Ontario's Government will be bringing in new rules for personal injury lawyer contingency fee agreements on July 1, 2021. This will affect car accident injury victims, those who have been denied long term disability benefits by insurance companies and other injury victims who are pursuing lawsuits for compensation.
It will be interesting to see whether personal injury lawyers will reduce the market rate % charged for contingency fee retainer agreements after the Ont. Government's July 1 mandatory "standard contingency" rules come into force
The new Government rules appear to require that a lawyer's % fee be calculated on the damages AND defence cost contribution, as opposed to the current situation where, by law, the cost contribution belongs entirely to the client and reduces the lawyer's fee.
If the market rate remains the same, then personal injury lawyers will get more, while clients will get far less (which seems like a ludicrous, unintended, result of the Government's changes).
CURRENT: On a $100k for claims, plus costs contribution (15k defence costs) & disbursements tort lawsuit settlement on an often used retainer, the client gets roughly $85k (before HST).
AFTER JULY 1 Government changes: On the same settlement and same retainer, client receives $80,500 (before HST).
A copy of the new legislation can be found here: