The Doctrine of Public Policy in Canadian Contract Law

24 / Annual Review of Civil Litigation
recently rejected the traditional common law position that contingency fee
agreements were champertous,'2' noting that public policy considerations relating
to the administration of justice had evolved to place a greater emphasis
upon access to the courts than in the past. The Court stated that:
Where can be no doubt that from a public policy standpoint, the attitude towards
permitting the use of contingency fee agreements has undergone enormous change
over the last century. The reason for the change in attitude is directly tied to
concerns about access to justice. Over time, the costs of litigation have risen
significantly and the unfortunate result is that many individuals with meritorious
claims are simply not able to pay for legal representation unless they are successful
in the litigation.. . I am persuaded that the historic rationale for the absolute
prohibition is no longer justified.' 22 [emphasis added]
McIntyre thus represents an example of the courts reformulating the public
policy doctrine to respond to the impact of changing social conditions upon one
of the doctrine's underlying concerns.'23
4. Contracts Involving Immorality
The category of public policy that is concerned with contracts involving
immorality is perhaps the most dynamic and theoretically interesting area of
the doctrine's application.124 Although one writer has noted that "[a] perusal of
121 As noted in McIntyre, supra note 120 at para. 56, every other Canadian province and
territory has enacted legislation or rules of court which alter this position and permitted
the use of contingency fees. The Ontario legislature followed suit subsequent to McIntyre
by amending the Solicitors Act, R.S.O. 1990, c. S.I5.
122 McIntyre, supra note 120 at paras. 55 and 70.
123 The Court in McIntyre, supra note 120 at paras. 71-73, was also careful to note that its
decision was partly based upon the existence of a regulatory framework which it believed
was sufficient to prevent abuses of process through lawyer-client contingency fee agreements.
The absence of such a framework in the case of paralegals led the Court in Tri
Level Claims Consultant Ltd. v. Koliniotis (2005), (sub nom. Koliniotis v. Tri Level
Claims Consultant Ltd.) 201 O.A.C. 282, [2005] O.J. No. 3381 (C.A.) at paras. 23-33
to hold that paralegal-client contingency fee agreements should remain barred on the
basis of the public policy doctrine.
124 The general proposition that a contract which is contrary to morality may be unenforceable
was recognized in Jones v. Randall (1774), 1 Cowp. 17 at 37 (Eng. K. B.). The
idea that immoral behaviour is contrary to public policy has also been recognized in
conflict of laws jurisprudence, where the doctrine is often invoked as a defence to the
recognition and enforcement of foreign judgments: see Boardwalk Regency Corp. v.
Maalouf (1992), 6 O.R. (3d) 737 (C.A.), additional reasons at (1992), 6 O.R. (3d) 737
at 758 (C.A.); and Beals v. Saldanha, 2003 SCC 72 at paras. 71-77. However, it is
unclear to what extent public policy in this context is distinct from the doctrine of public
policy in contract law. The Canadian conflict of laws conception of public policy appears
to be increasingly fixated upon morality, often to the detriment of other categories of
public policy (such as restraint of trade or prejudice to the administration of justice)