Contingency Fee Agreements

I have often seen a comparison between personal injury lawyers and real estate agents because of the way that they bill their clients.

Both realtors and personal injury lawyers take on files on a contingency fee basis. That means that they only get paid, unless there is an element of success (financial recovery) in the case. It has never made sense to me that personal injury lawyers and real estate agents are both paid on a contingency fee basis when the deals, the circumstances of the clients, and degree of difficult are so different when comparing the two industries.

Personal injury lawyers don’t need to take cases on a contingency fee basis. But, in the overwhelming majority of cases, we need to do so because our clients can’t afford to pay the high cost associated with modern day litigation. Even the most modest hourly rates are expensive. Even Court filing fees being charged by the Ministry of the Attorney General are expensive. The Court filing fee for a Statement of Claim is $243, which does not cover the cost of serving it which will tack on an extra few hundred dollars. The cost of filing a trial record with the Court is a staggering $859. On Court filing fees alone for a Statement of Claim and for filing a trial record, without taking into consideration any costs for a lawyer’s time, or the cost of a process server to get these documents served, an innocent accident victim has to pay to the Court a whopping $1,102! How on earth would a person who is too injured to work from their accident be able to afford that, let alone a lawyer’s time in preparing these documents or fighting the case on its merits.

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The National Post recently ran an article which highlighted a study financially backed by the Insurance Bureau of Canada (IBC) called “A Study of the Costs of Legal Services in Personal Injury Litigation in Ontario“. In case you didn’t know, the IBC is the industry or lobby group which represents the interests of large insurance companies. They are the ones who donate to political parties and influence the way the laws are shaped such that they sway in favour of large, deep pocketed insurers, rather than in favour of innocent accident victims (aka the general public who pay auto insurance premiums).

Here are a few examples of how those laws have been swayed in favour of insurers: It was at the request of insurers that catastrophic benefits were slashed in 2016/2017. It was at the request of insurers that accident benefits in Ontario have been cut year after year. It was at the request of insurers that a threshold and deductible which now sits around $36,920 was introduced for pain and suffering claims in Ontario car accidents.

I have NEVER met an individual who worked outside of the personal injury or insurance industry who was in favour of these changes to Ontario car insurance. I have never met an individual who worked outside of the insurance industry who actively lobbied their local MPP to slash accident benefits. I have never met an individual who worked outside of the insurance industry who was in favour of paying higher insurance rates, yet getting less coverage in accident benefits. But that’s beside the point. Let’s get back to this interesting report/study.

The report was prepared by Allan Hutchinson, of York University’s Osgoode Hall in Toronto.

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Articles Posted in Contingency Fee Agreements

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The Case in Support of Contingency Fee Agreements (Ontario)