Paying your Personal Injuries Lawyer (Vancouver / in BC)
A personal injury lawyer is generally retained on a Contingency Fee Arrangement, which means that the lawyer receives a percentage of your overall recovery at the end of the case. The advantage of the Contingency Fee Agreement is that you only pay the lawyer at the end of the case once you receive your settlement/judgment from ICBC. If you pay based on an hourly rate, you would have no control over the cost of the lawyers’ fees relative to the size of your claim. Also, you would have to pay the lawyer their legal fees as the case progresses. This would require you to have the necessary cash on hand to fund the litigation.
What should you look for to ensure you are not over-charged for the work performed by your personal injuries lawyer?
There are many law firms that charge a standard rate of 30-33.3% on all cases. The Contingency Fee Agreement is on a pre-printed form giving you the impression that the fee is standard and not negotiable. You should be very cautious about hiring an injury lawyer who is charging those rates regardless of the amount of work that is performed on the file.
The preferable system is to sign a Contingency Fee Arrangement where the lawyer’s percentage of recovery increases depending on how far along your case is when it settles. This is called a sliding scale Contingency Fee Agreement.
Where you have suffered serious orthopedic injuries, you should not hire a personal injuries lawyer for 30-33.3% unless there is a major liability problem. Shop around for a better percentage rate because the industry is very competitive and if an injury lawyer is not willing to charge a lower percentage fee for a large claim then you will end up overpaying the lawyer for his/ her services.
The only time you should accept payment of 30-33.3% to your personal injuries lawyer is:
- Where liability is a serious issue and there is risk of no recovery;
- You suffered minor soft tissue injuries without a lot of time off work;
- Your claim is arising out of a Low Velocity Impact and ICBC is denying the claim meaning the file will be defended vigorously by ICBC; OR
- The lawyer is offering you a sliding scale Contingency Fee Agreement and the 30-33.3% rate kicks in if the matter is going to trial.
Overall, you should be looking at a fee in the range of 20-30% for minor/ moderate soft tissue type claims and 10-25% for severe injuries.
Other than the percentage fee being charged, a Contingency Fee Agreement will also have numerous other clauses that could impact your net recovery. One of the clauses you should be cautious about is the treatment of disbursements. If your injury lawyer is not prepared to pay disbursements as incurred on the file and expects you to pay them upfront, before settlement, then you should be looking to another law firm because that may tell you this lawyer cannot financially support your ICBC claim.
In that regard, your lawyer should have a large credit facility available to enable the lawyer to spend enough money on your case to insure that it is fully developed so that you can maximize your recovery.
In recent times, law firms are charging interest on the disbursements they incur before the case is settled. In some instances, the percentage charged by the injury law firm makes the credit card interest charges look reasonable. You should be careful not to agree to pay a large interest percentage on the disbursement expenses.
The amount spent on disbursements will vary. On smaller cases, the disbursements are $1,000-$5,000. On larger cases, it is not unusual to have disbursements at $50,000-$100,000 or more. Therefore, if you are paying over 10% interest on disbursements over the 2-3 years your claim is open, you will owe the lawyer a very large amount for interest at the end of the case. The full amount of the interest charge is not recoverable from ICBC.
Contact Mussio Law Group if you are looking for a personal injuries lawyer in Vancouver or within BC.