As per the Law Society of Ontario’s own definition, a contingency fee retainer agreement is a retainer agreement under which payment is dependent on the successful disposition or completion of a client's matter. In other words, the lawyer who you decide to retain will not be asking for payment upfront in order to proceed with your case. Rather, the lawyer is paid by taking a percentage of the amount they obtain on your behalf in a judgment or settlement.
A contingency fee retainer agreement is commonly utilized in personal injury cases. The benefit is that a client who is injured and cannot work, does not need to worry about the upfront financial barriers to pursue their claim. The law firm which you retain will bear the upfront costs of issuing a claim on your behalf, requesting your medical records, and obtaining specialist reports to help build your case, amongst other things. Furthermore, a contingency fee retainer agreement aligns the interest of the client and the lawyer. A successful outcome for the client is also a successful outcome for the lawyer, unlike in other structures of payment where a lawyer may overcharge for their services and proceed with the intent for the litigation to continue unnecessarily.
Before signing a contingency fee retainer agreement, a lawyer should be transparent and outline the terms of the agreement to the client. A client should clearly understand the percentage a lawyer will take upon the successful resolution of their case. The Law Society of Ontario requires lawyers to use a Standard Form Contingency Fee Agreement and provide potential clients with a document called “Contingency fees: What you need to know” consumer guide before they enter into such an agreement. This ensures transparency with the client and the obligations that both parties have going forward.
A contingency fee retainer agreement opens the doors to justice. Individuals who have been wronged can seek justice and hold the responsible parties accountable for their actions without worrying about exorbitant hourly fees.