What are Contingency Arrangements?
For estate litigation, a contingency arrangement means that your lawyer will only charge you a percentage of what is recovered as you receive money from an estate. Although common practice in some areas of law, very few estate law firms offer contingency fees. Hourly rates are the standard method of billing, as contingency arrangements require a law firm to take on tremendous risk.
When are Contingency Arrangements Used?
Katzman Estate Law offers contingency fee arrangements for several estate dispute cases, including:
- Will Challenges
- Difficult Estate Trustees and Executor Removal Matters
- Spousal Elections
- Dependency Claims
- Disputes Involving Joint Bank Accounts and Beneficiary Designations
We offer these arrangements in situations where the amount of money in dispute is substantial and a case looks strong enough to take on litigation risk ourselves. For matters where there are few or no medical or financial documents available to assess the strength or value of a case, we may have to start a file on an hourly rate basis to get those documents before we convert the matter into a contingency arrangement.
Who Enters into a Contingency Arrangement and Why?
Will challenge and executor removal matters can cost tens of thousands of dollars to dispute, regardless of the strength of a case. If a client is unwilling or unable to invest that money themselves, they could lose access to hundreds of thousands or millions of dollars of an inheritance. Contingency arrangements solve the problem of a strong case not being brought forward because of an unaffordable cost.
Katzman Estate Law lawyers push their files forward as assertively as they can regardless of whether they are hourly or contingency; however, contingency arrangements better align the interests of client and lawyer. We always fight as though our own money is at stake. When we litigate on contingency, our money is at stake. It is for this reason that even well-resourced clients may be more comfortable with a contingency arrangement.
Our contingency clients can proceed with the knowledge that they will not run out of money partway through a dispute, which puts them in a position of strength both in litigation and negotiation.
Regulation of Contingency Agreements
Contingency agreements are regulated by the Law Society of Ontario (LSO). The LSO has mandated the use of its form, as a sample of which is found here.
The LSO Bylaw with respect to contingency fee agreement is found at the following link: https://www.ontario.ca/laws/regulation/200563
Important sections include:
1. A solicitor for a client who is a claimant shall not recover more in fees under a contingency fee agreement than the amount recovered by the client under an award or settlement from the party or parties against whom the claim was made, including any costs but excluding disbursements and taxes.
2. A contingency fee agreement that provides that the fee is determined as a percentage of the amount recovered by the client under an award or settlement shall exclude any amount that is specified as being in respect of disbursements that a court allows or would allow as recoverable from an adverse party.
Contingency Arrangements – Not for Every Case
Contingency fees are not appropriate for many types of cases, such as guardian and power of attorney disputes. Those matters centre around the well-being of another person, rather than the recovery of assets. Hourly rates are, unfortunately, the only option for some matters.