Ontario sets down lawyers’ fee rules

One lawyer who asked not to be identified, however, said contingency fees are a regrettable way to broaden access to justice…He also said he is unaware of any studies that confirm that contingency fee arrangements improve overall access to the justice system.

The Globe and Mail
July 19, 2004

Ontario sets down lawyers’ fee rules
No cap on contingency work
Beppi Crosariol

The Ontario government has released its rules for how contingency fee arrangements are to be made between lawyers and their clients.

Key components of the new regulatory scheme, which comes into effect Oct. 1 as part of amendments to the Solicitors Act, include a prohibition on contingency fees in criminal, quasi-criminal and family law cases; protection for minors and "incapable" adults whose arrangements are worked out by guardians; and a requirement that agreements be made in writing.

Contingency fees enable a client to pay a lawyer only in the event of success in cases that involve the possibility of a financial award.

If the plaintiff prevails, the lawyer earns a percentage of any money that is recovered, according to a prearranged contract. If the lawyer loses, the client pays only the lawyer's out-of-pocket expenses, such as fees to cover the cost of expert witnesses.

Ontario became the last jurisdiction in Canada to allow contingency fees after a 2002 appeal court ruling made them legal, but until now there have been no rules governing how they should work.

A key question on the minds of many lawyers was whether the government would set a maximum percentage that could be charged by counsel. It did not.

"Any set percentage would be an arbitrary number that wouldn't protect the client and may have no rational connection to work done by the lawyer," said Valerie Hopper, spokeswoman for the Ministry of the Attorney-General.

"There's also concern that the maximum percentage, or cap, would just kind of become the norm, and by not setting a cap, it's allowing lawyers and their clients greater flexibility in writing the terms of their agreements."

Ms. Hopper added that any fee set by a lawyer can be challenged by the clients and would be subject to a fairness review by a court or assessment officer.

British Columbia is the only Canadian jurisdiction that has established maximum percentages — 331/3 per cent for personal injury or wrongful death in cases involving motor-vehicle accidents and 40 per cent for other personal injury or wrongful death cases.

Malcolm Heins, chief executive officer of the Law Society of Upper Canada, says the vast majority of lawyers in the province support contingency fees and that there is broad support for the new regulatory scheme.

"This will really promote access to justice on the part of the public."

One lawyer who asked not to be identified, however, said contingency fees are a regrettable way to broaden access to justice.

He said a better approach would be to increase the chronically underfunded legal aid system that remunerates lawyers who take on low-income clients.

He also said he is unaware of any studies that confirm that contingency fee arrangements improve overall access to the justice system.


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