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Instructions for Contingency Fee Checklists

On July 1, 2021, a new contingency fee regime comes into force. As a result, in most cases, lawyers and paralegals who enter contingency fee arrangements with clients will be required to use the Standard Form Contingency Fee Agreement (“Standard Form CFA”). When the client is a business that meets the requirements of O. Reg. 563/20, Contingency Fee Agreements (“O. Reg. 563/20”) or the court has approved the fee or contingency fee agreement, lawyers and paralegals may use a Non-Standard Form Contingency Fee Agreement (“Non-Standard Form CFA”). The Non-Standard Form CFA prepared by the lawyer or paralegal must meet the requirements of O. Reg. 563/20 unless the fee or the agreement has been approved by the court. In addition, lawyers and paralegals must comply with new client disclosure, marketing, statement of account, record keeping, and reporting requirements.
 
Note: These Checklists should not be used for class actions. The Class Proceedings Act, 1992 governs the use of contingency fees in Ontario class actions. Under the Class Proceedings Act, 1992, a contingency fee agreement between a lawyer and the representative plaintiff in a class action requires approval of the court. Accordingly, contingency fee agreements in class actions are exempt from the Standard Form CFA and Non-Standard Form CFA requirements under O. Reg. 563/20; these matters are also exempt from the Law Society’s disclosure, marketing, and reporting requirements.  

About the Checklists

The Law Society of Ontario has developed two checklists to assist lawyers and paralegals with (1) using the Standard Form CFA and (2) preparing a Non-Standard Form CFA. The checklists also provide a framework for complying with the new contingency fee requirements and adhering to practice management best practices.
 
These checklists should only be used for contingency fee agreements entered into on or after July 1, 2021.

How to use the Checklists

  • Review or ensure you are familiar with the following requirements:
  • Consider reviewing the Law Society’s Frequently Asked Questions about Contingency Fees
  • Select the Standard Form CFA Checklist or Non-Standard Form CFA Checklist, as applicable to the matter
    • Note: Even if the nature of the matter permits a lawyer or paralegal to use a Non-Standard Form CFA, they are not required to do so. For ease, lawyers or paralegals may elect to use the Standard Form CFA.
  • Fill in the information on the checklist
  • Follow the requirements set out in each section of the checklist
  • Note completion of each step on the checklist, the date upon which the requirements in each section are completed, and the lawyer or paralegal who completed the requirements  
  • Make notes at the end of the applicable checklist. Consider including notes about matters such as
    • the date the client retained you
    • how you determined the appropriate percentage of the contingency fee based on the factors outlined
    • the date on which the client disclosure requirements were met
    • the date of any application/motion made to the court for approval of the contingency fee agreement or fee, if applicable, and its outcome
    • questions that the client asked regarding the contingency fee agreement or arrangement, and responses provided, and
    • the steps taken to meet your fee-related reporting obligations.
  • Retain the completed checklist as part of the paper or electronic client file.

Resources       

Checklists, Standard Forms, and Guides

Standard Form CFA
Contingency Fees: What you need to know consumer guide
Standard Form Contingency Fee Agreement Checklist
Non-Standard Form Contingency Fee Agreement Checklist
Frequently Asked Questions about Contingency Fees

Legislative Authorities and Law Society Rules

Solicitors Act
O. Reg. 563/20
Rules of Professional Conduct
Paralegal Rules of Conduct
Paralegal Professional Conduct Guidelines
Terms or Concepts Explained