In general, most personal injury lawyers work by contingency fees. This means that they will receive a percentage of the money you win in the lawsuit to pay them for their hours spent on your case. Contingency fees usually only cover the hours put in by your legal team. You will also likely additionally pay, HST on the contingency fee payout and disbursements. At Equilibrium law we charge 30% plus HST and disbursements.
What are disbursements?
Disbursements are any out-of-pocket expenses for items or services needed to support your case that was paid by your lawyer. The following are some examples of disbursements:
- court filing fees
- medical record fees
- expert witnesses
- courier fees
- travel expenses
You will most likely need to pay disbursements even if you lose your case. However, if you win your case, it’s possible that on top of the money you are awarded the judge will order the other party to pay for your disbursements or legal expenses. Disbursements can be expensive and your lawyer must tell you of any major expenses in your case that may impact the settlement or award you will receive.
What must be included in a contingency fee agreement?
In Ontario, there is a “Standard Form Contingency Fee Agreement” that must be used by all lawyers practicing in Ontario who request payment by contingency fee.
Before signing a contingency fee agreement the form requires that you read the guide “Contingency Fee: What you need to know” offered by the law society of Ontario.
The agreement must include:
- Services you will and will not be provided
- Any conflicts of interest
- How you will pay for disbursements
- Your contingency fee and how they calculated it
- How you will receive your money
- Your right to ask for a review from the Superior court if you find the billing unreasonable
- What happens if you end the agreement before your case concludes
- No guarantee of sucess
3 types of contingency fee arrangements:
- Fixed contingency fee– the percentage you pay remains the same throughout the case
- Graduated contingency fee– the percentage you pay depends on what stage the case gets to. If the case is resolved at an early stage the percentage is lower.
- Partial contingency fee– you pay for some legal fees at the beginning and pay a contingency fee if you win or settle. The contingency fee will usually be lower in this case.
Pros and cons of contingency fees
| Pros | Cons |
| You do not need to pay the lawyer unless they win your case | If you get a big payout the lawyer may be getting paid more than the work, they put it |
| No upfront payments or fees | There may be additional expenses such as disbursement that are not covered by the contingency fee |
How do lawyers determine the percentage for a contingency fee?
There are a number of factors that help lawyers determine an appropriate percentage of the contingency fee. Here are some of the factors that may be considered:
- the likelihood of success
- the nature and complexity of the claim
- the expense and risk of pursuing it
- the amount of the expected recovery
- If you will receive an award for costs
Your lawyer will most likely address these factors with you before you sign the agreement. If they don’t ask them about their prediction for the above-mentioned factors.
What must a lawyer include in the billing statement?
- A clear breakdown of the award/settlement
- A breakdown of the disbursements, legal fees, and taxes that will be deducted
- The net amount you will receive
- How you will receive the money
- An explanation of the reasonableness of the contingency fee (time spent, complexity of the case, the results achieved, the risk taken)
- A blurb that lets you know that you can apply to the Superior court of Justice for an assessment of the bill
I think my lawyer ripped me off how do I get the bill reviewed?
If you feel a contingency agreement or the amount the lawyers charged you is unfair you can have an assessment officer review your bill. If an assessment officer decides that the payment is not fair, they will have the courts review it. I the courts find the payment unfair they can reduce the amount payable. Contact the Assessment Office to have your bill reviewed.
Can I fire my lawyer if I signed a contingency fee agreement?
Yes, you can end the agreement at any time. Lawyers can also end the agreement if, you lie to them, refuse to accept their advice, are unreasonable, or if acting for you places them in a conflict of interest. Regardless of who ends the agreement you may still owe the lawyer money for their time and expenses.