Contingency Fees in Estate Litigation

Contingency fees are ‘success fees’.

When legal fees are payable on contigency they are payable when the claim ‘succeeds’ and not before.

Generally, when the client engages a lawyer on contingency, if the lawyer’s efforts do result in recovery of funds for the client, then the client does have to pay the lawyer for the legal services (they might have to pay some or all of the out-of-pocket expenses).  And of course, if the client ‘loses’ they may have to pay ‘costs’ to another party in the ligitation.

The high cost of estate litigation

Estate litigation is usually quite expensive.  Learn more about controlling costs in estate litigation here.

Why?  Done properly litigation requires a deep dive into all of the details followed by a professional judgment to focus the case a few key issues and facts.  This exercise consumes time, effort, and energy, and requires real skill and judgement.  In addition, the stakes are often high both financially and emotionally.  As a general rule, estate litigation is done most effectively (best results, fastest, at best cost) by counsel with deep experience in estates law and litigation practice.  As a result, hourly rates are high and the number of hours are high, resulting in the potential for high overall costs.

However, experienced counsel can also assist to ensure that the litigation is as cost-efficient as possible.  This includes – bringing the right claim in the right court framed the right way, focusing on the right arguments and evidence, efficient production and discovery, then efficient use of Court hearings and offers to settle.  Clients, can also play a pivotal role in cost control by actively participating in fact-finding, document compilation, and focusing on the key issues and not irrelevant matters. 

Of particular significance is that experience estate litigation counsel often get cases resolved much faster than counsel without the same experience.  While there are no guarantees (especially since so much depends on the behavour of the other side), often experienced counsel can assist their clients to get a result that is better on all fronts for the client – higher amount net of legal fees, with less grief, sooner.

 

Unequal bargaining power in estate disputes

In estate litigation there is are often two important inequalities – inequality with respect to access to funds to pay lawyers, and inequality with respect to the desire for change versus the status quo.often a significant inequality of bargaining power between the parties.

Often, one side has access to the assets of the estate and no desire for any change, while the other side (usually our client) has received little or nothing from the estate and has to pay for all of the usual expenses of daily living which leaves very little left to pay lawyers on the hope that they will recover something eventually from the estate.  

Usually, the onus of ‘forcing the matter forward’ lies with the party who has been excluded from the house or estate, while the party who lives in the house or controls the estate is content to drag things out indefinitely.

Contingency fees coupled with skilful management of the litigation can (good lawyering) can reduce these inequalities and level the field.  This in turn usually encourages prompter and more realistic settlement.

The terms of the Contingency Fee Agreement

Contingency fee arrangements must comply with the regulations established by the Law Society of Ontario.   

All clients must receive this LSO Guide to Contingency Fees to understand their rights and options before they sign a contingency fee agreement.

In setting the fees we use two approaches – a percentage of recovery (usually 10-30% of recovery depending on the case and when the matter is resolved), and a ‘fixed fee’ approach.

Under both approaches, the amount paid to us increases if the dispute consumes more time and effort.

The fixed fee approach that we use sets out a series of increasing amounts, with the amounts going up in steps that correspnd to how long the dispute goes on and when it resolves.  For instance, our fixed fees would be for resolution before pleadings (if, for instance, we can get a result by sending demand letters), after the start of litigation or at mediation, or if a contested court hearing is required.  We base the amounts on our experience of how much it usually costs to resolve a case like yours at these various stages.

In all cases, our clients know in advance what the fees will be because they are set out clearly in the the Contingency Fee Agreement which the client signs.

This helps out clients assess their options and to make better decisions about settlement.

An important consideration for both our % of recovery and fixed fee engagements is how any ‘costs award’ is dealt with for determining how much our client has recovered and how much we get paid.  Learn more about ‘costs awards‘ here.

The process

We follow this process –

• Inquiry from you.  You contact us to discuss your estate dispute.
• Fact gathering.  We gather as many facts – especially documents and correspondence from you as possible.  Usually these are either sent to us by email or uploaded to a secure drive.  We will usually run title searches on relevant real estate at this stage.
• Initial consultation.  We have an initial consultation, usually by videoconference to discuss your situation, whether we can assist, and whether we think that this is an appropriate case for a contingency fee agreement.
• Summary letter.  We send you a letter that summarizes our understanding of the facts, our recommendations, and our proposed engagement terms.  At this stage we confirm that we have properly understood the facts, that you agree with the proposed strategy, and you agree to the proposed engagement terms.  If you have questions, comments, or changes, we address them at this stage.
• Engagement.  We send you the Contigency Fee Agreement for review, and then for signature by DocuSign.
• Once the engagement is signed, we get moving to try to resolve the issue.

Note that usually we do not ask for payment of any amount from you for any step of this process.

Sometimes we we recommend our ‘pre-paid consultation service‘ in lieu of the no-cost consultation.  This is usually when our initial fact gathering suggest that a one-hour consultation might be sufficient to resolve your concern, or to assist you to find more suitable ways than estate litigation for getting advice or resolving the problem.