Contingent Fee Agreements (continued)

Restrictions

A contingent fee agreement must be in writing and must contain certain information. Be aware of the requirements of the Law Society Act, 1996 (sections 82-83), as well as the Contingent Fee Rules, such as:
  • Contingent fee agreements allow for a maximum charge of 25% of the total amount recovered, unless the approval of a reviewing officer has been obtained. In the event the matter is appealed to a higher court, the maximum that you may charge is 30%.
  • A contingent agreement that is not in Form 1 is void unless it was approved by a reviewing officer and is not inconsistent with the provisions of the Law Society Act, 1996Also see subsections 3(1) and 3(2) of the Contingent Fee Rules.
  • If the lawyer and the client agree to a contingent fee amount that is higher than the maximum amount permitted under the Contingent Fee Rules, the lawyer must apply to the designated reviewing officer to have the agreement approved prior to entering into the agreement. The reviewing officer has the discretion to approve the higher fee if he or she is satisfied that the lawyer and client have agreed to the proposed fee and that the proposed fee is fair and reasonable (Contingent Fee Rules – subsection 2(3)).
  • If a contingent agreement is rendered void because it exceeds the limits allowed by the Contingent Fee Rules, a lawyer is entitled to charge the fees that could have been charged had there been no contingent fee agreement, but only on the successful disposition of the matter in respect of which the services are provided (Law Society Act, 1996, subsection 83(3)).  The lawyer should have records that show the amount of time spent on the file.
  • A contingent fee agreement for services related to child custody or access, to a matrimonial dispute, or to a criminal or quasi-criminal case is void unless approved by the Court. (Law Society Act, 1996, subsection 83(5)).
  • Within ninety days after the agreement is made or the retainer between the member and the client is terminated, a person who enters into a contingent fee agreement with a member may apply to a reviewing officer to have the agreement reviewed even if the person has made payment to the member under the agreement (Law Society Act, 1996 subsection 83(7)).  The reviewing officer may modify or cancel the agreement if he or she is of the opinion that the agreement is unfair or unreasonable under the circumstances existing at the time the agreement was entered into.