Statutory limits on percentage fees in British Columbia
Many jurisdictions have limits on the percentage lawyers are entitled to receive from awards made to plaintiffs. For example, in British Columbia, Rule 8-4 of the Law Society Rules states that, subject to limited exceptions, a lawyer may charge a maximum of 33.33% of the amount recovered when the claim arises out of a motor vehicle accident, and 40% of the amount recovered when the claim does not arise out of a motor vehicle accident:
Subject to the court's approval of higher remuneration…, the maximum remuneration to which a lawyer is entitled under a contingent fee agreement for representing a client up to and including all matters pertaining to the trial of an action, when acting for a plaintiff in
(a) a claim for personal injury or wrongful death arising out of the use or operation of a motor vehicle, is 33 1/3% of the amount recovered, and
(b) any other claim for personal injury or wrongful death, is 40% of the amount recovered.
[A] contract which may result in a fee in excess of the 33 1/3 % limit is void, and is not a rule which is designed to apply only if a particular fee is greater than the limit.
(Kay v. O'Neill, 1998 CanLII 3831 at para. 12 (BCSC)).
Note also that s. 67(2) of the Legal Profession Act, SBC 1998, c. 9 expressly prohibits the lawyer from taking a percentage of the costs recovered in addition to the damages recovered, and indicates that costs are not part of the “amount recovered”:
A contingent fee agreement must not provide that a lawyer is entitled to receive both a fee based on a proportion of the amount recovered and any portion of an amount awarded as costs in a proceeding or paid as costs in the settlement of a proceeding or an anticipated proceeding.
(Legal Profession Act, SBC 1998, c. 9, s. 67(2)).
If plaintiffs are concerned that the fee agreement they signed, or are being asked to sign, may allow for a fee greater than allowed by the above rules they should likely consult another lawyer for an independent opinion as to whether the fee agreement is enforceable.
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