Solicitors Amendment Act (Contingency Fee Agreements), 2002 Bryant, Michael — Bill 178 (37th Parliament, 3rd Session)

Bill 178, 37-3

Ontario — Bills

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Bill 178, Solicitors Amendment Act (Contingency Fee Agreements), 2002

Bryant, Michael

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[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:

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 Subsection 16 (2) of the Act is repealed and the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.

Section 28 of the Act is repealed and the following

substituted:

Contingency fee agreements

(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;

(

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.

Date Bill stage Activity Committee

October 10, 2002

Ordered referred to Standing Committee

Standing Committee on Justice and Social Policy

October 10, 2002

Second Reading

Carried

October 10, 2002

Second Reading

Debate

September 25, 2002

First Reading

Carried

Debates and Progress

First Reading

September

25, 2002

Second Reading

Debate

October

10, 2002

Mr. Bryant, Mr. Martiniuk, Mr. Gerretsen, Mr. Marchese, Mr.

Conway

Declared

Carried and referred to the Standing Committee on Justice and

Social Policy

Committee

Standing Committee on Justice and Social Policy

Third Reading

Royal Assent :

Coming into force :Royal Assent.

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Document details

Collection	Ontario — Bills
Citation	Bill 178, 37-3
Type	bill
Volume / chapter	p37 s3 bill 178 html
Language	en
Format	html
Source	PROVINCIAL
Identifier	bac39655b98cc6329fd82550c23db4c285915157

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