QUESTIONS TO ASK WHEN YOU ARE COMPARING CONTINGENCY FEES
(Note: applies to all Contingency Fee Agreements (“CFAs”) signed on or after July 1, 2021 in accordance with the changes to the Solicitors Act as of July 1, 2021)
Contingency fee basis means you only pay legal fees if you receive money by (1) winning your case or (2) a negotiated settlement. Please refer to each lawyer’s profile for details with regard to their maximum contingency fee rates.
Our team of personal injury lawyers bring a variety and breadth of experience in a wide range of personal injury claims. Each lawyer’s biography is on our website; however, the lawyer you consult with will provide you with more particular details of her or his experience with cases like yours.
WHAT THE AGREEMENT COVERS
As each case and each client is unique, and brings a unique set of facts and circumstances, the scope of the retainer should be discussed at length with your lawyer, to ensure you have covered all potential claims, or to determine what will be included in the contingency fee agreement and what services will not be included.
CALCULATING THE CONTINGENCY FEE
The maximum contingency fee that will be charged in specific types of cases is posted on each personal injury lawyer’s bio page on our website. In some cases, the amount may be lower than the maximum posted rate. It is important to discuss the rate with the lawyer with whom you consult.
There are a number of factors involved in determining the appropriate percentage for a contingency fee in any given case, such as:
- How much time the lawyer anticipates the case will take;
- How much risk there is that your case might not be successful;
- How much your case might be worth.
In all cases, the fee must be fair and reasonable.
Every case is different and there are many factors which can impact the time it takes to resolve a claim. When dealing with injuries, it takes time for injuries to heal and for a medical prognosis to be obtained. Settling too soon in some cases may mean we do not know your long term prognosis, and therefore it is not recommended.
Other factors may include how complex the liability (fault) is; whether there are multiple parties; whether there are uninsured or unidentified parties, etc. Your lawyer can better guide you on this based on the particular circumstances in your case. There are circumstances where the percentage may be lower, if your case is able to be resolved in the earlier stages. You can discuss this with the lawyer during your consultation.
We will typically cover the cost of your disbursements as we pursue your claim. In many cases, if your claim reaches a successful resolution, the defendant will pay for the majority of your disbursements, which will reimburse us. In some claims, such as accident benefits claims, the insurer may pay for some medical records, but will unlikely pay for other disbursements such as your own expert reports. In situations where the disbursements are not reimbursed by a defendant or insurer, but you have achieved a successful outcome, you may be responsible for paying for the disbursements out of the settlement funds.
In some situations, such as medical malpractice, we must do investigation at the outset in order to determine whether there is a basis for a claim. We may, therefore, ask for a retainer to cover the cost of the disbursements incurred as part of that investigation, such as obtaining medical records and obtaining the initial opinion of a medical expert on the standard of care and causation involved in your case.
Disbursements can include expenses approved by a court or tribunal, or authorized by a regulation known as “Tariff A,” even if these expenses relate to the costs of providing legal services.
Examples of disbursements that can be validly charged to you include:
• court filing fees
• hiring court reporters
• costs of transcripts
• paying for expert witnesses, such as medical experts
• cost of copies of documents prepared for the use of the judge (allowed by Tariff A).
This will depend upon your particular situation. If we are covering the disbursements throughout your claim, you will reimburse us out of your settlement at the end of the claim. If we have asked for a retainer up front to offset some initial disbursements, we will provide interim accounts to you as disbursements are incurred.
Typically, the fee would not be lowered if you pay the disbursements throughout the course of your case, but this is something that can be discussed during your consultation.
Each case brings with it a unique set of facts and circumstances which can impact the disbursements. For example, a complex liability case may require the services of an accident reconstruction engineer, which can be quite costly. Certain cases can be settled without the need of medical and other expert reports, but many cannot. The types of experts needed can impact the overall disbursements.
