Toronto Star

‘Double-dipping’ lawyers targeted in crackdown

Urging legislativ­e changes, law society will draft new rules on contingenc­y fees

- MICHELE HENRY AND KENYON WALLACE STAFF REPORTERS

Ontario’s legal regulator is asking Queen’s Park to change the law so that it can crack down on unscrupulo­us practices and make the contingenc­y fee system — “you don’t pay unless we win” — more transparen­t and fair.

The move came as the Law Society of Upper Canada voted Friday to draft new rules designed to stop “double dipping” — lawyers taking more money from injured clients than the law allows.

“We’re in discussion­s with the attorney general,” said Malcolm Mercer, chair of the law society’s advertisin­g and fee issues working group, which has been studying the contingenc­y fee system for more than a year. “We hope we can work together in implementi­ng the changes that were proposed.”

Those changes would require lawyers to give their clients a “know your rights” guide at the outset of a case; use a standardiz­ed contingenc­y fee agreement; disclose a precise breakdown of their fees and all related expenses incurred while working on the case; and provide a statement explaining why the charges are reasonable.

Lawyers would also be obliged to inform clients of their right to have their legal bills reviewed by the provincial assessment office.

The law society also wants lawyers to report the average contingenc­y fees they charge — informatio­n that would then be published in aggregate “so that consumers can better understand what the market looks like as they choose someone to re- tain,” Mercer told law society benchers at Friday’s convocatio­n meeting.

When it comes to “double dipping,” Mercer said a new regulation would have to be created under the Solicitors Act, the legislatio­n that governs how lawyers behave.

“The current operation of the Solicitors Act in dealing with contingent fees and costs has malignant results with respect to inherent conflicts of interest and causes problems, corruption­s with respect to access to justice,” Mercer said.

In terms of making the legal process more transparen­t for accident victims, the law society, in collaborat­ion with the Ministry of the Attorney General, will work together to create a simply worded, standardfo­rm contingenc­y agreement that every lawyer and client will need to sign before a case begins.

This year, a Star investigat­ion found that personal injury lawyers in the province routinely take more money from their clients than the law allows.

As a result, many accident victims who have received a settlement have been overcharge­d thousands of dol- lars and probably do not know it.

In simple terms, lawyers working on contingenc­y usually take as their fee a percentage of settlement money awarded for damages. But many lawyers, the Star found, routinely take — on top of their fee — a second payment called “costs” that the Solicitors Act states belongs to the client.

Under the law society’s proposed changes, lawyers will be able to take a percentage of the entire settlement, costs included, as their fee. That means lawyers will take just one cut of the settlement, and it must be clearly stated up front.

According to Mercer, all of the changes are intended to reform the contingenc­y fee system and protect consumers from what the law society has called “unscrupulo­us practices and unreasonab­le fees.”

In addition to contingenc­y fee reforms, the working group has also made changes to the way lawyers may advertise their services and charge referral fees. The now-approved recommenda­tions to reform the system were introduced earlier this year as the latest in a series of moves by the working group, which has been studying legal fee issues and lawyers’ advertisin­g practices since 2016.

 ?? TODD KOROL/THE CANADIAN PRESS FILE PHOTO ?? Malcolm Mercer, who chairs a law society working group on fee issues, said the province will have to create a new regulation under the Solicitors Act to prevent "double-dipping" by lawyers.
TODD KOROL/THE CANADIAN PRESS FILE PHOTO Malcolm Mercer, who chairs a law society working group on fee issues, said the province will have to create a new regulation under the Solicitors Act to prevent "double-dipping" by lawyers.

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