A contingency fee is a fee paid out of the money a claim recovers, and only if the claim recovers money. You pay nothing when the file opens and nothing while it runs. If the claim fails, the fee is nothing. That is how personal injury work is done at this firm across Atlantic Canada. Criminal defence is not done that way.
The arrangement is old and it is regulated. What follows is what it actually covers, what it does not, and what to read before you sign one.
The Fee Is a Share of What the Claim Recovers
The written agreement sets a rate, and the fee is that rate applied to the settlement or judgment. No recovery, no fee. A claim that resolves for a small amount produces a small fee, and a claim that resolves for a large one produces a larger fee, because the fee moves with the result rather than with the hours worked.
That is the whole mechanism. There is no bill in the mailbox, no monthly statement, no retainer cheque at the start. The rate is stated in the agreement before any work begins, and it does not change afterwards without a new agreement in writing.
Nothing Is Payable Up Front and Nothing Is Owed If the Claim Fails
This is the part people ask about first, and the answer is short. If the claim recovers nothing, the client owes the firm nothing for the work.
An injured person is usually off work, and often has a first insurer already asking for a recorded statement. Requiring money at that moment would end most claims before they started. The whole reason contingency arrangements exist in Canadian law is that a person with a good claim and no savings can still get to court.
The Agreement Must Be in Writing and Each Province Regulates It
A contingency arrangement is not a handshake. Each Atlantic province regulates it through its law society and its rules of court, and each requires a written agreement signed by the client. The agreement states the rate, states what happens to disbursements, and states what happens if the retainer ends before the claim resolves.
Read it before you sign it, and ask the lawyer to walk you through the clauses you do not follow. A lawyer who will not explain the fee agreement in plain words is telling you something about the rest of the file. The Nova Scotia Barristers’ Society publishes the professional conduct rules that govern fee agreements in that province, and the equivalent body in each other province does the same.
Disbursements Are a Separate Thing From the Fee
The fee pays the lawyer. Disbursements are the out-of-pocket costs of running the claim: medical records, expert reports, filing fees, court reporters, mediators. They are real money paid to third parties, and they are accounted for separately from the fee.
On an injury file the firm usually funds these as the claim goes along and accounts for them at the end. How they are treated if the claim fails is set out in the agreement, so that is a clause to read closely. There is more on this in the note on who pays disbursements.
What the Rate Depends On
The rate in an agreement reflects the risk and the work the file is likely to need. A rear-end collision with an admission of liability and clean medical records is a different proposition from a medical malpractice claim that needs three expert opinions before anyone knows whether it can be brought at all.
Agreements often set one rate if the claim resolves before an action is started and a higher one if it goes to trial, because a trial is many months of preparation that a settled file never needs. Ask which rate applies at which stage, and ask what triggers the change.
Which Work Is Done on Contingency and Which Is Not
Personal injury and disability claims are the natural fit, because they end in a payment out of which a fee can come. That covers car accident claims, trip and fall claims, product claims, fatal accident claims and denied long term disability claims.
Criminal defence is not. A criminal charge does not produce money, so there is nothing for a fee to come out of, and it is billed instead. If someone offers to defend a criminal charge on contingency, ask what exactly they expect to take a share of.
The Fee Is Paid Out of the Settlement, Not Billed to You Afterwards
When a claim resolves, the money goes into the firm’s trust account. From there the fee, the disbursements and any repayments the claim has to make come out, and the balance goes to the client. The written statement the client reviews and signs sets out each of those amounts in turn.
Nothing arrives as an invoice weeks later. The point of the arrangement is that the client is never asked for money out of their own pocket, and the accounting at the end reflects that. The mechanics are set out in the note on the settlement statement.
Five Questions Worth Asking Before You Sign
Ask what the rate is and whether it changes at any stage. Ask who funds the disbursements while the file runs. Ask what you owe if the claim recovers nothing. Ask what happens if you decide to change lawyers partway through. Ask who at the firm will actually be running the file.
A firm that answers those five in writing is a firm you can hold to the answers. One that answers them vaguely will be vague later, when it matters more.
What a Contingency Fee Does Not Decide
The fee arrangement does not decide whether to settle. That decision belongs to the client, and a lawyer who pressures a client toward a number because the file has run long is doing it wrong. The lawyer advises on the claim’s value and the risks of going to trial. The instruction is the client’s.
It also does not decide what the claim is worth. Value comes from the medical evidence, the liability evidence and what courts in the province have awarded for comparable injuries, explained in the guide to general damages.
Where to Start
The first conversation is free and carries no obligation, and it is the conversation in which the fee arrangement gets explained. Bring the paperwork you already have. The Moncton office takes the first call, and what we can do for you sets out the rest of the service.