Lawyer Contingency Fee Agreements: Doing it Right

By Roger Foisy on October 4th, 2011

A contingency fee agreement or retainer is defined as an agreement made between the lawyer and their client where the fee for services is only payable when there is a favourable result.  This means that the lawyer is not paid until the case is settled in the plaintiff’s favour or a court judgment is arrived at in the plaintiff’s favour. (See Full Legal Glossary of Terms)

Whatever awards the client receives from the case, this agreement states how much of that money is paid to the lawyer.  It is important to justify the determined percentages by explaining to the client the factors influencing the decision, like likelihood of success or expected awarded money.

There are requirements when using contingency fees which are important to follow.  Lawyers can accept contingency fees, but not in criminal or family law cases. Contingency is commonplace for personal injury lawyer fees in Ontario. These agreements must also be written and signed by both lawyer and client and must observe the guidelines laid out in the Solicitor’s Act.  If these agreements do not follow the requirements, there are consequences.

The case, Nancy Cotugno & Kingsway General Insurance Company, 2011 ONSC 1904 (CanLII), highlights the importance of ensuring that contingency fee agreements follow legislative requirements.  In this case, Ms. Cutogno retained an initial lawyer, Bernie Romano, in hopes that she could receive benefits following the death of her common law husband.  They had agreed on a contingency fee agreement, where she was to pay 30% of the amount received when the case was resolved in her favour.  Although this was confirmed in a letter and an email, Ms. Cutogno did not sign a written retainer agreement nor was she provided with a copy of a signed retainer agreement.

Sometime during litigation, Ms. Cutogno retained a different lawyer who settled her claim.  Mr. Romano was never paid for his initial legal services.  Mr. Romano applied to the court for a charging order regarding his fees.  The judge held that Mr. Romano was not entitled to this charging order because there was no evidence that the written retainer agreement had met the statutory requirements of being signed by a client, a lawyer and a witness and providing a copy of the signed agreement to the client.  This case shows the consequences of not knowing and failing to adhere to the specific legislative requirements when entering into contingency fee agreements.

If you’ve suffered a serious injury and are searching for a personal injury lawyer in Milton, Georgetown, Halton Hills, Oakville, Burlington, Mississauga and Surrounding Regions, contact us for a free consultation and evaluation of your case.

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