Bill 12 2016

An Act to amend the Law Society Act, the Insurance Act and the Solicitors Act with respect to referral fees, contingency fees and awards for personal injury involving the use of an automobile

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Law Society Act

   1.  Section 26.1 of the Law Society Act is amended by adding the following subsections:

Definition

   (7.1)  In subsections (7.2) and (7.3),

"personal injury claim" means a proceeding for loss or damage from bodily injury or death arising from the use or operation, on or after November 1, 1996, of an automobile in Canada, the United States of America or a jurisdiction designated in the Statutory Accident Benefits Schedule as defined in subsection 224 (1) of the Insurance Act.

No referral fees

   (7.2)  Subject to subsection (7.3), no licensee shall, directly or indirectly,

  (a)  solicit or accept a referral fee from another licensee in exchange for directly or indirectly encouraging or otherwise arranging for a client to retain the other licensee to receive legal services with respect to a personal injury claim; or

  (b)  pay a referral fee to another licensee in exchange for having the other licensee directly or indirectly encourage or otherwise arrange for a client to retain the licensee paying the fee for the purpose of receiving legal services with respect to a personal injury claim.

Exception

   (7.3)  If a licensee, directly or indirectly, encourages or otherwise arranges for a client to retain another licensee to receive legal services in respect of a personal injury claim and if there is a successful disposition or completion of the claim, nothing in subsection (7.2) prevents the licensees from entering into a contingency fee agreement that provides that the licensee retained by the client will pay a fee to the first licensee out of the remuneration that the client is required to pay to the licensee so retained if the fee does not exceed the amount, if any, prescribed by the regulations made under section 63.

   2.  The Act is amended by adding the following sections in Part II after the heading "Conduct":

Contingency fees charged by paralegals

   32.  Unless they specifically provide otherwise, section 28.1 of the Solicitors Act and the regulations made under that section apply to a person who is licensed to provide legal services in Ontario but who is not licensed to practise law in Ontario as a barrister and solicitor, reading references in that section to a solicitor as references to such a person.

Agreements between paralegals and clients as to compensation

   32.1  (1)  A person who is licensed to provide legal services in Ontario but who is not licensed to practise law in Ontario as a barrister and solicitor may make an agreement in writing with his or her client respecting the amount and manner of payment for the whole or a part of any past or future services in respect of business done or to be done by the person, either by a gross sum or by commission or percentage, or by salary or otherwise, and either at the same rate or at a greater or less rate than that at which he or she would otherwise be entitled to be remunerated.

Fee disclosure

   (2)  The agreement shall disclose, in a clear, comprehensible and prominent manner, the means by which the remuneration for legal services to be paid to the person is calculated.

   3.  Subsection 63 (1) of the Act is amended by adding the following paragraph:

    9.  prescribing an amount for the purposes of subsection 26.1 (7.2);

Insurance Act

   4.  Subsection 121 (1) of the Insurance Act is amended by adding the following paragraph:

23.6.6 prescribing amounts for the purposes of subsection 267.9.1 (1);

   5.  The Act is amended by adding the following section:

Immunity for part of medical and rehabilitation costs

   267.9.1  (1)  Despite any other Act or agreement to the contrary, no action or other proceeding for damages as a result of personal injury may be commenced against any person for,

  (a)  any portion of the costs of any assessment, examination, test or report of a regulated health professional that exceeds $2,000 or such other amount that is prescribed by the regulations; or

  (b)  any portion of the costs of any other medical care or rehabilitation that a regulated health professional provides and that exceeds the amount, if any, that is set out in guidelines published by the Superintendent or such other amount that is prescribed by the regulations.

Definition

   (2)  In subsection (1),

"regulated health professional" means a health practitioner whose profession is regulated under the Regulated Health Professions Act, 1991.

Superintendent's guidelines

   (3)  The Superintendent may issue guidelines for the purposes of clause (1) (b) and if so, shall publish them on a site on the Internet.

Solicitors Act

   6.  Section 16 of the Solicitors Act is amended by adding the following subsection:

Fee disclosure

   (3)  The agreement shall disclose, in a clear, comprehensible and prominent manner, the means by which the remuneration for legal services to be paid to the solicitor is calculated.

   7.  (1)  Subsection 28.1 (4) of the Act is repealed and the following substituted:

Written agreement

   (4)  A contingency fee agreement shall be in writing and shall disclose, in a clear, comprehensible and prominent manner,

  (a)  the means by which the part of the remuneration for legal services to be paid to the solicitor that is contingent as described in subsection (2) is calculated, including the percentage used if the agreement involves a percentage of the amount or of the value of the property recovered in an action or proceeding; and

  (b)  all other matters relating to the agreement that the regulations made under subsection (12) prescribe.

Cancellation by client

   (4.1)  A client who has entered into a contingency fee agreement may, without any reason, cancel the agreement at any time.

   (2)  Subsection 28.1 (5) of the Act is amended by adding "Subject to subsection (5.1)" at the beginning.

   (3)  Section 28.1 of the Act is amended by adding the following subsection:

Exception, personal injury award

   (5.1)  If a contingency fee agreement involves a percentage of the amount of damages recovered in a proceeding for loss or damage from bodily injury or death arising from the use or operation, on or after November 1, 1996, of an automobile in Canada, the United States of America or a jurisdiction designated in the Statutory Accident Benefits Schedule as defined in subsection 224 (1) of the Insurance Act, the amount to be paid to the solicitor as a fee for recovering those damages shall not be more than 33 per cent of the amount, regardless of how the amount is recovered and despite the regulations made under this Act.

   (4)  Subsection 28.1 (6) of the Act is amended by adding "or (5.1)" after "Despite subsection (5)" at the beginning.

Commencement and Short Title

Commencement

   8.  This Act comes into force on the day it receives Royal Assent.

Short title

   9.  The short title of this Act is the Protection for Motor Vehicle Accident Victims and Other Consumers from Unfair Legal Practices Act, 2016.

 

EXPLANATORY NOTE

The Bill amends the Law Society Act to prohibit licensees who provide legal services with respect to a personal injury claim involving the use of an automobile from receiving referral fees except on the successful completion or disposition of the claim. Regulations that are made by the Law Society, subject to the approval of the Lieutenant Governor in Council, can limit the amount of allowable referral fees.

The Bill amends the Insurance Act to cap the amount of recovery of the costs of assessments, examinations, tests, reports or other medical care or rehabilitation provided by a regulated health professional in claims for personal injury involving the use of an automobile.

The Bill amends the Solicitors Act. If a lawyer or a paralegal enters into a fee agreement with a client, the agreement must disclose how the fee is calculated. The disclosure must be consumer-friendly, namely in a clear, comprehensible and prominent manner. If the fee involves a percentage of the amount of damages recovered with respect to a personal injury claim involving the use of an automobile, the amount to be paid to the lawyer or paralegal as a fee for recovering the damages is limited to 33 per cent of the amount of the damages.