Lawyers' Fees (Script 438)
|The Dial-A-Law library is prepared by lawyers and gives practical information on many areas of law in British Columbia. This script gives information only, not legal advice. If you have a legal problem or need legal advice, you should speak to a lawyer. For the name of a lawyer to consult, call the Lawyer Referral Service at 604.687.3221 in the lower mainland or 1.800.663.1919 elsewhere in British Columbia.|
This script explains how lawyers’ fees are calculated and billed. You can also check the following scripts:
- 1 Do you fear fees?
- 2 Is there tax on lawyers’ fees?
- 3 What is a retainer?
- 4 What are disbursements?
- 5 How can you keep costs down?
- 6 What if you can’t solve a fee problem with your lawyer?
- 7 What if you can’t afford a lawyer?
- 8 More information
Do you fear fees?
You may approach a lawyer's office like you approach a dentist's office—thinking it's going to be painful—not in your mouth, but in your pocketbook. You don't know how much it’s going to cost, and you're afraid to ask. All you know is it could cost a lot.
Some people won’t even go to a lawyer when they have a legal problem because they fear the cost. And many people who go to a lawyer never ask about fees. They may be embarrassed or think it's impolite to talk about money. These people are mistaken because a delay in seeing a lawyer can cost them more in the end. It can also hurt their position. Failing to ask about fees can lead to problems and misunderstandings.
If you have a legal problem, don't avoid lawyers because of the cost (if you can’t afford a lawyer, see the note at the end of this script). When you see a lawyer, ask about fees the first time you meet. Lawyers should be able to tell you how they will calculate the fee and when they will bill you. They usually can’t give you a firm estimate of the total cost because it depends on many things that are hard to estimate, including the time a case will take.
No rule controls how much lawyers can charge or how they can bill you—the market decides these things. Lawyers usually bill you in one of the following four ways: fixed fee, hourly rate, contingency fee, or lump sum.
1. Fixed fees
Fixed fees are most common for routine work like wills and real estate. Some lawyers also use fixed fees for uncontested divorces and routine criminal cases, like impaired driving, theft, and assault. You pay the amount the lawyer quotes you, regardless of how much time the lawyer spends on the case.
2. Hourly rates
Hourly rates are the most common type of fee, probably because it is hard to predict at the start of a case just how much time it will take. A lawyer keeps detailed records of all the time spent on a case. Then they multiply the total hours by their hourly rate to get your bill. Most lawyers have a trial rate, by day or by court appearance, and it’s often higher than their normal hourly rate. Both hourly rates and trial rates depend on several things – the most important one is the lawyer's experience in an area of law. More experience means a higher rate.
3. Contingency fees
Contingency fees depend (or are contingent) on whether you win your case. If you win, you pay your lawyer part of the money you get. If you lose, you don’t pay your lawyer any fee, but you still pay expenses, such as medical reports and court filing fees.
Contingency fees are most common in personal injury and wrongful death cases from motor vehicle accidents. In these cases, the maximum fee is one-third of the amount recovered. In other cases involving personal injury or wrongful death, the maximum is 40%. These maximums are set by Part 8 of the Law Society Rules.
Contingency fee agreements must be in writing. Contingency fees are not allowed in family law cases involving child custody or access.
At the start of your case, you and your lawyer agree on the amount of the fee as a percentage of what you win. The actual percentage depends on your chance of success, the amount of your claim, and whether your case goes to trial or settles before trial. The percentage is lower if your case settles early, before the lawyer has done much trial preparation. The percentage is higher if your case goes to trial. Your agreement with the lawyer will have different percentages for different outcomes.
4. Lump-sum fees
Sometimes the first three types of fees may not work. In that case, you and the lawyer can try to agree on a lump sum that fairly reflects the time spent and all the other factors. If you can’t agree, you will have to ask a Registrar of the Supreme Court or the Law Society for help (see details below).
Is there tax on lawyers’ fees?
Yes, you have to pay GST plus provincial tax on lawyers' fees and on most expenses.
What is a retainer?
