Law Society’s governing body approves plans to regulate contingency fees for better public access and protection

Toronto - December 1, 2017: The Law Society's governing body today approved overwhelmingly a report with several recommendations to protect access to justice for the public, while ensuring protection from unscrupulous practices and unreasonable fees.

Introduced in Ontario over a decade ago, contingency fees provide members of the public with access to justice by allowing clients not to pay legal fees until a settlement or trial results in damages recovery. The lawyer or paralegal usually receives a fee calculated as a percentage of what is recovered.

“The existence of contingency fees is critical in opening the doors to justice for all Ontarians, no matter your financial situation,” says Malcolm Mercer, Chair of the Law Society's Advertising and Fee Arrangements Issues Working Group. “The recommendations transform the way contingency fees work, providing equal access to justice for all individuals, regardless of their ability to pay, while increasing clarity and visibility, and consumer protection.”

The recommendations were developed by the Law Society's Advertising and Fee Arrangements Issues Working Group and are designed to regulate contingency fees to facilitate legal representation at a fair and reasonable cost.

They include:

  • The introduction of a mandatory standard contingency fee agreement;
  • A 'Know Your Rights' guide for the public;
  • Disclosure requirements on completion of an agreement;
  • Requirement for legal professionals to publically disclose the maximum contingency fee percentage they charge by practice area; and
  • New reporting information required on licensees' (lawyers and paralegals) annual reports to the Law Society.

“The access to justice benefits of contingency fees are well recognized,” says Mercer.

“For personal plight cases, such as motor vehicle accident cases, the contingency fee arrangement provides an option that assists particularly vulnerable clients who otherwise may be deprived of their ability to advance their claims.”  

Contingency Fee Caps  

The Law Society examined the idea of capping contingency fees, but found that doing so was not in the public interest as caps would likely pose a barrier to accessing legal services.  

“When looking at the issue of caps, we were concerned that the unintended consequence would deny some victims benefits and reduce claims in more modest cases,” says Mercer.  

The recommendations on contingency fees build upon the Law Society's changes to referral fees and advertising rules, which came into effect earlier this year. These measures, along with the strengthening of the rules governing the advertising of legal services, increase transparency for the consumer and add additional new public protection measures.  

More information, including a summary of the report is available online.  

The Law Society regulateslawyers and paralegals in Ontario in the public interest. The Law Society has a mandate to protect the public interest, to maintain and advance the cause of justice and the rule of law, to facilitate access to justice for the people of Ontario and act in a timely, open and efficient manner.    

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Media Contact:

Alastair Harris-Cartwright, Manager, Media Relations and Communications, Law Society of Upper Canada - 416-947-3336, aharris@lsuc.on.ca

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