You Don’t Pay Legal Fees Unless We Win – Is It True?

If you have been involved in a personal injury accident, you may have taken some time to research your options for compensation. You will want to hire an experienced lawyer to represent you, but also do so in a way you can afford. You may be concerned about how much the lawyer’s fees and expenses will be, especially if your case is unsuccessful, and if you need to put forth a retainer fee when signing a representation agreement with a lawyer.

Fortunately, personal injury claims typically operate on a different billing basis than some other types of legal issues, such as family and criminal law, where contingency fees are not permitted. More specifically, your civil claim may be eligible for a contingency fee arrangement as an alternative to an hourly fee or fixed fee for work done. Familiarizing yourself with the concepts of “no win, no fee” arrangements can help you choose the path which best fits your needs. 

What Are Contingency Fees?

Contingency fees are the legal fees for your legal representation which depend on a favourable outcome in your case. So, yes, it is true that you can have an arrangement where you don’t pay your lawyer’s fees unless they win. A favourable outcome may be an out of court settlement or damages awarded following a court proceeding. If the case is successful, your legal fees would come out of the amount you receive for damages. If the case is not successful, you will not be responsible for your own lawyer’s legal fees; you would only be responsible for your own disbursements, the reimbursable disbursements of the opposing party, and for costs awarded by the court for the opposing party’s legal fees.

Historically, contingency fee arrangements were discouraged, as many people thought it would encourage the pursuit of frivolous cases. However, injured victims and legal professionals alike now see contingency fee arrangements as a way for people to get access to legal representation in cases where an up-front fee may have been prohibitive. It is because the access to justice component of contingency fees are well recognized that the Law Society of Ontario recently decided against introducing caps. Doing so, could make it too expensive for law firms to take on very serious cases (e.g., where there are catastrophic injuries) which have high carrying fees.

When setting a contingency fee percentage, a lawyer will take into account several factors, in accordance with the Solicitors Act, including:

  • The likelihood of success 
  • Complexity of the claim 
  • Nature of the claim 
  • Expense and risk of pursuing the claim 
  • Amount of expected recovery 
  • Award of costs 
  • Amount of costs

In fall 2017, contingency fee reforms were recommended by the Advertising and Fee Arrangements Issues Working Group of the Law Society of Upper Canada (now the Law Society of Ontario). These recommendations became proposed amendments to the Solicitor’s Act in group’s 2018 Contingency Fee Reforms Consultation Document, which were approved by the Convocation in principle. Some of the recommendations include the creation of a Standard Form Contingency Fee Retainer Agreement, a “Know Your Rights” guide for the public, a requirement for lawyers to disclose the maximum contingency fee percentage for each of their practice areas, and a document outlining a specific breakdown of the amount which will be awarded to the client, amounts going to disbursements costs, legal fees, and taxes. Additionally, lawyers are also required to inform their client that this breakdown may be reviewed by a third party. These measures are designed to keep contingency fee arrangements fair and transparent.

What Is a Disbursement?

Disbursement costs are charges for non-legal matters for which there is an upfront cost. Clients are usually expected to be responsible for these costs at the close of a case. Examples of disbursement costs include filing fees, document production fees, or other “out-of-pocket” expenses that may be incurred during the course of your claim, including medical legal reports to document the injuries incurred.

How Are Costs Handled?

At the close of a civil claim, the issue of “costs” is usually handled by the judge. “Costs” are an amount paid by the losing party to address the expenses associated with legal representation. This amount is awarded in addition to damages recovered. Usually costs awarded cover about half of the legal bill. This issue can seem somewhat complex when coupled with contingency fee agreements. The law precludes lawyers from collecting both a contingency fee and costs, unless approved by a judge. The court also has the ability to review agreements concerning costs.

What Are My Options?

If you have a personal injury or civil claim, you may be eligible for a contingency fee arrangement. This is a good option if your case is particularly strong, or if you may have difficulties paying upfront fees. For this reason, contingency fees are considered a measure which helps grant access to justice for those who wouldn’t normally be able to pursue legal actions.

Usually, a personal injury lawyer will offer a free consultation, during which s/he will assess your eligibility for a contingency fee arrangement. This consultation also gives you an opportunity to find out if you are comfortable working with the lawyer. If you are interested, the lawyer will be able to outline his/her billing process and discuss projected fees.

Alternatively, your lawyer may structure the billing on a more traditional system. Usually this means that the lawyer will require a retainer and will bill hourly. Keep in mind that a retainer can have two meanings. First, a retainer fee is an amount of money, similar to an allowance, which the lawyer can draw on to fund expenses throughout the case and secure his/her services. By contrast, a retainer agreement is a contract between the client and lawyer which outlines the terms of their agreement. This document outlines the basis of the solicitor-client relationship, and will include items such as:

  • The lawyer’s authority to act 
  • The lawyer’s hourly fee
  • What happens to the retainer if the relationship between the lawyer and client is terminated 
  • Potential interest charges 
  • Services of other legal professionals (paralegals, employees of the lawyer)

This traditional arrangement is good if your matter is particularly complex or if your lawyer will not offer a contingency fee arrangement for the case.

Obtain Your Free Personal Injury Consultation at Tamming Law, Lawyers in Owen Sound

If you are wondering if you should get a lawyer, contact our law firm in Owen Sound at 1-888-945-5783. At Tamming Law, we offer personal injury claim representation for a lawsuit on a contingency fee basis. If you had a motor vehicle accident, we can also provide legal services assistance with accident benefits claim forms. We can assess your needs at your free consultation. Located in Owen Sound, our lawyers are experienced with a wide variety of personal injury claims.

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