Contingency Fees in Personal Injury Cases
Many of us have worked with lawyers. You may have hired a lawyer to help buy a business, to handle a divorce case, to draw up a will, or to help settle a relative’s estate. If you’ve paid a legal bill, you know that expert help can be expensive. Sometimes after an accident, an injured victim may be reluctant to consult with a personal injury lawyer because they’re afraid of the expense. The injured person may be unable to work and household finances may already be strained. They fear that hiring a lawyer will be impossible to afford.
However, almost all personal injury law firms in Canada work for their clients on a contingency basis. This means that, when you engage a personal injury lawyer, you agree to pay a certain percentage of whatever money you receive in compensation to your lawyer.
There are several reasons why this is a good idea. First, it means that you, as an accident victim, will not be under further financial pressure during a difficult time in your family’s life. Second, a personal injury lawyer is always able to obtain a larger settlement than someone who tries to navigate the complicated insurance and legal system on their own. So even though you’ll be paying a percentage of what you receive to your lawyer, chances are that on your own, you would have received a much smaller amount. Third, because your lawyer doesn’t get paid unless you get paid, you can be reasonably certain that you have a strong case, and that your lawyer will fight hard to get you what you deserve.
Why You Need a Personal Injury Lawyer
Sometimes accident victims or their families feel that hiring a lawyer is unnecessary. They think that, because they’ve been paying for insurance for years, their insurance company must be working for them, and that they won’t meet resistance to their claim. They underestimate the amount of work and expertise that it takes to correctly assemble the paperwork, fill out the forms, and meet the deadlines required by the insurance industry.
Most people who attempt to handle the insurance and legal aspects of a personal injury claim end up seeking advice from a professional eventually. Because one of the two ways your insurance company makes a profit is by limiting the amount of money paid out in claims, they often make it difficult for victims to successfully claim what they deserve. This can be particularly evident in cases that involve long-term disability or pain and suffering awards. With an experienced personal injury lawyer helping you to file a claim, negotiate, or take the company to court, you stand a much greater chance of success.
Deciding on a Contingency Fee
Contingency fees may only be used in certain types of cases; for example, no Canadian lawyer can work under a contingency agreement for a criminal matter. However, contingency agreements are common in personal injury cases in Canada. The Law Society of Ontario notes that the factors that should be considered when drawing up a contingency fee contract include:
- the likelihood of success
- the nature and complexity of the claim
- the expense and risk of pursuing the claim
- the amount of the expected recovery
- who is to receive an award of costs, and
- the amount of costs awarded.
The aim is to make sure that the percentage agreed upon is both fair and reasonable. In a more complex case that is expected to take longer to resolve, the percentage requested by the lawyer will be higher. If the lawyer is to receive the award of costs, the percentage would be lower; if the client receives the award of costs, the contingency percentage would be higher. In many cases, the contract includes a clause that says clients are responsible for expenses such as obtaining medical records and court fees.
A contingency fee can range from 10% to as much as 45% of what the client may be awarded. Some provinces set maximum percentages for contingency fees. In British Columbia, the maximum is 33 1/3% for personal injury or wrongful death in motor vehicle accident cases, 40% for other personal injury or wrongful death cases, and no maximum limit for cases not involving personal injury or wrongful death. In New Brunswick, the percentage is 25%, but in some cases can be increased to 30%.
The Law Society of Ontario also notes that the agreement must be in writing and must comply with the Solicitors Act and its regulation, O. Reg. 195/04 Contingency Fee Agreements.
Locate a personal injury law firm that serves your area, and make an appointment for a free initial consultation today. For personal injury cases, contingency fees are negotiable. A good lawyer will be happy to discuss your situation, and present you with options that are available to you.