Can You Afford a Personal Injury Lawyer? How Contingency Fees Work

March 11, 2025
Blog

Hiring a personal injury lawyer might seem expensive, but what if you didn’t have to pay anything upfront?

If you’ve been injured in an accident, the last thing you need is financial stress holding you back from seeking justice. That’s where contingency fee agreements come in.

This payment structure allows you to hire an attorney without worrying about upfront costs. Most legal firms in Edmonton charge through a contingency fee, like Sidhu Personal Injury Lawyers Edmonton.

Let’s break down how contingency fees work so you can confidently move forward with legal representation without the burden of out-of-pocket expenses.

Key Takeaways:

A contingency fee is an agreement where a lawyer is paid if they win the case.
Injury victims don’t pay litigation costs if they don’t win a financial recovery.
Contingency fees are not allowed in family law or criminal cases, such as divorce, child custody, DUI, or assault charges.

Contingency Fees Make Legal Help Accessible

In personal injury law, a contingency fee is an agreement where a lawyer’s payment depends on winning the case. These agreements are common in personal injury claims to allow injured individuals to pursue legal action without upfront costs. It offers several advantages, such as:

No payment is required unless you win.
Your lawyer is encouraged to secure the highest possible compensation.
Legal action becomes accessible even if upfront costs are a concern.

But here’s what you need to know:

The lawyer’s fee is a portion of the settlement or court award (between 20% and 50% in personal injury cases).
Injury victims do not pay litigation costs if no financial recovery is secured.
The Code of Conduct and Rules of Court regulate contingency agreements to guarantee fairness.
Lawyers must provide written agreements outlining terms, including any circumstances under which they can withdraw.
Alberta does not cap contingent fees, but the amount must be fair and reasonable.

If you think the fee is unreasonable and want to file a dispute, you can request a review from the Alberta court officer. This system enables access to legal representation if you can’t afford traditional hourly rates.

Regulations, Requirements, and Precedents

The rules governing contingent fees in Canada are established by each province’s or territory’s law society, along with court rules and other statutes. These bodies oversee the lawful profession and set the parameters for how lawyers can charge fees under these agreements.

Law Society Rules and Codes of Conduct: Each province’s law society mandates specific ethical and procedural guidelines that lawyers must follow when entering these arrangements. These rules cover transparency, fairness, and disclosure requirements.
Rules of Court: Provincial and territorial court rules set lawful standards for the validity and enforceability of contingent agreements. Courts can review these agreements and determine whether they are fair to clients.
Other Relevant Statutes: Some provinces have specific laws that dictate how contingent fees must be structured. For example, Ontario’s Solicitors Act and Contingency Fee Agreements regulation provide a standardized framework for these agreements.

Precedents on Contingent Fees

Legal precedents highlight how courts interpret and implement contingency regulations.

Ontario: The Solicitors Act requires lawyers to use a standardized agreement prescribed by the Law Society of Ontario. Any deviation from this template requires judicial approval. Lawyers cannot charge fees exceeding the client’s total recovery.
New Brunswick: Lawyers must use a standardized agreement to ensure uniformity across the province.
Alberta: Contingency fee agreements for lawyers must include specific statements regarding the client’s right to have a Court Review Officer assess both the contingency fee and the lawyer’s charges, as well as the right to appeal the Court Review Officer’s decision to a judge.
Other Provinces: Some jurisdictions allow lawyers to draft their own agreements, provided they comply with ethical requirements. Courts may intervene if agreements are deemed unfair or unreasonable.

Requirements for Arrangements

Law societies impose specific requirements for agreements to protect injury victims and injury lawyers in Edmonton.

Fee Disclosure: Attorneys must disclose their maximum percentage at the outset, either on their website or during the first consultation.
Cost Inclusion: Some jurisdictions permit costs to be factored into contingent fees, which affect the final payout to the attorney.
Standardized Agreements: Certain provinces require all attorneys to use a prescribed form for clarity and fairness in client arrangements.

