N.B. Law Society says higher cap on lawyer contingency fees could improve access to legal help
Fees currently capped at 25 per cent, Society recommending 33 per cent
The Law Society of New Brunswick says there's anecdotal evidence that lawyers in the province are turning worthy cases away because of the current cap on contingency fees.
When lawyers accept contingency fee agreements, they get paid when the matter is resolved, either through a settlement or a judgment in court.
Since 1997, New Brunswick legislation has capped those fees at 25 per cent of the amount recovered.
Moncton lawyer Darren Blois chairs the committee that was asked to investigate how the agreements have been working and whether the rules need to be changed.
"It came to the law society's attention, primarily from lawyers who practice in medical malpractice," said Blois.
Medical malpractice cases are expensive to run and often hard fought, said Blois. Experts have to be hired, there's a lot of costs up front and rarely a quick resolution.
"And lawyers are finding that they just couldn't economically take cases like that unless they were very big or very easy — not with a 25 per cent contingency."
Blois says the cap is also an issue in cases involving minor motor vehicle accidents where the injured person might only be looking at damages of $10,000.
"Twenty-five per cent of that would be $2,500," said Blois. "Which, for a lot of lawyers, they weren't finding it economical to take."
Lawyers can apply for higher contingency fee
Basil Alexander, an associate professor of law at the University of New Brunswick, reviewed the committee report and noted that lawyers can apply to a reviewing officer for a higher fee.
The report doesn't say how often this happens but it does say 80 per cent of those applications are for medical malpractice cases.
It also says all but one of those applications had been approved, going back to 2012.
"So my question is this," said Alexander. "If lawyers don't have to go through that process, particularly since it seems to almost always be yes, will that result in more people getting their cases heard?"
He thinks it will be interesting to see whether people engage with the invitation to respond to the law society, either in writing or by attending a video conference on March 25.
He says lawyers do take on risk by accepting contingency fee agreements and clients do benefit, because they have certainty that they'll only pay in the end and they know the percentage of what they'll pay in advance.
But he says the issues are complicated and may be difficult to grasp.
It would be informative, he said, to hear from lawyers who wish they could have taken cases but decided they could not accept the risk.
The law society says lawyers are constrained by privilege from saying too much.
Bans on contingency fees in criminal and family law remain
The new rules do not change the existing ban on contingency fee agreements.
They're not allowed in cases involving family law or criminal law.
Osgoode law professor Trevor Farrow says there are reasons for that.
"When it comes to cases involving the rights of children, the location of cohabitation agreements, custody and access, it's not always about money, which makes it more difficult to decide what percentage of winning might look like," he said.
"Not to mention the somewhat distasteful notion of a business model premised on whether someone wins custody of children, or wins custody in the context of an intimate relationship with family violence. All of that is seen as a different kind of case."
As chair of the Canadian Forum on Civil Justice, Farrow says access to justice is increasingly a problem.
He says most people experience a legal issue in their lifetime and many are financially unprepared.
"Approximately 80 per cent are using other resources," said Farrow. "Like the internet, friend or family, like a trusted intermediary, a religious advisor or something like a community worker.
"About 80 per cent of people with legal problems access some other kind of help other than lawyers.
"And the number one reason why people deal with their own legal matters that people cite is typically cost," he said.
"It's just really expensive to get legal help," said Farrow.
The Law Society of New Brunswick says it has a role to protect the public interest and wants to hear from the public as to whether they think the changes are a good idea or bad.
"We want to give people the opportunity to make any kind of representation they want to make before we make any decision whether to go ahead with these reforms."
Blois invites people to learn more about the rules on the law society's website, which is also where the public can register to participate in Thursday's discussion.
The hour-long session in English begins at 6:30 p.m. and the session in French starts at 8 p.m.