Lawyers' Fees: Preventing and Solving Problems

This script explains how lawyers’ fees are calculated and billed. You can also check the following scripts:

• 435, called “Choosing a Lawyer”
• 436, called “If You Have a Problem with Your Lawyer”

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, available on the Law Society website (www.lawsociety.bc.ca) under “Publications”. There are no maximums for other types of cases.

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 your lawyer’s fee 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:

1. 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. Or see its website at www.lawsociety.bc.ca. 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.
2. 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. For details, see the Registrar’s Office website at www.courts.gov.bc.ca/supreme_court. Click on “About the Supreme Court" and then on “Registrar’s Office”. Lastly, click on “Legal Profession Act Reviews”.

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. To find a legal aid location near you, go to the LSS website at www.legalaid.bc.ca and under “Legal aid”, click “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.

More information

The Law Society of BC website (www.lawsociety.bc.ca) has a section called, “Lawyers’ Fees”. It covers common billing practices, contingency fees, fee disputes, and the Law Society Fee Mediation Program.

[updated April 2014]

---

---

The testing of the claims in a court proceeding at a formal hearing before a judge with the jurisdiction to hear the proceeding. The parties present their evidence and arguments to the judge, who then makes a decision resolving the parties' claims against one another that is final and binding on the parties unless successfully appealed. See "action," "appeal," "argument," "claim," "evidence" and "jurisdiction."

In law, the re-examination of a term of an order or agreement, usually to determine whether the term remains fair and appropriate in light of the circumstances prevailing at the time of the review. In family law, particularly the review of an order or agreement provided for the payment of spousal support. See "de novo," "family law agreements," "order" and "spousal support."

A person licensed to practice law in a particular jurisdiction by that jurisdiction's law society. See "barrister and solicitor."

In law, all of the personal property and real property that a person owns or in which they have an interest, usually in connection with the prospect or event of the person's death.

(1) In law, a court proceeding; a lawsuit; an action; a cause of action; a claim. (2) A historic decision of the court; case law. See "action," "case law, " "court proceeding," and "precedent."

In law, (1) a piece of draft legislation presented to the legislature for its approval,or (2) a lawyer's statement of account for services rendered to their client. See "account," "act," and "lawyer's fees."

In family law, an antiquated term used by the old Divorce Act to describe the right to possess a child and make parenting decisions concerning the child's health, welfare and upbringing. Replaced in the new Divorce Act with the term decision-making responsibility." See "access," "decision-making responsibility" and "parenting time."

Under the old Divorce Act, the schedule of a parent's time with their children under an order or agreement, replaced with "parenting time" and "contact" in the new Divorce Act. Access usually referred to the schedule of the parent with the least amount of time with the child. See "contact," "custody" and "parenting time."

(1) The assertion of a legal right to an order or to a thing; (2) the remedy or relief sought by a party to a court proceeding.

(1) The act of hiring of lawyer, (2) the money paid to a lawyer to secure their services, or (3) the terms and extent of a lawyer's services on behalf of a client.

In law, a form of possession of property in which a "trustee" keeps and manages property for the benefit of another person, the "beneficiary," without owning that property and usually without acquiring an interest in that property other than as payment for their services. The trustee holds the property in trust for the beneficiary. See "constructive trust," "ownership," "possession" and "resulting trust."

In law, (1) a lawyer's bill to their client or a statement, or (2) a person's recollection of events.

In law, a calculation of the allowable legal expenses of a party to a court proceeding, as determined by the Supreme Court Family Rules. The party who is most successful in a court proceeding is usually awarded their "costs" of the proceeding. See "account," "bill of costs," "Certificate of Costs or Expenses" and "lawyer's fees."

In law, intentionally or unintentionally allowing the value of a piece of property to diminish through carelessness, neglect, or purposeful harm.

A mandatory direction of the court that is binding and enforceable upon the parties to a court proceeding. An "interim order" is a temporary order made following the hearing of an interim application. A "final order" is a permanent order, made following the trial of the court proceeding or the parties' settlement, following which the only recourse open to a dissatisfied party is to appeal. Failing to abide by the terms of an order may constitute contempt of court. See "appeal," "consent order," "contempt of court," "decision" and "declaration."

A person who is younger than the legal age of majority, 19 in British Columbia. Not to be confused with "miner," which means something else altogether. See "age of majority."

A mandatory direction of an arbitrator, binding and enforceable upon the parties to an arbitration proceeding, made following the hearing of the arbitration trial proceeding or the parties' settlement, following which the only recourse open to a dissatisfied party is to challenge or appeal the award in court. See "appeal," "arbitration," and "family law arbitrator."

In law, a person named as an applicant, claimant, respondent, or third party in a court proceeding; someone asserting a claim in a court proceeding or against whom a claim has been brought. See "action" and "litigant."

A court established and staffed by the provincial government, which includes Small Claims Court, Youth Court, and Family Court. The Provincial Court is the lowest level of court in British Columbia and is restricted in the sorts of matters it can deal with. It is, however, the most accessible of the two trial courts and no fees are charged to begin or defend a family law proceeding. The Family Court of the Provincial Court cannot deal with the division of family property or any claims under the Divorce Act. See "Divorce Act," "judge" and "jurisdiction."

A resolution of one or more issues in a court proceeding or legal dispute with the agreement of the parties to the proceeding or dispute, usually recorded in a written agreement or in an order that all parties agree the court should make. A court proceeding can be settled at any time before the conclusion of trial. See "action," "consent order," "family law agreements" and "offer."

An officer of the court with the power to make certain decisions, including the settlement of a lawyer’s bill, a party's costs of a court proceeding, and settling the form of an order. An officer of the court charged with the responsibility of reviewing and approving certain documents submitted to the court, such as pleadings. See "jurisdiction" and "pleadings."

In law, any proceeding before a judicial official to determine questions of law and questions of fact, including the hearing of an application and the hearing of a trial. See "decision."

Normally referred to as the "Supreme Court of British Columbia," this court hears most of the trials in this province. The Supreme Court is a court of inherent jurisdiction and has no limits on the sorts of claims it can hear or on the sorts of orders it can make. Decisions of the Provincial Court are appealed to the Supreme Court; decisions of the Supreme Court are appealed to the Court of Appeal. See "Court of Appeal," "jurisdiction," "Provincial Court" and "Supreme Court of Canada."

A fee arrangement whereby a lawyer is paid by taking a percentage of the money awarded to their client by the court or a settlement. Contingency fee agreements are not allowed in family matters, although sometimes a lawyer will agree to be paid from the assets held by a party following the final resolution of an action, such as the proceeds of the sale of a family asset. See "account," "lawyer's fees," and "retainer."