Changes to contingency fee agreements boost consumer protection

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A few months ago, the Law Society of Ontario (LSO) passed new contingency fee rules to improve transparency and fairness for clients. Standardizing contingency fee agreements will also make it easier for accident victims to compare personal injury lawyers.

With a contingency agreement, you only pay legal fees if you receive money through a negotiated settlement or win your court case. Of course, you still have the option to pay an hourly or flat rate, but that’s not always feasible — especially if you’re injured as a result of your accident and are unable to work.

Although contingency fees allow for increased access to justice, not all firms were calculating or communicating their fees in the same way. This made it difficult for accident victims to compare lawyers. The changes made by the LSO now require lawyers and paralegals to provide potential clients with an informative guide following a consultation. You can read it here: Contingency fees: What you need to know.

The 15-page, plain-language booklet contains everything you need to know about contingency fees and also explains other legal expenses besides your lawyer’s fee, including:

  • Disbursements — expenses related to your claim like court filing fees or paying for medical assessments and reports
  • Costs — money you may be ordered to pay the other party if you lose
  • Harmonized Sales Tax

There are detailed bill breakdowns of hypothetical situations where a client receives a negotiated settlement or court award. By providing real-world examples and common scenarios, it’s now easier to understand how your lawyer will tally the final bill and how much money you get to keep.

You enter into a contingency fee agreement once you have decided which personal injury lawyer you would like to work with. The agreement or retainer is a contract, and it should outline:

  • What services are covered and which are not
  • How disbursements (items and services from third parties) will be paid
  • How the contingency fee will be calculated
  • How and when you will receive your settlement or award
  • What happens if you end the agreement before your case concludes

Although many personal injury lawyers were already using excellent and easy-to-understand agreements, having standardized retainers across the board should avoid confusion and allow for an apples-to-apples comparison.

Meeting with a personal injury lawyer and pursuing a claim might be your first experience with the justice system. If you’re struggling with injuries from your accident and dealing with a loss of income, it’s easy to become overwhelmed with the litigation process.

By dropping the legal jargon and clearly defining terms and concepts, personal injury victims and their lawyers can better manage their expectations. A standard contingency agreement should also give you a clear picture of how much money will go into your bank account once your claim is settled.

Larry Herscu is the president of The Easy Legal Group of Companies, a Private Credit Manager. Its lending solutions service the legal sector, including its clients and the service providers involved in their cases. The firm is registered to conduct business in Ontario, B.C., Alberta and the Atlantic provinces.

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