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Three Canadian law firms that banded together are launching an ad campaign that they hope will counter the stereotypical image of personal injury lawyers as hard-selling ambulance chasers. (Rob Friedman/iStock)
Three Canadian law firms that banded together are launching an ad campaign that they hope will counter the stereotypical image of personal injury lawyers as hard-selling ambulance chasers. (Rob Friedman/iStock)

Law PERSONAL INJURY

Case offers window into widespread referral fee use Add to ...

Jeremy Diamond uses widespread advertising and local media appearances to raise his profile in the competitive field of personal injury law – there is “nothing tougher than a diamond” is the slogan for the firm Diamond & Diamond – yet court documents suggest he is not fighting cases personally.

In testimony related to a recent action launched in Ontario Superior Court, Jeremy Diamond outlined a very different role from his public image as a lawyer battling for accident victims. He testified that he was an “independent contractor” at Diamond & Diamond, who received $700 from his uncle David Diamond for every potential client who was then successfully referred to the firm of Bergmanis Preyra.

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Allegations that Jeremy Diamond has been referring clients elsewhere is at the heart of a recent legal action by Bergmanis Preyra: They offer a window into the widespread use of referral fees in personal injury litigation, a practice that is entirely legal in Ontario.

Bergmanis Preyra is alleging that Diamond & Diamond breached a contract signed in 2007. The agreement required the firm to refer all potential personal injury clients to Bergmanis Preyra in exchange for 30 per cent of its final fees.

The two firms have long had close ties and Diamond & Diamond sublets space from Bergmanis Preyra in an office building in the Lawrence Square mall, according to information in court documents obtained by The Globe and Mail and Law Times.

Lawyers at Bergmanis Preyra began to suspect something was amiss when Diamond & Diamond raised its profile through advertising, and there was not a corresponding increase in clients, alleges Kurt Bergmanis in a sworn affidavit. To test its suspicions, the firm recruited two friends to pose as potential clients with Jeremy Diamond. They were later contacted by a lawyer at another firm, the court documents state.

In September, a Superior Court judge granted an ex parte order that permitted Bergmanis Preyra to seize copies of documents from Jeremy Diamond’s office computer, that were then turned over to an independent lawyer.

The decision was thrown out by another judge last month, after Jeremy Diamond retained the Toronto firm of Paliare Roland. The evidence before Justice Paul Perell included a private cross-examination of Jeremy Diamond, with lawyers for both sides present. While he is the face of its advertising and one of the two lawyers (David Diamond is the other) seen on its website, it was during this cross-examination that Jeremy Diamond said he was an independent contractor, with no ownership stake or employment contract with the firm.

“Were you practising law in your relationship with Diamond & Diamond?” asked Alan Rachlin, lawyer for Bergmanis Preyra.

“That can – I mean I’m – I don’t really understand that question,” replied Mr. Diamond.

Justice Perell ordered the documents returned to Jeremy Diamond, because he is a “non-party” to the contract between the two law firms. Last week, another Superior Court judge refused to grant an injunction pending an appeal and instructed that the documents be given to Linda Rothstein, lead lawyer for Mr. Diamond. The judge also ordered Bergmanis Preyra to pay nearly $14,000 in legal costs to the other side.

Mr. Diamond is on a “leave of absence” from Diamond & Diamond, said Ms. Rothstein, who declined further comment as a result of the “ongoing litigation.”

David Diamond declined to comment about the allegations against his nephew. But he stressed that his firm remains on good terms with Bergmanis Preyra. As well, the website disclaimer that explains that Diamond & Diamond is “primarily a referral source” has been approved by the Law Society of Upper Canada, he said.

 

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