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WHAT ARE CONTINGENCY FEES?
NO PAY UNTIL YOU WIN OR COLLECT FEE OFFERS
Contingency fees are not permitted in criminal and family law matters, however ask your lawyer as rules change.
WHAT ARE CONTINGENCY FEES?
- generally mean you do not pay anything up front until you win you case. Be sure the agreement says you do not pay until you actually collect. You can easily win a case, but never be able to collect a penny from the losing side
- Your lawyer's fee depends on the outcome of a case.
- Know that most contingency agreements are made because the lawyer is confident the case will settle and never need to go to a full blown trial. Many agreements terminate if and when the matter goes to trial.
- Insurance companies used to settle and pay go away money. Most refuse to do that anymore.
- Here are the basics on contingency fees which you need to know:
- If you win the case, your pay your lawyer a percentage or other agreed-upon portion of the settlement. You may also pay certain expenses.
- If you lose, you do not pay - your lawyer accepts the risk of not being paid when taking a case on a contingent basis.
- Contingency fees can prevent prohibitive upfront costs and allow for greater access to justice, particularly for middle class individuals who cannot afford a lawyer and do not qualify for legal aid.
Contingency Fee Rules
- Generally these rules apply across Canada. Check for variations in your area.
- Sets a maximum percentage that can be charged as a contingency fee
- Require all contingency fee agreements to be made in writing
- Prohibit contingency fees in criminal, quasi-criminal and family law matters
- Prevent lawyers from collecting both the contingency fee and legal costs, unless approved by a judge
- Allows clients to collect full payment for an award of costs, even if it exceeds the amount payable under a contingency fee agreement, but only if the award is used to pay the client's solicitor
- Allows the courts to review contingency fee contracts and to endorse negotiated fees above the prescribed standards where it is fair to do so.
CONTINGENCY FEE ARRANGEMENTS
- Most Law Societies in Canada permit lawyers to enter into contingency agreements with clients.
- Contingency fees are not permitted in criminal and family law matters
- In determining the percentage or amount of the contingency fees, the rule states that the lawyer and the client in each case should consider a number of factors, including
- the likelihood of success
- the nature and complexity of a client's claim
- the expense and risk of pursuing it
- whether the lawyer or client is to receive an award of costs.
- Any agreement should be in writing and contain a simple example of how the fee is to be calculated
- Contingency fee arrangements:
- What are they and what do they mean to you?
- Clients are able to enter into contingency fee arrangements with their lawyers.
- What does this mean? It means that some clients who in the past could not afford to pursue certain claims may now be able to do so.
- Clients also have the right to apply to the Superior Court of Justice to determine whether a particular contingent fee is fair and reasonable.
WARNING: Law Societies exist to protect lawyers from clients not to protect you from lawyers. They are, in effect, unions
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