Contingency Fees: Read This Before You Hire a Lawyer
ABOUT THOSE NO PAY UNTIL YOU WIN OR COLLECT FEE OFFERS
Basically, no lawyer will accept a no pay until you win offer unless they are certain the insurance company will settle the matter out of court. If a lawyer offers you a no win no pay, contingency fee of a large(33%+) percent of the money the insurance company will pay, you can probably negotiate the percent she asks for and get a much better rate.
In the case of a personal injury claim, insurance companies will usually settle if they can avoid a trial which they will probably lose. Lawyers know this so they can offer you no win no pay deals because they know they will win your case without having to go to trial. They know the insurance company will settle, and the only question is how much they will pay to settle your claim.
Lawyers will seek a large percentage of the award they get for you, 33% or more is not unusual. That is a pretty nice pay cheque for making a few phone calls. Make sure your agreement is based on no win no pay and payment is based on your lawyer actually collecting the cash award for you.
WHAT ARE CONTINGENCY FEES?
What does it mean for a lawyer
to work on contingency?
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. Pro bono does not apply here.
What do most lawyers charge for a contingency fee? Contingency fees are tied to the success or failure of your lawsuit or other transaction. If your lawyer is successful in winning your claim or negotiating a business deal, he or she receives a fee calculated as a percentage of what you are awarded in a court ruling or the value of what you gain in a deal.
Contingency Fee Rules
A contingency fee is simply paying your lawyer an amount based on a percentage of the money your lawyer recovers for you, for your claim..
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.
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