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The truth is that the cost of legal services in Canada is very expensive and it continues to increase by the minute. With this in mind, when a regular person is hurt in an accident and wants to hire a lawyer to represent him, file his personal injury claim accordingly, it’s entirely possible that he won’t be able to afford it. This is where contingency fees come into the picture – the most widely accepted practice in all of Canada and not just in Ontario.
What is the contingency fee agreement?
This is a bonded agreement between you and your lawyer which obligates the latter to represent you in court while the former agrees to pay a portion of the money that’s recovered. Basically, if your case has merit to it, the lawyer will be willing to represent you under this particular scheme and the regular commission is between 25% and 40% depending on the complexity of the claim and the likelihood of winning. The more likely you are to win, the less this percentage will be as the lawyer has a smaller risk factor. If you don’t get any money out of the entire situation, the lawyer won’t get paid – it’s as simple as that. Of course, when it comes to contingency fees, there are both advantages and disadvantages. Let’s go ahead and take a look.
Benefits
The pros of signing a contingency agreement are obvious – there is no upfront investment on your behalf which is particularly beneficial, especially in the current uncertain economic environment. Furthermore, it would provide you access to legal representation that you wouldn’t be able to otherwise afford. This is particularly beneficial. The lawyers work more to ensure that you win, so that they get paid too.
Disadvantages
The cons are also there, unfortunately. Now, the lawyer understands that there is a risk of him not getting paid at all. This is what he’s going to leverage to increase the overall percentage or the portion that he will receive in the event of a win. This is why it’s not uncommon but it’s actually more likely for the contingency agreement to be more expensive in the long run than the flat fee payment. However, you need to know that out of pocket expenses made by the lawyer have to be paid, irrespective of the outcome of the claim proceedings.
Of course, these are the things on the surface. There are quite a few rules and regulations which concern contingency fees and you need to make sure that these are handled properly to enter in this agreement with full knowledge of what’s happening. If you don’t have the necessary resources to back up your claim, the contingency fee is your only option. It also reduces the risk of further losses in the event the lawyer fails to recover any money at all. This is rather comforting.