The vast majority of the time, our fee is a percentage, is contingent on a favourable settlement or trial outcome, and requires you to pay nothing upfront, which is explained in detail in our retainer contingency fee agreement, which incorporates more than two dozen required clauses further to the Solicitors Act, R.S.O. 1990, c.S.15, and the Contingency Fee Agreements, Ontario Regulation 195/04. The reason why the vast majority of people pursuing personal injury tort actions choose the retainer contingency fee agreement, because it’s too expensive for most people to pay an hourly fee on a case that could go over two years, especially if they are too injured to work after the motor vehicle accident.
However, prior to you signing a retainer contingency fee agreement with Rudder Law Professional Corporation, I will explain to you that you have the option of retaining me as your lawyer other than by a retainer contingency fee agreement.
There are two main ways a lawyer can bill you, which are as follows:
- Option #1 — By charging an hourly fee for work done;
- Option #2 — By charging a percentage of the amount of money awarded in a settlement or court judgment; or
- Option #3 — By accepting court ordered costs as the fee.
In regards to option #1, hourly rates may vary among lawyers depending on their years of experience since being called to the bar, and you can speak to other lawyers to compare rates.
If you instruct us to charge you fees based on a percentage of the amount of money awarded to you in a settlement or court judgment (Option #2), as is usually the case, then we would agree, and ensure you acknowledge and understand that all the usual protections and controls on retainers between a lawyer and client, as defined by the Law Society of Ontario and the common law, apply to our retainer contingency fee agreement.
The Advantages of a Percentage Arrangement
The advantage of choosing a percentage arrangement are as follows:
- If we cannot settle your case or if you lose at trial, then you would only have to pay our disbursements, but you would not have to pay us any fees; and
- If we go to trial and win, the percentage fee may be less than an hourly fee, if we have spent a significant amount of time on the trial.
The contingency fee is to be paid to us contingent on a settlement or trial verdict.
The Disadvantages of a Percentage Arrangement
The disadvantage of choosing a percentage arrangement (Option #2) is that you may end up paying us more in legal fees than if we were to charge you an hourly fee for work done (Option #1). This could happen if we are fortunate in favourably settling your lawsuit quickly.
Our Percentage based on the Legal Work Done
Our percentage fee will be less if your claim is settled than if it goes to trial. If it is settled, the fee will depend on the stage at which the lawsuit is settled. Our percentage fee will be:
- 33-1/3% of the damages awarded.
For the purposes of calculating our percentage fee, any amount awarded in respect of costs and disbursements is excluded.
We will not recover more in fees than you recover in damages or receive through a settlement.
If we successfully settle your claim or win at trial, we will seek a sum of money called costs from the Defendant(s). If our fee is calculated as a percentage of the settlement or court judgment, then you will receive the full amount of these costs, since these costs are not included in the calculation. If we settle your claim before trial on an all-inclusive basis, where no specific amount is assigned to costs, then by default we will assign 0.01% of damages to costs.
Unless ordered otherwise by a judge, you are entitled to receive any costs contribution or awarded to you, on a partial or substantial indemnity scale.
If, however, you are liable to pay costs, you are responsible for paying any costs contribution or award, on a partial or substantial indemnity scale.
In addition to our percentage fee or court-ordered costs as our fee, you have to pay all disbursements, even if we cannot settle your claim or lose at trial.
We will charge you for the minor ongoing disbursements that we have to pay. Some of these disbursements are things such as, but not limited to, the following: long distance telephone calls; photocopying costs; costs to deliver documents to court or the other lawyers; faxes; court filing fees (which the court charges to keep an official record of court documents); and, necessary land or company registry searches (i.e. to find out the proper name of the defendant).
If we successfully settle your claim or win at trial, the settlement or court judgment most likely will require the Defendant(s) to reimburse you for some of these disbursements.
We may have to hire other people such as, but not limited to, court reporters, expert witnesses, forensic accountants, accident reconstruction specialists, expert physicians to complete medico-legal reports, occupational therapists to complete future costs of care reports, and property appraisers to help us with your lawsuit. If we need to hire these people, we will first discuss the matter with you. As with the minor disbursements, if we successfully settle your claim or win at trial, the settlement or court judgment most likely will require the Defendant(s) to either pay the third party directly for costs of the major disbursement or to reimburse us if we paid for the major disbursement in advance of the settlement or trial.
Harmonized Sales Tax
In addition to our legal fees and disbursements, you agree to pay any Harmonized Sales Tax (HST) that we must charge you.
We have first charge on any funds received in regards to disbursements or taxes as a result of a judgment or settlement of the claim, subject to section 47 of the Legal Aid Services Act, 1998, S.O. 1998, c. 26.
Example of Contingency Fee Calculation
To illustrate how our percentage will be determined, we offer the following sample calculation. A claim settles before examinations for discovery for the following amounts paid as a lump sum:
|HST (on costs and disbursements)
|Total (lump sum payment from defendant)
Since our legal fee is 33-1/3% of the damages including interest awarded to you, and you receive the total amount of the costs, then the invoice delivered to you would look like the following:
|Legal fee of 33-1/3% x $100,000.00 damages
|Disbursements (reimbursed by defendants)
|Other Disbursements (not paid by defendants)
|HST (on fee and disbursements totaling $43,633.33)
You would then receive ($122,600.00 – $49,305.66 =) $73,294.34
You have the right to ask the Superior Court of Justice to review and approve our bill or statement of account, if the payment of fees and disbursements is by way of this contingency agreement. Should you wish to do so, you may apply to the Superior Court of Justice for an assessment of the bill within six months of its delivery to you.
You agree and direct that all funds claimed by us for legal fees, costs, taxes and disbursements shall be paid to RUDDER LAW PROFESSIONAL CORPORATION, in TRUST, from any judgment or settlement money. We will then deduct our fee, any HST, and any unpaid disbursements, and give you the balance.
Instead of a lump sum payment, some claims are paid out by way of a structured settlement. A structured settlement will pay you tax-free payments at set time intervals for a period of time. If your claim is paid out by way of a structured settlement, then our contingency fee is calculated and paid in lump sum based on the total damages awarded at the time of settlement.