Contingency fee arrangements allow lawyers and their clients to agree that the lawyer will be paid only in the event of success.
Contingency fees are permitted in every province in Canada.
What Are Contingency Fees?
Contingency fee arrangements tie a lawyer's fee to the outcome of a case.
If the client wins the case, the client pays his or her lawyer a percentage or other agreed-upon portion of the settlement.
If a client loses, the client doesn't pay - the lawyer accepts the risk of not being paid when taking a case on a contingent basis. Such arrangements need to be discussed between you and your lawyer.
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.
Use of Contingency Fee Arrangements
Most Law Societies across Canada permit lawyers to enter into contingency agreements with their clients.
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
Generally the Contingency Fee Rules in Canada:
Require all contingency fee agreements to be made in writing;
Prohibit contingency fees in criminal, quasi-criminal and family law matters;
Precludes lawyers from collecting both the pre-determined contingency fee and legal costs, unless approved by a judge;
Allows client to collect full payment for an award of costs, even if it exceeds the amount payable under a contingency fee agreement, if the award is used to pay the client's solicitor;
Prescribes a maximum percentage that can be charged as a contingency fee; and
Allows the courts to review contingency fee contracts and to endorse negotiated fees above the prescribed standards where it is fair to do so.
Lawyers by Province
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.
Contingency fees are not permitted in criminal and family law matters.
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