WHY CLIENTS WHO SETTLE THEIR DIVORCE CASE MAY HAVE "SETTLER'S REMORSE"

Everyone agrees that a courthouse is the worst place to resolve a family law issue and now, lawyers are mandated by law to exert every effort to assist clients to settle their disputes outside of the formal justice system. The menu of options includes collaborative law, mediation, settlement conferences, med/arb, and arbitration. 

Section 8(2) of the Family Law Act provides:

"...a family dispute resolution professional consulted by a party to a family law dispute must

(a) discuss with the party the advisability of using various types of family dispute resolution to resolve the matter, and

(b) inform the party of the facilities and other resources, known to the family dispute resolution professional, that may be available to assist in resolving the dispute."

Most lawyers take this obligation seriously and work hard to keep their clients out of court. However, sometimes a lawyer's efforts to manoeuvre a client into an out-of-court settlement, where tens of thousands of dollars can be saved, and immense emotional stress avoided, backfires on the lawyer.

The recent case of Vicencia v. Gradley 2018 BCSC 1338 illustrates such a situation. Ms. Vicencia, age 74, retained senior counsel to assist her to resolve the issues arising from the breakdown of her 36-year marriage. She had allegedly put up with her husband's bad behaviour for years, conduct which included his inability to contribute financially to their relationship, sexual abuse, adultery, theft, and drunkenness. 

Of course, her experienced counsel knew that these allegations and complaints had no bearing on the legal issues, the primary one being the division of Ms. Vicencia's pension. 

The Court described the legal services provided by counsel, all undertaken with the goal of resolving the outstanding issues, including two chambers appearances for document production and a divorce order, the continuation of a discovery, and an 11-hour mediation, together with the consultations, preparation, meetings and correspondence related to the services. At the conclusion of the mediation, Ms. Vicencia's case was settled with the family property, including the pension, divided equally between her and her husband. 

Ms. Vicencia expressed relief at the resolution and hugged her counsel at the conclusion of the marathon mediation session, but that only lasted 11 days when she began complaining that she signed the settlement agreement without reading or understanding it. 

Her next gambit was to challenge her lawyer's bill for legal services in the amount of $17,430.00, charged at a rate of $350 an hour and completed between May 9, 2017 and July 11, 2017.

Her counsel advised the court that her client was fully informed, understood and read the agreement and was fully aware and agreeable to the terms of the mediated settlement. The lawyer subpoenaed the mediator whose evidence confirmed that of her counsel. 

The court remarked that while the Agreement to Mediate stipulated that the mediator would not be called for any court proceeding, the law permitted the mediator to testify if the interpretation of the settlement agreement was put in issue. Ms. Vicencia had done that. 

Interestingly, the settlement agreement permitted either party to withdraw from the deal up to 4 days after the mediation session, but neither party did. 

Author/Lawyer Steve Mehta says this about settler's remorse:

"First, why does it occur? According to research, people are poor at predicting the true state of their emotions. Second, buyers’ remorse attaches to people’s self confidence about the decision. Often times, mediation and litigation is a foreign environment and the clients fear that they may have made the wrong decision because of lack of knowledge."

Finally, a settlement of the financial issues in a divorce case never comes close to mitigating the emotional issues described by Ms. Vicencia. Not surprisingly, the court refused to reduce her lawyer's bill, calling it eminently reasonable. Ms. Vicencia's settlement negated the need for a 10-day trial, but left her with an additional costs award of $3,000 for her failed attempt to reduce her lawyer's bill.