In Ontario good lawyers are expensive. And a lot of people don’t have the money needed to hire a lawyer. Most lawyers require payment up front.
That’s one of the reasons why at our firm and most other personal injury firms in Ontario we work on what is commonly known as a contingency fee basis. What does this mean? This means that you do not pay us any fees up front. You only have to pay lawyers fees at the end when you claim is resolved and there is money in hand. It also means that if we don’t get you any money you don’t pay us any fees. Because of this we only like to take on claims where we are confident that we are going to win either full compensation or partial compensation for our clients.
But things are a little more complicated than this. In Ontario the person that loses in court, as a general rule, pays the legal fees of the winner. Legal fees can be substantial and run into thousands of dollars. So on a contingency basis even if you don’t have to pay your own lawyer, if you don’t recover any money you would still have to pay the legal fees of the other lawyer if you lose in court.
Good lawyers will always try to use the rules surrounding legal costs to their own clients advantage. They will use the costs rules to apply pressure.
In a rare case an insurance company will refuse to pay any amount of money to a claimant who may have a weak but legitimate claim. Sometimes such a posture is essentially a scare tactic. The costs of going to court are very high and insurers believe, correctly in my opinion, that if they force someone to go to court to prove their claim they can get a claimant to accept less money. Because if they lose they would have to pay substantial costs. To an insurer such costs are the cost of doing business. To an individual claimant the consequences of an adverse cost award could be devastating.
But there is a solution to this imbalance of power between insurers and individuals. There are other insurance companies that will sell an individual insurance that will pay the legal fees of the other side if they go to court and lose. And the beauty of this type of insurance is that it is also contingent – that is that you pay the premium only if you win. If you lose you don’t pay the premium but you still have the protection. Pretty good deal if you ask me.