If you hire a lawyer for a Class Action Lawsuit in British Columbia what is a reasonable fee to pay?

Class Action Claims lawyers almost always advance the claims on a contingency fee basis.  This is permitted by Part 8 of the BC Legal Profession Act which permits lawyers to charge contingency fees.   Rule 66 of the Legal Profession Act permits the setting of Rules governing these fees and the applicable rules passed by the Benchers are set out in Part 8 of the Law Society Rules which state as follows:

Reasonable remuneration

8-1 (1) A lawyer who enters into a contingent fee agreement with a client must ensure that, under the circumstances existing at the time the agreement is entered into,

(a) the agreement is fair, and

(b) the lawyer’s remuneration provided for in the agreement is reasonable.

(2) A lawyer who prepares a bill for fees earned under a contingent fee agreement must ensure that the total fee payable by the client

(a) does not exceed the remuneration provided for in the agreement, and

(b) is reasonable under the circumstances existing at the time the bill is prepared.

Maximum remuneration in personal injury actions

8-2 (1) Subject to the court’s approval of higher remuneration under section 66(7) of the Act, 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.

(2) Despite subrule (1), a contingent fee agreement may provide that the lawyer may elect to forego any remuneration based on a proportion of the amount recovered and receive instead an amount equal to any costs awarded to the client by order of a court.

(3) This Rule does not prevent a lawyer and client from making a separate agreement for payment beyond the amount specified in subrule (1) to compensate the lawyer for representing the client in an appeal from a trial judgment pronounced in the proceeding for which the lawyer was retained.

Form and content of contingent fee agreements

8-3 A contingent fee agreement must

(a) be in writing,

(b) state that the person who entered into the agreement with the lawyer may, within 3 months after the agreement was made or the retainer between the solicitor and client was terminated by either party, apply to a district registrar of the Supreme Court of British Columbia to have the agreement examined, even if the person has made payment to the lawyer under the agreement, and

(c) not include a provision that

(i) the lawyer is not liable for negligence or is relieved from any responsibility to which a lawyer would otherwise be subject,

(ii) the claim or cause of action that is the subject matter of the agreement cannot be abandoned, discontinued or settled without the consent of the lawyer, a law firm or a law corporation, or

(iii) the client may not change lawyers before the conclusion of the claim or cause of action that is the subject matter of the agreement.

Statement of Rules in contingent fee agreements

8-4 (1) A contingent fee agreement between a lawyer and a plaintiff in a claim for personal injury or wrongful death arising out of the use or operation of a motor vehicle must include the following statement, prominently placed:

Under the Rules of the Law Society of British Columbia, without court approval, a lawyer may charge a maximum of 33 1/3% of the total amount recovered in a claim for personal injury or wrongful death arising out of the use of a motor vehicle.

The percentage limit applies to all matters related to the trial of a lawsuit, but does not include any appeal. A lawyer and a client may make a separate agreement for legal fees for an appeal.

Fees charged by different lawyers vary.

(2) A contingent fee agreement between a lawyer and a plaintiff in a claim for personal injury or wrongful death not affected by subrule (1) must include the following statement, prominently placed:

Under the Rules of the Law Society of British Columbia, without court approval, a lawyer may charge a maximum of 40% of the total amount recovered in a claim for personal injury or wrongful death.

The percentage limit applies to all matters related to the trial of a lawsuit, but does not include any appeal. A lawyer and a client may make a separate agreement for legal fees for an appeal.

Fees charged by different lawyers vary.

(3) If a contingent fee agreement includes a provision permitted under Rule 8-2(2), the statement required under subrule (1) or (2) must include the following:

The Law Society Rules allow a lawyer and client to agree that the lawyer may choose to charge the amount of costs awarded instead of a percentage of the amount recovered.

In addition to the above protections, the BC Class Proceedings Act provides additional safegaurds to ensure that fees are reasonable in Class Action Lawsuits.

This safeguard is necessary because once certified a lawyer chosen by a class representative represents the interests of the entire class which could include thousands of people.

One of the key protections is requiring Court Approval of lawyers fees in Class Action Lawsuits.  Specifically, section 38 of the Class Proceedings Act sets out the following requirements for lawyer fees in BC Class Action Lawsuits:

Agreements respecting fees and disbursements

38 (1) An agreement respecting fees and disbursements between a solicitor and a representative plaintiff must be in writing and must

(a) state the terms under which fees and disbursements are to be paid,

(b) give an estimate of the expected fee, whether or not that fee is contingent on success in the class proceeding, and

(c) state the method by which payment is to be made, whether by lump sum or otherwise.

(2) An agreement respecting fees and disbursements between a solicitor and a representative plaintiff is not enforceable unless approved by the court, on the application of the solicitor.

(3) An application under subsection (2) may,

(a) unless the court otherwise orders, be brought without notice to the defendants, or

(b) if notice to the defendants is required, be brought on the terms respecting disclosure of the whole or any part of the agreement respecting fees and disbursements that the court may order.

(4) Interest payable on fees under an agreement approved under subsection (2) must be calculated

(a) in the manner set out in the agreement, or

(b) if not so set out, at the interest rate, as that term is defined in section 7 of the Court Order Interest Act, or at any other rate the court considers appropriate.

(5) Interest payable on disbursements under an agreement approved under subsection (2) must be calculated

(a) in the manner set out in the agreement, or

(b) if not so set out, at the interest rate, as that term is defined in section 7 of the Court Order Interest Act, or at any other rate the court considers appropriate, on the balance of disbursements incurred as totalled at the end of each 6 month period following the date of the agreement.

(6) Amounts owing under an enforceable agreement are a first charge on any settlement funds or monetary award.

(7) If an agreement is not approved by the court or if the amount owing to a solicitor under an approved agreement is in dispute, the court may

(a) determine the amount owing to the solicitor in respect of fees and disbursements,

(b) direct an inquiry, assessment or accounting under the Rules of Court to determine the amount owing,

(c) direct that the amount owing be determined in any other manner, or

(d) make any other or further order it considers appropriate.

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