Social utility of contingency fee agreements (no recovery no fee)

Contingency fee agreements (i.e. percentage fee agreements) have been permitted in British Columbia since 1969:


At common law, contingent fee agreements were illegal for being champertous. It had long been the case that a person was not permitted to assist or promote another’s lawsuit in consideration of sharing in the proceeds of that suit.


Since 1969, contingent fee agreements have been permitted in British Columbia but restrictions have been created to avoid the possible abuse of these types of retainers, including a limit on the amount of remuneration to which a lawyer is entitled under the agreement and a right of review by the registrar.

(Anderson v. Elliott, 1998 CanLII 2129 at para. 65 – 66 (BCSC)


Courts have confirmed the utility of contingency fee agreements in allowing clients who could not afford to pay a lawyer by the hour to nevertheless advance claims:


By way of preface, it will be useful to analyze the nature of a contingency contract for legal fees. In England, and for many years in Canada, such contracts were frowned upon as interfering with the administration of justice. They were once considered crimes in Canada under the headings of champerty and maintenance. In England they are not allowed (see s. 59(2)(b) of the Solicitors Act, 1974 (Eng.), c. 47)… [I]n British Columbia they are allowed under s. 99 of the Barristers and Solicitors Act, R.S.B.C. 1979, c. 26, and are now a common type of agreement. Manifestly, one of the reasons for permitting their existence is to allow citizens with limited means to carry on litigation.

(McQuarrie Hunter v. Foote, 1982 CanLII 489 at para. 5 (BCCA)).




[Contingency fee agreements] would not be necessary were all clients wealthy; but unfortunately there are many poor people whose claims would never be tested in court unless solicitors are prepared to do battle on their behalf, running the risk of receiving an inadequate fee if unsuccessful, and being compensated by receipt of more than the usual charges should success attend their efforts.

(Monteith v. Calladine, (1964), 47 D.L.R. (2d) 332 (BCCA) cited in Sandbeck v. Glasner & Schwartz, 1989 CanLII 2798 at para. 48 (BCCA)).




I do not wish to be thought as asserting that contingency contracts do not have a useful social purpose. Sometimes they are the only way for a poor man to obtain justice. With the appalling costs of some kinds of litigation, “poor” for this purpose includes the middle class.

(Usipuik v. Jensen, 1986 CanLII 1076 (BCSC) per Southin J.).


The above confirms the benefit that percentage fee agreements provide in allowing plaintiffs who cannot afford to pay a lawyer by the hour to nevertheless advance claims with the help of a lawyer.



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