Rule 5
Rule 5 Fees and Retainers
5.01 FEES AND RETAINERS
Reasonable Fees and Disbursements
5.01 (1) A paralegal shall not charge or accept any amount for a fee or disbursement unless it is fair and reasonable and has been disclosed in a timely fashion.
(2) What is a fair and reasonable fee will depend upon such factors as,
(a) the time and effort required and spent;
(b) the difficulty of the matter and importance of the matter to the client;
(c) whether special skill or service was required and provided;
(d) the amount involved or the value of the subject matter;
(e) the results obtained;
(f) fees authorized by statute or regulation;
(g) special circumstances, such as the loss of other retainers, postponement of payment, uncertainty of reward, or urgency;
(h) the likelihood, if made known to the client, that acceptance of the retainer will result in the paralegal's inability to accept other employment;
(i) any relevant agreement between the paralegal and the client;
(j) the experience and ability of the paralegal;
(k) any estimate or range of fees given by the paralegal; and
(l) the client's prior consent to the fee.
(3) No fee, reward, costs, commission, interest, rebate, agency or forwarding allowance, or other compensation related to his or her employment may be taken by the paralegal from anyone other than the client, without full disclosure to, and the consent of, the client.
(4) In a statement of account delivered to the client, a paralegal shall clearly and separately detail amounts charged as fees and as disbursements.
(5) A paralegal shall not appropriate any funds of the client held in trust, or otherwise under the paralegal's control, for or on account of fees, except as permitted by the by-laws under the Law Society Act.
(6) If the amount of fees or disbursements charged by a paralegal is reduced by a Court Order, the paralegal must repay the monies to the client as soon as is practicable.
Contingency Fees
(7) Except in Criminal Code (Canada) or any other criminal or quasi-criminal matters, a paralegal may enter into a contingency fee agreement in accordance with the Solicitors Act and the regulations made under it.
(8) In determining the appropriate percentage or other basis of the contingency fee, the paralegal shall consider a number of factors, including the likelihood of success, the nature and complexity of the claim, the expense and risk of pursuing it, the amount of the expected recovery and who is to receive an award of costs. The paralegal shall advise the client of these factors.
(8.1) A paralegal who enters into a contingency fee agreement must meet the following client disclosure requirements:
(a) provide the client with the Law Society’s consumer guide titled “Contingency fees: What you need to know,” available on the Law Society’s website, and a reasonable opportunity to review and consider it before entering into the agreement; and
(b) when billing for the contingency fee, deliver a bill to the client that:
(i) clearly shows the total amount of the settlement or award and the net amount that the client receives;
(ii) clearly itemizes and identifies disbursement costs, legal fees and taxes charged to the client;
(iii) explains the reasonableness of the fee with reference to the following factors:
(a) the time expended by the paralegal;
(b) the legal complexity of the matter at issue;
(c) the results achieved; and
(d) the risk assumed by the paralegal, including the risk of non-payment where there is a real risk of an adverse finding on liability in the client’s case; and
(iv) states that the client has the right to apply to the Superior Court of Justice for an assessment of the bill in accordance with section 28.1 of the Solicitors Act 1990 and specifies the latest date for doing so.
(8.2) The requirements of subrule (8.1)(b)(iii) and (iv) do not apply where a court approves the contingency fee.
(9) A paralegal who markets legal services on the basis that clients may be charged fees contingent, in whole or in part, on the successful disposition or completion of a matter must publish a general maximum contingency fee percentage. The disclosure must be by publication on the paralegal’s website, or, if the paralegal does not have a website, by providing the maximum percentage to potential clients when they first contact the paralegal.
(9.1) The client disclosure requirements of subrule (8.1) and the marketing requirements of subrule (9) do not apply where either the client or any person or entity responsible for the payment of the client’s legal fees in the matter that is the subject of the agreement, is an organization that, together with any affiliates, members of the same joint venture or any other related persons or entities,
(i) employs more than 25 individuals,
(ii) employs a lawyer on a full-time basis, or
(iii) has assets or gross annual revenues that exceed $10 million
[New - February 24, 2022]
Transitional Requirements
(9.2) Subrules (8), (8.1), (8.2) and (9) do not apply to contingency fee agreements entered into before July 1, 2021.
[New – July 2021]
Joint Retainers
(10) If a paralegal is acting for two or more clients in the same matter, the paralegal shall divide the fees and disbursements equitably between them, unless there is an agreement by the clients otherwise.
Division of Fees
(11) With the client's consent, fees for a matter may be divided between paralegals or paralegals and lawyers who are not in the same firm, if the fees are divided in proportion to the work done and the responsibilities assumed.
