Majd said. "If this behaviour doesn't stop at the station, it just bleeds into the community, and it affects everybody."

According to Justice Brown’s decision Zarabi-Majd had already launched a complaint with Ontario’s Human Rights Tribunal when she and two of her colleagues approached Levitt LLP in November 2018 about alternative legal avenues to pursue her employer.

The firm was only prepared to pursue settlement of the issue, the decision says, because of the high likelihood any civil action would be dismissed for lack of jurisdiction as a result of the officers’ status as union employees, and the parties signed a limited scope contingency fee retainer.

A clause in the agreement provided for payment of fees to the firm in the event the client received a reasonable settlement offer recommended by the firm, but rejected it. According to Justice Brown’s ruling, t Zarabi-Majd denied this provision was discussed with her, but the judge was satisfied based on other evidence that the law firm fully explained the details of the retainer and its riskiness, given the state of the law on union employees.

Following mediation, the TPS made its offer, consisting of a $400,000 lump sum, plus another $900,000 paid over 12 years at the reduced salary level Zarabi-Majd was receiving on sick leave for PTSD.

This was a better result than the law firm had anticipated, and while her two colleagues accepted similar offers, the decision says Zarabi-Majd turned down the deal.

“The applicant took the position that the offer would leave her less well off. However, she would have received what she was currently receiving as sick pay for 12 years, without the requirement to prove that she qualified for long term disability for PTSD. The amounts were non-taxable. She was guaranteed her sick leave pay for 12 years without having to prove entitlement to it by having a medical practitioner evidence her continued inability to work over the 12 year period, and would also receive a substantial lump-sum,” Justice Brown wrote. “I do not accept the applicant’s position and find that the offer was indeed fair and reasonable in all the circumstances.”

Based on the rejected offer the firm’s contingency fee would have been $488,000 plus disbursement of $11,600, but Levitt LLP ultimately billed Zarabi-Majd for $226,000.

After the police officer launched her application for a declaration that the law firm had breached the Solicitors act and that contingency fee was unenforceable, the law firm eventually agreed not to enforce it and offered to refer the matter for assessment.  

But after determining that the law firm was entitled to compensation for its work, Justice Brown concluded it made more sense for her to fix the fees on a quantum meruit basis, rather than starting again before an assessment officer.

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