What are they and what do they mean to you?

Contingency fee arrangements allow lawyers and their clients to agree that the lawyer will be paid only in the event of success.

Contingency fees are permitted in every province in Canada.

What Are Contingency Fees?

Contingency fee arrangements tie a lawyer's fee to the outcome of a case.

If the client wins the case, the client pays his or her lawyer a percentage or other agreed-upon portion of the settlement.

If a client loses, the client doesn't pay - the lawyer accepts the risk of not being paid when taking a case on a contingent basis. Such arrangements need to be discussed between you and your lawyer.

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.

Use of Contingency Fee Arrangements

Most Law Societies across Canada permit lawyers to enter into contingency agreements with their clients.

In determining the percentage or amount of the contingency fees, the rule states that the lawyer and the client in each case should consider a number of factors, including

• the likelihood of success
• the nature and complexity of a client's claim
• the expense and risk of pursuing it
• whether the lawyer or client is to receive an award of costs.
• Any agreement should be in writing and contain a simple example of how the fee is to be calculated

Generally the Contingency Fee Rules in Canada:

• Require all contingency fee agreements to be made in writing;
• Prohibit contingency fees in criminal, quasi-criminal and family law matters;
• Precludes lawyers from collecting both the pre-determined contingency fee and legal costs, unless approved by a judge;
• Allows client to collect full payment for an award of costs, even if it exceeds the amount payable under a contingency fee agreement, if the award is used to pay the client's solicitor;
• Prescribes a maximum percentage that can be charged as a contingency fee; and
• Allows the courts to review contingency fee contracts and to endorse negotiated fees above the prescribed standards where it is fair to do so.