The Information You Need to Know Regarding Contingency Fee Arrangements

The Information You Need to Know Regarding Contingency Fee Arrangements

The Information You Need to Know Regarding Contingency Fee Arrangements

There could be many scenarios in which you need to hire a lawyer. Regardless of the case, one ever-present factor is the cost. Clients will always want the best legal representation they can get, as better legal representation leads to more court victories and higher settlements. However, sometimes the legal fees deter people from going down this path.

When you hire a lawyer, there are two main ways that payment will be handled. Either a lawyer will charge their client by the hour, making their hourly fee known outright, or they’ll make what’s known as a contingency fee agreement.

How Do Contingency Fees Work and How Are They Calculated?

Contingency fees are designed in a way where the lawyer gets paid based on the outcome of the case. Their legal fees will be paid either partially or entirely through an agreed-upon percentage of any compensation the client receives. Typically, agreeing to pay a lawyer a third of your compensation is standard practice.

The exact percentage of the compensation offered in contingency fee agreements, and the way the calculations work, can change from firm to firm. However, The Law Society of Ontario has recently made amendments to make these agreements more consistent and accessible to everyone.

Has Ontario Made Any Changes to Contingency Fee Agreements Recently?

As of July 2021, Ontario has made reforms to the way contingency agreements work. A large part of these reforms revolves around simplifying the language used in these agreements to make them more user-friendly on the side of the client, especially for those who struggle to understand legal jargon.

Furthermore, the fee calculations have been simplified, as many clients were complaining about them being a source of confusion. Additionally, the percentage of the settlement on awarding of money by the court that a lawyer takes now excludes disbursements. These reforms, in turn, make it easier for anyone to compare lawyers and law firms.

What Are the Advantages of Contingency Fee Agreements?

Contingency fee agreements favour those who would otherwise be unable to afford legal representation. As the fee is conditional on the client receiving compensation, settlements, or reimbursements, there’s no money that needs to be paid up-front. Additionally, the client isn’t worse off afterwards since the agreements state only a percentage of the compensation is paid.

Another advantage is the confidence that one’s lawyer will perform to the best of their abilities. The fact is, the higher the compensation to the injured victim, the higher the compensation to your lawyer, so in that way, the lawyer has a vested interest to do their best.

Lastly, a contingency lawyer doesn’t get paid until you get paid, so they want to settle your case as soon as they possibly can, when the conditions are appropriate for settlement. A lawyer paid by the hour gets paid more by spending more time on your case so they have a vested interest in allowing cases to take more time.

What Are the Disadvantages of Contingency Fee Agreements?

In some cases, legal fees could be higher when paying a contingency as opposed to an hourly rate, however, this scenario is usually only available to those who have expendable finances that can pay thousands of dollars to retain a lawyer and pay their hourly rates.

Are You in The Toronto Area? Do You Have Any Questions or Concerns About Contingency Fee Agreements? Contact Ristich Law!

If you’re in or around the Toronto area and looking for an experienced lawyer, contact Ristich Law today. We’re a team of highly skilled personal injury lawyers and are eager to work with you and help you claim the maximum amount of compensation possible. We’ll be happy to answer any questions you might have about contingency fees, so don’t hesitate to contact us.

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