Contingency fees in Canada: the rules by province, caps and what to check

A contingency fee is a fee that depends on the result: the lawyer is paid a percentage of what you recover, and usually no fee if you recover nothing. Contingency fees are lawful across Canada, but each province sets its own rules. In Ontario, the agreement must use the prescribed standard form and contingency fees are banned in criminal, quasi-criminal and family law matters. In British Columbia, the Law Society Rules cap personal injury fees at 33⅓% for motor vehicle claims and 40% for other personal injury claims unless a court approves more. Elsewhere, there is no fixed percentage in the rules, but the fee must still be fair and reasonable and the agreement must be in writing. Before signing, check four things: the percentage, what it applies to, who pays disbursements, and who keeps any costs award.

This guide is part of the overview of lawyer fees in Canada. For a full numerical example, see the contingency settlement worked through to the net amount.

Where contingency fees are common

Personal injury: slip and falls, medical negligence, and motor vehicle claims where a tort claim is still available.
Long-term disability and insurance claims: disputes with an insurer over denied benefits.
Wrongful dismissal: some employment lawyers offer contingency or hybrid arrangements.
Class actions: the fee is usually a percentage approved by the court at the end.
Some commercial claims: often as a hybrid, with reduced hourly rates plus a success fee.

They are rarely offered for defending a claim, because there is no money recovered from which to pay the fee.

Province by province: the main rules

Province	Key rules (check the current text before relying on them)
Ontario	Solicitors Act s. 28.1 and O. Reg. 563/20 (in force 1 July 2021). The agreement must be in the Law Society's "Standard Form Contingency Fee Agreement". No contingency fees in criminal, quasi-criminal or family law matters. For a claimant, the lawyer's fees cannot exceed what the client recovers. The client can have the agreement or the account assessed by the court.
British Columbia	Legal Profession Act and Law Society Rules, Part 8. Agreement in writing. Personal injury and wrongful death caps: 33⅓% for motor vehicle claims, 40% for others, unless the court approves a higher rate. The cap covers the trial; an appeal may be covered by a separate agreement. Clients can ask the court to review the agreement.
Alberta	Alberta Rules of Court, Part 10, set out what a contingency fee agreement must contain and give the client a right to have it reviewed by a review officer within set time limits.
Quebec	Contingency fees (honoraires conditionnels or "à pourcentage") are permitted under the Code of ethics of advocates if fair and reasonable and agreed in writing. Class action fees need court approval. Fee disputes can go to the Barreau's conciliation and arbitration procedure.
Other provinces and territories	Contingency fees are permitted under each law society's rules and the provincial legislation, with requirements for written agreements and court or taxing officer review. Check your law society.

Law society rules are amended from time to time. Before relying on a figure, read the current rule on your law society's website.

What the percentage applies to

The percentage is only half the price. The other half is the base it is applied to. Ask whether the percentage applies to:

Damages only, or damages plus costs paid by the other side. In Ontario, since July 2021, costs may be included in the amount on which the fee is calculated, if the agreement says so; earlier rules generally kept costs separate.
Pre-judgment interest, which can be significant in a case that runs several years.
Future benefits, such as a structured settlement or ongoing disability payments, and how their value is calculated.

Worked example (illustrative): a claim settles for $90,000 in damages plus $15,000 towards costs.

Fee at 30% of damages only: $90,000 x 0.30 = $27,000.
Fee at 30% of damages plus costs: $105,000 x 0.30 = $31,500.

The difference, $4,500, comes from a single phrase in the agreement.

Sliding scales

Many agreements use a scale tied to how far the case goes, for example 20% if it settles before a claim is issued, 25% before discovery, 30% after discovery and 33% if it goes to trial. On a $100,000 recovery, the difference between 20% and 33% is $13,000. Ask what triggers each step and whether the step is based on the date of settlement or the work done.

Disbursements and tax

Contingency fees normally cover the lawyer's time, not disbursements. Expert reports, medical records, filing fees and transcripts can run into thousands of dollars in an injury claim. Ask:

Does the lawyer pay disbursements as they arise and recover them from the settlement?
If you lose, do you have to repay them? Some agreements say yes, some say no.
Is there interest charged on disbursements carried by the firm or a litigation lender?

Sales tax is charged on the fee itself at your province's rate, and on most disbursements. A 30% fee in Ontario is effectively 33.9% of the recovery once 13% HST is added (30% x 1.13). See tax and disbursements on a legal bill.

Adverse costs if you lose

A contingency fee protects you from your own lawyer's fees if you lose. It does not automatically protect you from paying the other side's costs. In common law provinces, an unsuccessful plaintiff can be ordered to pay part of the defendant's legal costs. Ask whether the lawyer or any insurance product will cover adverse costs; see how costs awards work.

Clauses to read before you sign

The percentage and any sliding scale.
The base: damages, costs, interest, future benefits.
Who pays disbursements, and what happens to them if you lose.
What happens if you end the retainer or change lawyers (you may owe a fee based on the work done so far, payable from any later recovery).
Whether settlement offers need your approval (they should).
Your right to have the agreement or the final account reviewed by the court.

Frequently asked questions

Can I negotiate the percentage?

Yes. Percentages are not set by law outside the BC caps, and lawyers differ. You can also negotiate a lower percentage for early settlement.

Are contingency fees allowed in family law?

Not in Ontario, where the Solicitors Act prohibits them in family law matters. Other provinces may allow them in limited circumstances. Ask your law society.

Do I get a statement at the end?

You should receive a final account showing the recovery, the fee, tax and disbursements. In Ontario, the regulation sets out what must be disclosed. If anything is unclear, ask in writing before signing a release.

What if I think the fee is too high?

You can ask the court or a review officer to review the agreement or the account; see how to challenge a lawyer's bill.

Sources

Ontario e-Laws — Solicitors Act, R.S.O. 1990, c. S.15, s. 28.1, and O. Reg. 563/20
Law Society of Ontario — the Standard Form Contingency Fee Agreement and guidance for clients
Law Society of British Columbia — Law Society Rules, Part 8 (lawyers' fees)
Alberta Courts — Alberta Rules of Court and review officers
Barreau du Québec — fee agreements and conciliation of accounts