[Amended - October 2014, April 2017]
Fee Splitting
(12) A paralegal shall not,
(a) directly or indirectly share, split, or divide his or her fees with any person who is not a paralegal or lawyer, including an affiliated entity; or
(b) give any financial or other reward to any person who is not a paralegal or a lawyer, including an affiliated entity, for the referral of clients or client matters.
(13) Subrule (12) does not apply to multi-discipline practices of paralegal and non-licensee partners where the partnership agreement provides for the sharing of fees, cash flows or profits among members of the firm.
[Amended - October 2014, April 2017]
Referral Fees
(14) In this rule and rule 5.01(15),
"referral” includes recommending another paralegal or lawyer to do legal work for anyone except where the work is done through the same paralegal firm in which the referring paralegal primarily practices;
“referral agreement” means a signed written agreement between the referring paralegal or lawyer, the paralegal or lawyer who receives the referral and the client, in the form provided by the Law Society from time to time, which includes:
(a) confirmation that the client has been advised and understands that the client has no obligation to accept the referral;
(b) confirmation that the client has been provided with information about the Law Society’s requirements for payment and receipt of referral fees and a reasonable opportunity to review and consider that information;
(c) confirmation that the referring paralegal or lawyer has recommended at least two paralegals or lawyers to the client and, if not, disclosure of the reason that it has not been reasonably possible to do so;
(d) a provision that the client is free to retain a paralegal or lawyer other than the one who receives the referral;
(e) the reason(s) that the referring paralegal or lawyer has recommended the specific referee to the client;
(f) full and fair disclosure of the relationship between the referring paralegal or lawyer and the paralegal or lawyer who receives the referral;
(g) confirmation that no referral fee will be paid or payable unless and until the paralegal or lawyer who receives the referral is paid his or her fee for legal services for the matter; and
(h) full and fair disclosure of the referral fee including the circumstances in which the referral fee is payable and the basis upon which the amount of the referral fee is determined.
“referral fee” includes any financial or other reward for the referral of a matter whether the referral fee is direct or indirect and whether the referral fee is past, current or future. However, a referral fee does not include a referral of other work by the licensee who received the referral.
5.01(15) A paralegal may accept and a paralegal may pay a fee for the referral of a matter provided that:
(a) the referral fee is fair and reasonable and does not increase the total amount of the fee payable by the client;
(b) a referral agreement has been entered into at the time of the referral or as soon as practicable after the referral;
(c) the paralegal or lawyer who receives the referral has the expertise and ability to handle the matter;
(d) the referral was not made because the referring paralegal or lawyer;
(i) has a conflict of interest;
(ii) was a paralegal or lawyer whose license was suspended when the referral was made and who was accordingly not permitted to act on the matter;
(e) the amount of the referral fee shall not exceed fifteen percent (15%) of the fees paid to the paralegal or lawyer who received the referral for the first fifty thousand dollars ($50,000) of such fees for the matter and five percent (5%) of any additional fees for the matter to a maximum referral fee of $25,000.; and
(f) the paralegal or lawyer making or accepting the referral is not providing legal services through a civil society organization.
(16) The paralegal who received the referral for which a referral fee is payable shall note the referral fee on the account sent to the client at the time the referral fee is paid or payable and obtain the client’s acknowledgement of the referral fee failing which acknowledgement the paralegal shall confirm in writing to the client that the client has been asked to so acknowledge but has declined to do so.
Civil Society Organization Clients
5.01(17) A paralegal providing legal services through a civil society organization shall not directly or indirectly charge a fee to the person for whose benefit the legal services are provided, but the paralegal may charge disbursements in accordance with Rule 5.
Transitional Requirements
5.01(18) The provisions of subrule 5.01(15) do not apply to the payment of a referral fee pursuant to an enforceable agreement to pay and receive referral fees that was entered into before or on April 27, 2017.
In these circumstances, a paralegal who refers a matter to another paralegal or lawyer because of the expertise and ability of the other licensee to handle the matter and where the referral was not made because of a conflict of interest, the referring paralegal may accept and a paralegal who receives a referral may pay a referral fee provided that
(i) the fee is reasonable and does not increase the total amount of the fee charged to the client; and
(ii) the client is informed and consents.
(19) A paralegal who is entitled to receive referral fees pursuant to an unwritten agreement that was entered into before or on April 27, 2017 shall confirm in writing the terms of that agreement as soon as practicable to the other party to that agreement and shall provide a copy of such confirmation to the client.
(20) Where a referral was made before or on April 27, 2017 but there was no enforceable agreement for the payment of a referral fee as of that date, the requirement that the agreement has been entered into may be met by entering into a referral agreement at any time prior to payment of the referral fee.
(21) A paralegal shall not do indirectly what the paralegal is prohibited from doing directly under Rules 5.01(11), (14) and (15).
[Amended - October 2014, April 2017]