One of the benefits to having a contingency fee agreement is that you can choose the option that allows for disbursements to be paid out of any settlement or judgment. This means that you are not “out of pocket” for any disbursements incurred as your case progresses. If you have chosen the option to pay disbursements yourself, then you will need to discuss with the lawyer about options available to you if you are suddenly unable to continue to fund the disbursements.
In legal proceedings, “costs” are the money that a court or tribunal may order the person who loses the case to pay to the person who wins the case (or a stage in the case). Costs can also be included as part of a settlement. In most cases, these awarded costs pay only a part of a person’s legal expenses.
An award of costs, however, can be impacted by various factors throughout the course of the litigation, such as Rule 49 offers, steps taken that expedite or delay the litigation, etc.
In other types of claims, such as accident benefits claims or CPP or WSIB disputes, there is no mechanism for costs to be paid or awarded.
If you lose your case, you may have to pay costs to the successful party. Having a contingency agreement does not protect you from having to pay costs to the other side. You should talk with your lawyer about the risks involved in your case. There are a variety of factors that may apply to impact this.
As well, you may wish to consider purchasing ‘After the Event’ insurance or adverse costs insurance. Your lawyer can provide you with options and discuss the implications of this.
In cases such as accident benefits claims or CPP appeals, there is no risk of an adverse cost award.
There are many factors which can impact an award of adverse costs, such as offers to settle made before trial; the reasonable expectation of the parties; proportionality of costs to the amounts sought in the litigation; the procedure in which your claim was commenced, etc. These are just some examples. Your lawyer can advise you of the specific factors that may impact any adverse costs award against you.
MOTOR VEHICLE ACCIDENT CASES
If you were injured in a motor vehicle accident, you may be entitled to sue for your pain and suffering (also known as ‘general damages’). If the general damages in the award or settlement are under a certain amount, a ‘deductible’ may apply – reducing how much of the award or settlement is paid by the other side’s insurance company. This deductible is ´statutory,´ meaning that it is set by insurance legislation.
Before signing an agreement, ask your lawyer if these insurance rules could apply to you to reduce how much you are able to recover.
Typically, when you are presented with an offer of settlement, the other side has already taken into account the applicable deductible and will offer a net amount to you. That means they have already subtracted the deductible, and the amount they are offering to you is what they are willing to pay. If your case were to go to trial, the judgment would also have the deductible applied, and you would be advised as to what your net amount is after the deductible has been subtracted from the jury award or judgment.
MY SETTLEMENT OR AWARD
Money that has been awarded by the court or negotiated in a settlement will usually be paid to your lawyer. It will be held in trust for you. Once the account is prepared, then you will either receive a cheque for your portion of the settlement funds or a wire transfer from the law firm, if that is preferred.
Before you are given the money, your lawyer will prepare an account statement showing what they will deduct for fees, disbursements and applicable taxes in accordance with your contingency fee agreement. The account statement must clearly set out:’
- The amount of the settlement or award
- The amount of the contingency fee and amounts for any other legal services that they will deduct, plus HST
- The amount of all outstanding disbursements they will deduct, plus any applicable taxes
- The net amount of money that you will receive after the deductions
- The way you will receive the money.
The account statement should clearly explain why the fees and deductions are reasonable, and what you can do if you feel that they are not reasonable.
In some cases, such as those that go before the Workplace Safety and Insurance Board, benefits may be paid directly to you. You would then be responsible for paying your lawyer directly.
Contingency fee basis means you only pay legal fees if you receive money by 1.) winning your case or 2.) a negotiated settlement. Note: Each lawyer profile details their maximum contingency fee rates.
If you are a party under disability represented by a litigation guardian, a judge must approve the agreement. This approval must happen either before the agreement is finalized or as part of the court’s approval of a settlement agreement or a consent judgment. When the court reviews a settlement agreement or a consent judgment, the court must also approve the legal fees, costs, taxes and disbursements.
Once there is a settlement or award, you typically receive your settlement funds within a month once all of the paperwork is processed. The actual length of time to receive a settlement or judgment can easily take 2-4 years and in more complicated matters, it may take even longer.
For more information, download a copy of the Contingency Fee Consumer Guide.