The Law Society of Upper Canada voted Friday to draft new rules designed to prevent lawyers from overcharging their clients. It is also working with Queen’s Park to make the legal process more transparent for accident victims.
Ontario’s legal regulator is asking Queen’s Park to change the law so that it can crack down on unscrupulous practices and make the contingency fee system — “you don’t pay unless we win” — more transparent and fair.
The move came as the Law Society of Upper Canada voted Friday to draft new rules designed to stop “double dipping” — lawyers taking more money from injured clients than the law allows.
“We’re in discussions with the attorney general,” said Malcolm Mercer, chair of the law society’s advertising and fee issues working group, which has been studying the contingency fee system for more than a year. “We hope we can work together in implementing the changes that were proposed.”
Those changes would require lawyers to give their clients a “know your rights” guide at the outset of a case; use a standardized contingency fee agreement; disclose a precise breakdown of their fees and all related expenses incurred while working on the case; and provide a statement explaining why the charges are reasonable. Lawyers would also be obliged to inform clients of their right to have their legal bills reviewed by the provincial assessment office.
The law society also wants lawyers to report the average contingency fees they charge — information that would then be published in aggregate “so that consumers can better understand what the market looks like as they choose someone to retain,” Mercer told law society benchers at Friday’s convocation meeting.
When it comes to “double dipping,” Mercer said a new regulation would have to be created under the Solicitors Act, the legislation that governs how lawyers behave.
“The current operation of the Solicitors Act in dealing with contingent fees and costs has malignant results with respect to inherent conflicts of interest and causes problems, corruptions with respect to access to justice,” Mercer said.
In terms of making the legal process more transparent for accident victims, the law society, in collaboration with the Ministry of the Attorney General, will work together to create a simply worded, standard-form contingency agreement that every lawyer and client will need to sign before a case begins.
Earlier this year, a Star investigation found that personal injury lawyers in the province routinely take more money from their clients than the law allows. As a result, many accident victims who have received a settlement have been overcharged thousands of dollars and probably do not know it.
In simple terms, lawyers working on contingency usually take as their fee a percentage of settlement money awarded for damages. But many lawyers, the Star found, routinely take — on top of their fee — a second payment called “costs” that the Solicitors Act states belongs to the client.
Under the law society’s proposed changes, lawyers will be able to take a percentage of the entire settlement, costs included, as their fee. That means lawyers will take just one cut of the settlement, and it must be clearly stated up front.
According to Mercer, all of the changes are intended to reform the contingency fee system and protect consumers from what the law society has called “unscrupulous practices and unreasonable fees.” In addition to contingency fee reforms, the working group has also made changes to the way lawyers may advertise their services and charge referral fees.
The now-approved recommendations to reform the system were introduced earlier this year as the latest in a series of moves by the working group, which has been studying legal fee issues and lawyers’ advertising practices since 2016.