Contingency Fees And Class Actions Make Legal Services Affordable For Canadians

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The system is expensive – the civil justice system that is. When I first started practicing law, some 30 years ago, I used to joke that I couldn’t afford to hire myself. Legal services are notoriously expensive. Most of our clients wouldn’t be able to hire us but for two important features of the Canadian civil justice system: contingency fees and class actions.

A contingency fee means that the fee is contingent on the result of the lawsuit. For personal injury law suits that typically means that the client will pay a percentage of settlement or trial award if and only if, the client wins and collects. For decades, contingency fees were legal everywhere in Canada except Ontario. That changed when Doug Lennox of our firm challenged the Ontario prohibition in the landmark decision McIntyre Estate v. Ontario (http://www.canlii.org). Doug persuaded the Ontario Court of Appeal to take a fresh approach to law on contingency fees. The court concluded that “the advantages to the administration of justice … in the form of increased access to justice are compelling.” Contingency fees allow clients of modest means are able to hire experienced lawyers and obtain their day in court.

The second important tool for countless Canadians to obtain to access to the civil justice system is the ability to file the case as a class action. Before class actions, product liability lawsuits were quite rare. The time and expense involved in these cases are so high that, even with a contingency fee, prosecuting a case for a single client is usually uneconomic. The problem was noted by the Supreme Court of Canada in Western Canadian Shopping Centres v. Dutton (http://www.canlii.org) where the court observed that “without class actions, the doors to justice remain closed to some plaintiffs however strong their claims.” By aggregating the claims into one class action, the cost can be shared by hundreds or even thousands of class members. As a result, the vast majority of Canadian product liability personal injury class actions are authorized by the courts to go forward as class proceedings rather than having to proceed as individual lawsuits. We, of course, see that as a very good thing.

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