How Personal Injury Contingency Fees Work in Ontario

If you are hurt and worried about money, here is the short answer: with a contingency fee, you pay no legal fees up front, and your lawyer is paid an agreed percentage of what you recover, only if your claim succeeds. If there is no recovery, you owe no legal fee. Ontario does not set a single fixed percentage, but the law caps the arrangement in an important way, and there are real protections built in for you. This guide explains exactly how it works, what you actually pay, and the details most people do not learn until they are already signing.

What “no fees unless we win” really means

A contingency fee, sometimes called a “no win, no fee” arrangement, ties your lawyer’s payment to the outcome of your case. Instead of billing you by the hour as the work happens, the firm agrees to be paid a set percentage of the money you recover through a settlement or a court award. If your claim does not succeed, you do not pay a legal fee for the work.

For an injured person, that matters for one simple reason: it removes the money barrier at the front door. You should not have to choose between paying rent while you recover and hiring someone to take on an insurance company. The contingency model shifts the financial risk of the case onto the firm, which is also why an experienced firm will look carefully at the merits of a claim before taking it on.

There is a second, quieter benefit. Because the firm only gets paid if you do, your lawyer’s interest and yours point in the same direction: build the strongest possible case and pursue the fullest fair recovery. You are not watching a meter run every time you call to ask a question.

Is there a maximum contingency fee percentage in Ontario?

This is the question people ask first, and the honest answer has two parts.

There is no single fixed statutory percentage that applies to every case in Ontario. You may read that the cap is 25 percent, or 33 percent, or some other number. Those figures usually come from other provinces or from older or out-of-date sources, and they do not state Ontario’s rule correctly. Be cautious with any page that quotes a hard percentage cap as if it were Ontario law.

What Ontario does set are firm limits and firm rules. Under the province’s contingency fee regulation, a lawyer cannot recover more in fees than the amount the client recovers, counting any costs but excluding disbursements and taxes. In plain terms, your lawyer’s fee cannot swallow your whole recovery and leave you with less than the firm. On top of that hard limit, the fee must be fair and reasonable in the circumstances of your case.

There are also transparency rules designed to protect you. A firm that advertises contingency fees has to publish its general maximum contingency fee percentage, so you can see it before you ever walk in. Before you sign, the firm must give you the Law Society of Ontario’s plain-language consumer guide, Contingency fees: what you need to know. And in most personal injury matters the agreement itself must use the Law Society’s Standard Form Contingency Fee Agreement, dated November 18, 2021, which is written to be readable and to spell out how the fee is calculated.

So the accurate way to describe Merricks is this: no fees unless we win, with the fee set as a percentage in a written agreement, disclosed up front, capped so it never exceeds your recovery, and required to be fair and reasonable.

What counts as “the amount recovered”

When the fee is a percentage of what you recover, it helps to know what “recovered” includes. Under Ontario’s rule, the calculation is based on the damages you receive plus any costs, and it excludes any amount specified as disbursements and taxes. Your lawyer should walk you through this with a simple worked example before you sign, and the Standard Form agreement is built to show it.

That leads to the single most important detail people overlook: disbursements.

Disbursements: the part most people miss

A contingency fee covers the firm’s legal fee for its work. It does not, by itself, cover the out-of-pocket costs a case runs up along the way. Those costs are called disbursements, and understanding them prevents unpleasant surprises later.

Disbursements are the real expenses of building your claim. In an Ontario injury case they can include the cost of obtaining your medical and hospital records, fees for medical or rehabilitation experts to prepare reports, the cost of an engineer or other specialist where liability is disputed, court filing fees, the cost of examinations, and similar expenses. In a serious case, a properly prepared cost-of-future-care report or an economist’s report can be significant, and they are often what turns a modest offer into a fair one.

Here is how disbursements typically work with a contingency arrangement. The firm usually funds these costs as the case goes along, so you are not writing cheques while you are trying to recover. When the case resolves, the disbursements are repaid from the recovery, separately from the percentage fee. Your written agreement should say clearly who pays disbursements, whether the firm advances them, and how they are handled at the end. Ask about this directly, and make sure the answer is in writing.

Because disbursements are treated separately from the fee, the percentage your firm quotes is not the whole financial picture. A clear firm will show you, in a simple example, how the fee, the disbursements, and any taxes come out of a hypothetical recovery so you can see what would actually reach you.

What happens if the case is not successful

This is the reassurance the contingency model is built to give. If your claim does not succeed, you do not owe the firm a legal fee for its time. How disbursements are treated if a case is unsuccessful should be set out plainly in your agreement, so ask about it at the consultation and confirm it in writing before you sign. The goal of the arrangement is that pursuing a legitimate claim should not leave an injured person worse off for trying.

