Messing with fees for lawyers could leave victims in the cold.
It doesn’t matter that personal injury lawyers have a reputation for being predatory ambulancechasers, more concerned with making a buck than with seeking justice; nor does it matter that this reputation is not entirely undeserved, even if it may get exaggerated by pop culture portrayals and the tasteless ways some injury lawyers choose to advertise their services. It is still a very bad policy idea to legally cap lawyers’ contingency fees at 15 per cent.
The new Ontario private member’s bill introduced earlier this month by Liberal MPP Michael Colle (EglintonLawrence) would do just that — make it illegal for a lawyer to take more than 15 per cent of a client’s damage award as payment for legal services, even if the client would willingly agree to a higher percentage — which sounds like such a virtuous idea that it’s worth taking a closer look at why the results would likely not be of benefit to accident victims.
Nevertheless, before we get there, let’s keep in mind that it is right for the government to take steps to ensure that contingency agreements between lawyers and clients — agreements that a client doesn’t pay the lawyer unless he wins his case — are transparent and well-understood by all parties.
In the wake of a serious injury — with pain, anger, confusion, and financial pressures competing for a victim’s attention — the promise of a lawyer taking on the case with no money upfront could very well make it easy for a victim not to focus on the fact that the legal services on offer are nonetheless not “free,” and come with a potentially sizable price tag in the form of a chunk of what the court awards the victim (e.g., $20,000 of a $100,000 award in the event of a 20 per cent contingency arrangement). Credit to Colle: his bill would require a written lawyer/ client agreement to state in a “clear, comprehensible and prominent” way the means by which the lawyer’s cut will be calculated.
But let’s get back to the proposed cap. No one seriously believes that a lawyer will win all his cases, not even all his cases that seem to an objective observer to seek an honourable and commendable outcome for a real victim. Personal injury lawyers who work on a contingency basis are always facing a genuine risk of working long hours and expending considerable amounts of resources on a lawsuit, then being paid nothing for their troubles.
They offset this risk with higher contingency rates so that the cases they do win can cover those they lose (and then some so that they actually make a profit). Exactly what those rates will be to make the whole thing worthwhile for the lawyer will vary from firm to firm, specialty to specialty, circumstance to circumstance.
Given lawyers’ general popularity, this appeal to allow boundless contingency percentages so lawyers don’t go broke and/or hungry would perhaps be unconvincing on its own. But please, don’t forget — a contingency fee arrangement is what allows accident victims of all economic means to seek their due in court. There is virtually no meaningful legal aid available for civil cases, which means a person who suffers a real, major, preventable injury caused by another party — let’s say serious brain damage that renders the individual unable to care for his children and in need of expensive treatment and equipment — has to have his own cash to hire a lawyer to represent him.
Few people have access to the money it takes to retain a lawyer under these circumstances, especially since there is no guarantee the victim will receive any monetary award through the case, let alone a generous one. But with a contingency fee arrangement, the victim can get competent legal representation without having to find funds he doesn’t have, and without risking the funds he does.
Litigation is prohibitively expensive, but contingency arrangements give both lawyers and victims an incentive to use the courts to ensure that those who have been harmed because of another person’s recklessness or negligence will be made whole again. That is, as long as the contingency arrangements are set at a rate that makes the whole endeavour advantageous for all concerned — a rate which could very conceivably be higher than 15%.
According to the Toronto Star, embattled personal injury lawyers Diamond & Diamond have hired lobbyists to try to convince politicians to reject Colle’s proposal, which seems rather an overheated reaction to a humble private member’s bill.
But my goodness, for the far more modest fees of a freelance newspaper columnist, I reach the same conclusion as the hired-gun communication strategists. Capping contingency fees at 15 per cent really would leave a great many accident victims without a lawyer, which should raise alarm bells with anyone who wants to see the injured offered greater protections.