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Editorial: Sunlight needed

“Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.”

So said Louis D. Brandeis, former associate justice of the Supreme Court of the United States, criticizing investment bankers for making a profit by shifting the risk of investments to others. And, oh, how his words resonate when it comes to the Law Society of Upper Canada’s advertising and fee arrangements issues working group report.

The 34-page report is chock full of observations and recommendations that casts aspects of personal injury law into a dubious light, in areas such as advertising, referral fees, and contingency fee practices. The report also looked at advertising and fees in real estate law.

Among its findings —  the group said it’s “concerned that contingency fee pricing is not currently sufficiently transparent at the outset to consumers.

“In the personal injury market, for example, where firms are typically operating on a contingency fee basis, the contingent fee that a prospective client can expect to be ultimately charged often remains opaque and it is difficult to determine whether a competitive structure is being proposed.”

The working group also reports a “major concern was that referral fees in personal injury law have become unreasonable and disproportionate, with several participants relating that some referring firms are currently negotiating upfront flat-fee payments that are sometimes very large in addition to up to a 30 [per cent] share of the fee at the successful conclusion of the matter.” Ideas to deal with the problem include making advertisers spell out when it is not them providing the prospective legal services and making it clear they are referring clients out for a fee, or getting rid of upfront flat referral fees on contingent fee matters.

No doubt new LSUC Treasurer Paul Schabas will have his work cut out for him corralling the mess. Into the breach, Paul.

  • "Organizational drift"

    Jokelee Vanderkop
    The LSUC's report is out. Will it be lost in some legal abyss or will regulations be brought in to turn the pi lawyering "business" into an honourable "profession" where the client comes first, rather than billing practices or a pay cheque. "Organizational drift seems to have become the rule in our market economy, regardless of the business. Greed wins yet again.
  • a "mess" or the"ultimate" in A2J

    Brian Francis
    And to think that this “mess” is held up by some as “the ultimate” in “access to justice”! (see below)

    "The vast majority of personal injury lawyers work on a contingency-fee basis, Gluckstein notes, something he says is “probably the ultimate message for access to justice.”
    LAW Times - Why is personal injury bar so against ABS?
    Monday, 19 January 2015
  • "corralling the mess"

    Brian Francis
    Rogue assessors selling (too often unchallenged) biased and even unqualified "expert" medico-legal opinion evidence to insurer defence lawyers - insurer assessment mills with quality control staff "editing" the medical reports of the "independent" doctors whom they employ on a fee-for-service basis - personal injury "referral mills" and settlement mills" - opaque contingency fees - self-awarded fee premiums - systemically missed limitation deadines - and on and on it goes. Is it any wonder the Ontario personal injury litigation system is perpetually broken and in need of a major overhaul? Is it any wonder the auto accident victims this system purports to serve have no trust in it? A stream of coverage in the Toronto Sun and periodic critiques in Law Times haven't been able corral this mess - so it unlkely Paul Schabas at the LSUC will have any luck.

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