- There are limits to which the regulation of
contingency fees can be used to regulate lawyer conduct
generally.
- The Law Society's Rules of Professional Conduct
are intended to protect clients. The appointment of a
Complaints Resolution Commissioner by the Law Society is
expected to provide more meaningful recourse for clients.
- For example, a plaintiff may be protected from
a dishonest lawyer who runs up disbursements by Rule 2.08(1),
which states that "[a] lawyer shall not charge or accept any
amount for a fee or disbursement unless it is fair and
reasonable and has been disclosed in a timely fashion."
- A client may also be protected from a lawyer
trying to drum up disbursements for a non-arms-length person by
Rule 2.04, which deals with conflict of interest. Conflict of
interest is defined as an "interest that would be likely to
affect adversely a lawyer's judgment on behalf of, or loyalty
to, a client or prospective client, or that a lawyer might be
prompted to prefer to the interests of a client or prospective
client."
- Although a maximum percentage is not
recommended, the proposed draft regulation sets a cap that
limits a lawyer's remuneration up to the amount of the
recovery. This would prevent a lawyer from recovering more in
fees than the client receives in damages.
- The proposed draft regulation provides that if
the fee is expressed as a percentage of recovery, "recovery"
does not include costs and disbursements, if these are
specified. For example:
Agreement for 25% of recovery
Damages: $100,000
Costs: $10,000
Lawyer gets 25% of $100,000, not of $110,000.
Settlements, however, often do not distinguish
between damages and costs; thus, this may not apply in
settlements.
- The form and content of contingency fee
agreements could include requirements that clients are given as
much information as necessary to make an informed decision. For
example, the proposed draft regulation requires the agreement
to include a statement that:
-
- the client and the solicitor have discussed options for
retaining the solicitor other than by way of a contingency
fee agreement, including an hourly-rate retainer;
- hourly rates vary and that the client is advised to
check with other lawyers to compare rates;
- the client has the right to ask the Superior Court of
Justice to review and approve of the solicitor's bill.
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