Calculating Contingent Fees: Will it Cover all the Litigation Costs?

Contingency costs are based on a percentage of the amount recovered in your case. For those involved in personal injury accidents, here’s how the calculation works:

If your car accident settlement reaches $100,000 and the agreed cost is 33.3%, your lawyer receives $33,300.
If your case settles for $10,000, your lawyer gets $3,330.

Note: No win means no fee—lawyers only get paid if they secure personal injury compensation.

Expenses Not Included in Contingency Fees

These arrangements cover legal services but do not include certain costs. Two major expenses outside the cost are:

Disbursements: Costs incurred to handle the case, such as court filing fees and expert witness payments. Some attorneys pay these upfront and recover them later, while others require payment as the case progresses.
Sales Tax: Legal fees are subject to tax. For example, if the lawyer’s cost is $33,300 and the tax rate is 13%, the total cost increases to $37,629.

Let’s say you win a $50,000 settlement with a 35% agreement. The lawyer’s cost is $17,500. Additional expenses, including disbursements ($2,000, for example) and sales tax, increase the total costs. This means you will take home less than the full settlement amount. You must understand these costs upfront to avoid surprises and clarify cost arrangements.

Do All Injury Attorneys Accept Cases on a Contingency Basis?

Not every injury lawyer works on a contingent fee basis. Some Edmonton personal injury lawyers charge hourly rates, meaning you must pay for the time spent on your case. Others may require a retainer, where you place a deposit in an account and use it as needed for legal work.

Contingency fees are allowed in cases where financial compensation is involved, such as personal injury (like motor vehicle accidents), wrongful death, or employment or insurance company disputes.

There are situations where contingency fee agreements are not permitted. For example, family law matters—such as divorce and child custody cases—and criminal cases, including charges like DUI or assault, cannot be handled on a contingency fee basis. Law societies restrict this payment method for these cases, which requires clients to cover costs through other payment structures (mostly flat fee or hourly).

Legal Assistance is Within Reach with Edmonton Personal Injury Lawyers

If you’ve been injured due to someone else’s negligence, you’re likely to deal with pain, missed work, and financial stress. Hiring a lawyer might feel like just another burden, especially with high expenses.

A contingency fee agreement removes that worry. Our attorneys at Sidhu Personal Injury Lawyers Edmonton only get paid if we win your case. You can focus on recovery without worrying how to afford our lawyer.

Our personal injury law firm is fully invested in your success—if you aren’t compensated, neither do we. This guarantees we work hard to secure the best possible outcome for you. Call us for legal support and free consultation.

Frequently Asked Questions

What terms must be included in a Contingency Fee Agreement?

Some provincial rules outline specific terms that must be in the agreement for it to be enforceable. In Alberta, the Rules of Court require the agreement to include:

Lawyer and client’s name and address
Nature of the claim
Event or condition that triggers payment
How the payment is calculated
Maximum payment allowed
Whether the client is responsible for disbursements and other charges
Lawyer’s share of any costs awarded
Conditions for terminating the agreement
Legal process for reviewing the agreement

Other provinces follow similar guidelines to regulate and enforce these contracts. Before signing, review the terms carefully to understand your rights and obligations.

How are contingency fees structured?

Set up in different ways, depending on the agreement between you, your lawyer and any applicable rules. The parties first agree on the settlement percentage or award to the lawyer and then determine how it will be applied.

Fixed: The percentage remains the same throughout the case.
Staged/Graduated: A lower percentage applies if the case settles early, increasing if it progresses further.
Partial: The accident victim pays some costs upfront, with a lower payment applied if they win.
Bonus/Premium: The lawyer receives an additional payment on top of personal injury litigation costs if the case is successful.

What happens if you lose your case?

If you hire a lawyer by the hour, losing your case could mean a large bill with no compensation. That’s a big financial risk.

With a contingency fee agreement, you don’t pay lawyer costs unless you win. This means there’s no upfront cost, and you won’t owe anything if your case isn’t successful.