One related point specific to lawsuits: in Ontario litigation, a party who loses can sometimes be ordered to pay a portion of the other side’s costs. A good firm will talk to you about this risk honestly at the outset and about the tools that manage it, rather than leaving it as a surprise. It is part of an open conversation about what a claim involves.

A simple illustration of how the fee is calculated

Every case is different and no lawyer can promise an outcome, so treat the following only as an illustration of the mechanics, not a prediction.

Imagine a claim resolves for a settlement figure. From that amount, the disbursements the firm advanced (for records, expert reports, and filing fees) are repaid first. The firm’s contingency fee is then applied as the agreed percentage, and applicable taxes are accounted for. What remains is yours. Because Ontario’s rule caps the fee so it cannot exceed your recovery, the structure is designed so that you keep the larger share of what the claim delivers. Your firm should be willing to run these numbers for your specific offer at every decision point, so you are never asked to accept or reject an offer without understanding what it means in your pocket.

Your written agreement and your protections

The contingency agreement is not fine print to skim. In Ontario it is a regulated document with protections built in for you. Before you sign, you are entitled to the Law Society’s consumer guide. The agreement must set out how the fee is determined and include a plain example. And if a dispute ever arises about the fee, Ontario has a process for having a contingency fee agreement or account reviewed for fairness. You are never locked into a fee that a court would find unreasonable.

Read the agreement, ask questions, and do not sign until the percentage, the treatment of disbursements, the handling of costs, and the outcome-based nature of the fee are all clear to you. A firm that welcomes those questions is showing you how it will communicate for the rest of your case.

Contingency fees compared with paying by the hour

It helps to see the alternative. In many areas of law, a lawyer bills by the hour and asks for a retainer, a sum of money paid up front and drawn down as the work is done. For a business dispute that model can make sense. For an injured person who has lost income and is facing months of treatment, it usually does not. Paying hundreds of dollars an hour out of pocket, with no certainty of the outcome, would put a lawyer out of reach for most people exactly when they need one most.

The contingency model exists to solve that problem. It converts an unaffordable up-front cost into a share of a future recovery, and it puts the risk on the firm rather than on the person who was hurt. It also changes the day-to-day experience of working with a lawyer: because you are not billed for each phone call or email, you can actually pick up the phone and ask a question without watching a meter run.

There is one more piece worth understanding, because it can add to what you receive. In Ontario litigation, a party who succeeds in a lawsuit is often awarded a contribution toward their legal costs from the losing side. These are called costs, and they are separate from your damages. Under Ontario’s contingency rules, costs recovered can form part of the calculation of the fee, so your written agreement should explain how any costs award is treated. A clear firm will walk you through how damages, costs, disbursements, and the fee all fit together, so there are no surprises at the end.

How fees fit the shape of an Ontario injury claim

It helps to see where the fee sits in the bigger picture. Many injury claims in Ontario actually run on two tracks: an accident benefits claim through an insurer, which is decided by the Licence Appeal Tribunal if it is disputed, and a tort claim against the at-fault party, which is a lawsuit in the Superior Court of Justice. A contingency arrangement lets one firm run both tracks for you without an hourly bill arriving each month. You can read more about how compensation is built on our compensation for damages page and about the wider process on the personal injury hub.

What to do next

• Ask any firm you consult for its general maximum contingency fee percentage before you sign anything.

• Read the Standard Form agreement, and make sure the percentage, disbursements, and cost risk are all in writing.

• Ask for a simple worked example showing what would actually reach you from a hypothetical recovery.

• Book a free consultation so we can explain the numbers for your specific situation in plain language.

Frequently asked questions

Do I pay anything up front? No. With a contingency fee there are no up-front legal fees. The fee comes out of your recovery only if your claim succeeds, and disbursements are typically advanced by the firm and repaid at the end. Is there a legal maximum percentage in Ontario? There is no single fixed statutory percentage. The hard rule is that the fee cannot exceed the amount you recover (including costs, excluding disbursements and taxes), and it must be fair and reasonable. Firms that market contingency fees must publish their general maximum. What are disbursements? They are the out-of-pocket costs of building your case, such as medical records, expert reports, and court filing fees. They are separate from the percentage fee, and your agreement should say how they are handled. What if we lose? You do not owe a legal fee for the firm’s work. How disbursements are treated should be set out in your written agreement, so confirm it before you sign.

Talk to a lawyer, free. If you were hurt in the GTA and want a clear, no-pressure explanation of what a claim would cost you, we are ready to help. Get a free case evaluation, with no fee unless we win your case. Past results do not guarantee a similar outcome. Call 416-986-3036, or reach us any time at 905-624-4878. Take Back Control of Your Life.® Click or Call, That’s All!®

Merricks Law Group, Injury Lawyers · 191 The West Mall, Suite 110, Etobicoke, ON M9C 5K8

This article is general information about Ontario law, not legal advice, and reading it does not create a solicitor-client relationship. Every case is different.