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Contingency Fee Reform

In December 2017, Convocation approved a series of reforms to the regulation of contingency fees. The reforms are designed to enhance transparency and protect consumers against unscrupulous practices while safeguarding the role of contingency fees in facilitating access to justice.

In early 2018, Convocation adopted additional, related regulatory measures and held a call for comment on proposed rule amendments, a mandatory standard form contingency fee agreement and a ‘Know Your Rights’ guide for clients. The Law Society has reviewed the submissions and is in the process of finalizing these components of the regulatory model.

Government reforms
Amendments to the Solicitors Act and regulations are required to implement the contingency fee reforms.

The previous government’s Budget Bill, introduced in March 2018, included amendments to the Solicitors Act. It repealed subsection 28.1(8) of the Act, removing the restriction on including costs in contingency fee agreements except with leave of the court. The Budget Bill also added a new section to the Solicitors Act to provide that licensed paralegals may enter into contingency fee agreements with clients.

These provisions will come into force on a date to be named by the Lieutenant Governor, achieving some of the Law Society’s proposed reforms. However, certain changes, including the introduction of a mandatory standard form contingency fee agreement, are dependent on changes to regulations.

The Law Society is continuing to work with the government to implement these changes.

Background
The contingency fee reforms were recommended by the Advertising and Fee Arrangements Issues Working Group, which was formed in February 2016 to consider regulatory responses to issues related to advertising, referral, contingency and other fee practices. The working group held three calls for comment regarding contingency fees (see documents below). 

Related documents
Report to Convocation – February 2018 – Call for comment
Contingency Fee Reform Consultation Document – February 2018
Report to Convocation - January 2018 - Additional regulatory measures
Report to Convocation - December 2017 – Contingency fee reforms
Report to Convocation - June 2017  - Call for comment
Contingency Fee Consultation Document – June 2017  
Report to Convocation - June 2016  - Call for comment
Call for Feedback Fact Sheet - July 2016