Law Times

Law Times • November 20, 2017 Page 5 www.lawtimesnews.com LSUC to consider changes to contingency fees BY ALEX ROBINSON Law Times A cap on contingency fees is currently off the table for the Law Soci- ety of Upper Canada. The provincial regulator re- leased a number of proposed changes to contingency fee rules in an attempt to make the fees more transparent, fair and reasonable, but a cap was not among the recommendations. The law society's Advertising and Fee Arrangements Issues working group had been look- ing at a possible cap on contin- gency fees, but it decided against it because of concerns it might deny some victims benefits and reduce claims in some cases. "The empirical evidence from the U.S., where caps have been introduced in several states, in- dicates that lawyers who rely on contingency fees often stop representing certain clients and handle fewer cases generally," said Bencher Malcolm Mercer, the chairman of the working group. "If it is no longer viable from a practical or business standpoint to advance certain types of claims, these cases end up fall- ing through the cracks, dispro- portionately impacting claims from lower-income groups and access to justice for the middle class." The law society started look- ing at the issue of contingency fees after concerns were raised that there had been noncompli- ance with the part of the Solici- tors Act that bars lawyers from taking fees from costs. Lawyers currently assign a value to the costs element of a settlement or award when they come in a lump sum, but as the Solicitors Act bars them from taking fees out of costs, lawyers' interests are better served by having small costs and higher compensation. This creates a conf lict be- tween their economic interests and those of their clients during settlement negotiation, lawyers say. Among the recommenda- tions is a proposal to ask pro- vincial government to make legislative changes to tackle this conf lict. The proposed changes to the Solicitors Act would make it so that "recovered legal costs may be included together with all other amounts recovered in the total amount based on which the contingency fee is calculated." Richard Halpern, a part- ner with Thomson Rogers who serves on an Ontario Bar As- sociation working group look- ing into the issue, says what the law society's working group has done is a very principled analysis of the issues with a focus on con- sumer protections and access to justice. He says the recommenda- tions mostly serve those priori- ties well, but a provision about the gross-up of partial indem- nity costs could be problematic. He says this is a little too re- strictive and not f lexible enough to deal with all the scenarios where a contingency fee agree- ment may not be sufficient to encourage a lawyer to take the case on. "The member has an option with a contingency fee agree- ment to either take the agree- ment or, in some cases, to take the indemnity cost award plus a gross-up for that amount," he says. "And I think that's problem- atic because it only deals with cases that are to be adjudicated and, as we know, most personal injury cases are not adjudicated." The recommendations also include introducing a manda- tory standard contingency fee agreement and a "know your rights" guide for the public. If approved, the new rules will also require lawyers to pro- vide clients with a clear break- down of the final settlement or award, net amount going to the client, disbursements costs, legal fees and taxes. Licensees will also be re- quired to publicly disclose the maximum contingency fee per- centage they charge by practice area. Claire Wilkinson, president of the Ontario Lawyers Trial As- sociation, said the organization is pleased with the recommen- dations. "We believe the recom- mendations, if implemented, will provide better consumer protection while still ensuring access to justice for those who cannot afford to hire lawyers on an hourly rate," she said in an email. In a news release, Wilkinson said the proposed measures are necessary to increase consumer protection and to help ensure consumer confidence in the le- gal profession. The changes would not apply to class action lawsuits, when cli- ents are "sophisticated entities" such as large companies or when the court has approved the con- tingency fee. The proposals are part of a larger initiative that has already brought new rules for referral fees and the way lawyers adver- tise their services. LT NEWS Claire Wilkinson says measures proposed by the Law Society of Upper Canada on contingency fees are necessary to increase consumer protection. Visit our new website to find the latest in Ontario legal news, opinion, videos and expert commentary. Find the legal content you're looking for faster with enhanced navigation. A FRESH NEW LOOK www.lawtimesnews.com Join our 55,000 monthly visitors and read respected content on any device. Untitled-5 1 2017-11-13 1:45 PM Professor Bahdi has advocated for human rights in the classroom, the courtroom, and the community, both in Canada and internationally. She is a distinguished leader in advancing human rights and access to justice for Arabs and Muslims within Canada. The Guthrie Award was created in honour of past Foundation Chair, H. Donald Guthrie and is given to individuals who have a significant track record of furthering access to justice. Through granting and collaboration, The Law Foundation of Ontario invests in knowledge and services that help people understand the law and use it to improve their lives. www.lawfoundation.on.ca We are pleased to present the 2017 Guthrie Award to Professor Reem Bahdi FO_LT_Nov20_17.indd 1 2017-11-14 1:13 PM www.twitter.com/lawtimes Follow on

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