A retainer is money you pay to your lawyer as a deposit at the start of your case. The lawyer keeps this money in a trust account and uses it for fees and expenses. The lawyer bills you periodically and takes the amount you owe from the retainer. The lawyer may bill you monthly, or at the end of each stage of your case, or at the end of your case. When the retainer falls below a certain level, the lawyer asks you for more money.
What are disbursements?
Disbursements are expenses your lawyer pays for you. You have to pay your lawyer for those expenses. They include costs of photocopies, faxes, long distance telephone calls, postage, couriers, experts, medical reports, and court filings. Disbursements can often be high—ask your lawyer to estimate how much they will be.
Do you have a written agreement with your lawyer? Make sure you have a written agreement with your lawyer that covers fees. If your lawyer doesn't use a standard form for this, ask for a letter confirming your discussion.
How can you keep costs down?
- Ask the lawyer how they will tell you about the progress of your case. Keep your own file with copies of all letters and court documents. Make notes of things you want to bring up at your next meeting. Don’t phone the lawyer too often—many people do this, which means they pay more than they need to. Before you phone, consider if it would be better to write a letter or email. Then you have a written record and your lawyer can deal with your questions properly. If you call, you may interrupt your lawyer who is concentrating on another case. If you must phone, explain to the lawyer's secretary why you are calling. The secretary knows about your case and may be able to help, so you don’t have to speak to the lawyer.
- Be organized, so you don’t waste the lawyer’s time. Before you first meet with the lawyer, make a list of everything you want to say and ask. Make a point-form summary of your case in chronological (or time) order. Include the important details and names (with addresses, phone numbers, and other helpful information). Some lawyers will ask you to fill in a fact sheet before your first interview.
- Ask the lawyer if a junior colleague can do some of the routine work on your case—they have lower rates.
- Be reasonable. Try to agree on the minor things that aren't worth fighting about. Save your time and money for the important things.
- Don’t count on a court ordering your opponent to pay all your costs. A court can order your opponent to pay costs, but those costs are based on a schedule and may cover only about 35% to 40% of your lawyer’s bill.
- Supreme Court may award costs for fees and disbursements to the successful party. But Provincial Court awards litigation expenses only very rarely.
What if you can’t solve a fee problem with your lawyer?
If you have a problem with your lawyer’s bill, discuss it with the lawyer. Most lawyers want to clear up any misunderstanding over fees. If you can’t solve the problem, you have the following two choices:
- You may be able to use the Law Society’s Fee Mediation Program for disputes from $1,000 to $25,000. It is free. This program works only if your lawyer agrees to use it. If so, the Law Society appoints a mediator to help you reach a settlement. Since the process is voluntary, it works only if you and your lawyer can agree on a settlement. Check Script 436, “If You Have a Problem with Your Lawyer”, for more information. And call the Law Society at 604.669.2533 in the lower mainland and 1.800.903.5300 elsewhere in BC. The Law Society is the organization that licenses all BC lawyers. It protects the public by setting professional standards of competence and conduct for lawyers. It monitors, evaluates, and disciplines them.
- You can ask a Registrar of the BC Supreme Court to review the bill. This costs $80. Plus you may have to pay your lawyer’s costs if you lose. There is no limit on the amount of the fee. You don’t need your lawyer’s agreement to use this process. You have one year from the date of the bill to apply to the registrar—if you have not already paid it. But if you have already paid the bill, you must apply within three months of paying it. The Registrar holds a hearing where you and your lawyer each give your side of the case. Then the Registrar decides what the fee will be.
What if you can’t afford a lawyer?
You may be able to get legal aid, which is run by the Legal Services Society (LSS). It depends on your legal problem and other details. The LSS website lists legal aid locations. Or phone the province-wide Call Centre at 604.408.2172 (Greater Vancouver) or 1.866.577.2525 (toll free elsewhere in BC).
In some cases, a lawyer may be willing to charge you a lower fee if you can’t afford the regular rate.
[updated February 2016]
The above was last reviewed for accuracy by Steve Gjukich and edited by John Blois.
|© Copyright 2017, Canadian Bar Association British Columbia Branch. Dial-A-Law is a registered trademark owned by Canadian Bar Association British Columbia Branch, a non-profit membership corporation.|