[37] Bill 178 Original (PDF)
Bill 178 2002
An Act to amend the Solicitors Act
to permit and to regulate
contingency fee agreements
Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:
1. Section 15 of the Solicitors Act is amended by adding the following definition:
"contingency fee agreement" means an agreement referred to in section 28; ("entente sur des honoraires conditionnels")
2. Subsection 16 (2) of the Act is repealed and the following substituted:
Definition
(2) For purposes of this section and sections 20 to 27 and 29 to 33,
"agreement" includes a contingency fee agreement.
3. The Act is amended by adding the following section:
Awards of costs in contingency
fees agreements
20.1 (1) In calculating the amount of costs for the purposes of making an award of costs, a court shall not reduce the amount of costs only because the client's solicitor is being compensated in accordance with a contingency fee agreement.
Same
(2) Despite subsection 20 (2), even if an order for the payment of costs is more than the amount payable by the client to the client's own solicitor under an agreement, a client may recover the full amount under an order for the payment of costs if,
(a) the client is to use the payment of costs to pay his, her or its solicitor; and
(b) the solicitor and client have entered into a contingency fee agreement.
4. Section 28 of the Act is repealed and the following substituted:
Contingency fee agreements
28. (1) If a solicitor is retained to bring an action or other proceeding on a client's behalf, the solicitor and the client may enter into a contingency fee agreement by which the solicitor,
(a) purchases all or part of a client's interest in the action or other contentious proceeding that the solicitor is to bring or maintain on the client's behalf;
(b) stipulates for payment only in the event of success in the action or proceeding that the solicitor is employed to prosecute or for which the solicitor is retained; or
(c) agrees with the client that the amount to be paid to the solicitor is a percentage of, or is otherwise determinable by, the amount recovered in the action or proceeding or the value in the property recovered in the action or proceeding, whether that amount or property is recovered as the result of a settlement, judgement, order or otherwise.
No contingency fees in certain matters
(2) A solicitor shall not enter into a contingency fee agreement if the action or proceeding for which the solicitor is retained is one of the following:
1. A proceeding under the Criminal Code (Canada) or any other criminal or quasi-criminal proceeding.
2. A divorce proceeding.
3. A proceeding related to the support of a spouse or child or to the custody of or access to a child.
Written agreement
(3) A contingency fee agreement shall be in writing.
Maximum amount of contingency fee
(4) A solicitor shall not enter into a contingency fee agreement if the amount to be paid to the solicitor under the agreement is more than the maximum percentage prescribed by regulation of the amount recovered in the action or proceeding or is more than the maximum percentage prescribed by regulation of the value of the property recovered in the action or proceeding, however the amount or property is recovered.
Greater maximum amount where approved
(5) Despite subsection (4), a solicitor may enter into a contingency fee agreement where the amount paid to the solicitor is more than the maximum percentage prescribed by regulation of the amount recovered in the action or proceeding or more than the maximum percentage prescribed by regulation of the value of the property recovered if, upon joint application of the solicitor and his or her client, which application is to be brought within 90 days after the agreement is executed, the agreement is approved by the Superior Court of Justice.
Application heard in absence of the public
(6) An application under subsection (5) shall be heard in the absence of the public.
Factors to be considered in application
(7) In determining whether to grant an application under subsection (5), the court shall consider the nature and complexity of the action or proceeding and the expense or risk involved in it.
Enforceability of greater maximum amount of contingency fee
(8) A contingency fee agreement that is subject to approval under subsection (5) is not enforceable unless it is so approved.
Non-application
(9) Sections 17, 18 and 19 do not apply to contingency fee agreements.
Assessment of contingency fee
(10) For purposes of assessment, if a contingency fee agreement,
(a) is not one to which subsection (5) applies, the client may apply to the Superior Court of Justice for an assessment of the solicitor's bill within 30 days after its delivery or within one year after its payment; or
(b) is one to which subsection (5) applies, the client or the solicitor may apply to the Superior Court of Justice for an assessment within the time prescribed by regulation made under this section.
Regulations
(11) The Lieutenant Governor in Council may make regulations governing contingency fee agreements including regulations,
(a) governing the maximum percentage of the amount recovered or the maximum percentage of the value of the property recovered that may be a contingency fee;
(b) in respect of the treatment of awards of costs in actions or proceedings where there is a contingency fee agreement;
(c) prescribing requirements for contingency fee agreements including the form of the agreements and terms that must be included in contingency fee agreements and prohibiting terms from being included in contingency fee agreements;
(d) imposing duties on solicitors who enter into contingency fee agreements;
(e) prescribing the time in which a solicitor or client may apply for an assessment under clause (10) (b);
(f) exempting persons, actions or proceedings or classes of persons, actions or proceedings from this section, a regulation made under this section or any provision in a regulation.
Regulation made in consultation with Law Society
(12) In making a regulation under subsection (11), the Lieutenant Governor in Council shall consult with the Law Society of Upper Canada.
Commencement
5. This Act comes into force on the day it receives Royal Assent.
Short title
6. The short title of this Act is the Solicitors Amendment Act (Contingency Fee Agreements), 2002.
EXPLANATORY NOTE
The Bill amends the Solicitors Act to permit solicitors to enter into contingency fee agreements with their clients and to regulate such agreements. Contingency fee agreements may not be considered to reduce an award of costs and a client may collect full payment for an award of costs even if it exceeds the amount payable under an agreement, if the award is to be used to pay the client's solicitor and the solicitor and client have entered into a contingency fee agreement. Contingency fee agreements are prohibited in criminal matters and family proceedings. The amount of a contingency fee is a maximum percentage of the award as prescribed by regulation. Except with approval of the court, the maximum amount of a contingency fee cannot exceed the prescribed amount. The Bill allows the Lieutenant Governor in Council to make regulations governing contingency fees. The regulations are to be made in consultation with the Law Society of Upper Canada.