Upcoming changes to contingency fee agreements

These agreements replace traditional retainers, where a client would provide a lawyer with an up-front sum. CFAs are designed to increase access to justice by allowing a lawyer’s fees to be calculated as a percentage of amounts recovered rather than be paid hourly. 

Despite good intentions, these types of agreements have recently been scrutinized as over-complicated. In response, the Law Society of Ontario (“LSO”), the governing body for all lawyers in the province, has implemented new guidelines for CFAs. These changes, designed to enhance transparency around CFAs, are to take effect on July 1, 2021.  

Beginning next month, lawyers will, among other things, have to: 

• Use a standard form contract for all new CFAs, which is written in plain language and addresses the essential issues between lawyers and clients;  

• Publish the maximum percentage they will charge as fees, allowing clients to become better informed prior to entering the relationship;  

• Provide a standard Consumer Guide to potential clients outlining important aspects of the CFA; and  

• Provide the client with a detailed reporting letter once the claim has resolved, providing a narrative of the case and a description of how the fees were calculated. 

For more information on the upcoming changes to CFA agreements, please visit the LSO’s website or speak with a lawyer. If you’re considering a personal injury, human rights or employment claim, we encourage you to contact Ross & McBride LLP at (905) 526-9800 or at www.rossmcbride.com.