What Are Contingency Fees?
Understanding Contingency Fees
Understanding Contingency Fees
If you’ve ever researched personal injury law firms, you’re probably familiar with the term ‘contingency fees.’ Sometimes referred to as ‘no win, no fee’ arrangements or ‘speculative fees,’ contingency fees allow experienced personal injury lawyers to accept clients without being paid at the start of the case.
Such arrangements were illegal in Canada until 2004. They were traditionally banned in most of the United Kingdom and remain banned in the New South Wales province of Australia. Critics suggest that contingency fees encourage lawsuits and give lawyers too much financial interest in the outcome of their clients’ cases.
However, most experienced personal injury lawyers see contingency fees as a way to ensure access to justice for Canadians who might not otherwise be able to afford legal services. Through contingency fees, injury victims dealing with complex physical, emotional, and financial challenges can hire top-tier legal representation to ensure their interests are represented in the Canadian legal system.
How Do Contingency Fees Work?
When a lawyer is hired on a contingency basis, they will agree to accept a percentage of the plaintiff’s settlement as payment. If the lawyer is unable to secure compensation for the client, they will not receive payment.
The percentage of the settlement that the lawyer is entitled to depends on the case’s unique circumstances. The Law Society of Ontario (LSO) urges lawyers to consider a number of factors in determining an appropriate percentage, including:
– The likelihood of success
– The nature and complexity of the claim
– The expense and risk of pursuing the claim
– The amount of the expected recovery
– Who is to receive an award of costs
– The amount of costs awarded
The LSO stipulates that lawyers should not receive more from the settlement than the plaintiff, so the absolute maximum percentage a lawyer can charge is 50 per cent of recovered damages.
What Type of Lawyers Offer Contingency Fees?
Contingency fees are most common in personal injury claims, particularly those involved motor vehicle accidents and insurance disputes. Employment law is another common area. Per the LSO, “neither lawyers nor paralegals may use contingency arrangements in criminal or quasi-criminal matters and lawyers are further prohibited from acting on contingency in family law matters.”
For more information about contingency fees, contact one of the experienced personal injury lawyers listed in our comprehensive legal directory. If you are in need of legal representation, ExperiencedLawyers.ca is the best possible place to initiate your search for competent Canadian lawyer.