Over the past year, the practices of the personal injury profession, especially in the areas of billing, referral fees and advertising, have come under significantly more public and regulatory scrutiny.
The Law Society of Upper Canada has enacted a number of measures already and, at the next benchers meeting on Dec. 1, it is expected to approve the recommendations of a working group related to contingency fees. As well, there has been media coverage highlighting the practices of certain firms and the personal injury profession in general.
Senior lawyers in the field say there is no doubt that the increased spotlight has impacted the reputation of personal injury firms in the eyes of the public.
At the same time, they welcome the reforms enacted by the LSUC and are calling for ramped-up enforcement of what they suggest is a small number of lawyers and firms acting in a manner that damages the personal injury bar as a whole.
“It is a handful of lawyers practising in the grey zone [that] has created problems for the rest of us,” says Paul Harte, Ontario Trial Lawyers Association president in 2014 and a medical malpractice lawyer.
Harte played a leading role in creating an ethical code of conduct in 2015 for members of the trial lawyers organization.
However, he suggests that both the personal injury profession as a whole in Ontario and the regulator should have been addressing these issues earlier.
“To a certain extent, we have only ourselves to blame. We let the problem fester. At the same time, the law society has been playing catch-up,” says Harte, who heads Harte Law in Richmond Hill.
Ron Bohm, president-elect of the OTLA, says there is no doubt that the huge spike in advertising in the personal injury field has an impact when an individual needs to retain a personal injury lawyer.
“It is disheartening that so many people believe that those who mass advertise are the best,” says Bohm, a partner at SBMB law in Richmond Hill, Ont.
Most of the media coverage this year has focused on the “outliers” of the profession, says Barbara Legate, who heads Legate & Associates in London, Ont. These outliers have had a significant impact on the rest of the personal injury bar, she suggests.
“They make it difficult for the rest of us, who are not in the referral business but in the business of practicing law,” says Legate, also a former OTLA president.
Firms that are not primarily litigators and may refer a case to another lawyer at a certain stage are not the problem, says Harte.
“If a firm does not want to take it to trial, that is fine. The law society, though, has to crack down on firms that are effectively law brokerages,” he says.
Many of the measures that the LSUC working group has been addressing since it was formed in the spring of 2016 are aimed at curbing some of the issues raised by personal injury lawyers and also reported on in the media.
In February, benchers approved amendments to the advertising rules for lawyers in Ontario.
The changes include guidelines on what legal awards may be used for marketing purposes.
As well, lawyers and paralegals are not permitted to advertise for work that they are not competent to perform or do not intend to do.
This spring, the law society also adopted measures to put a cap on referral fees.
They are now limited to 15 per cent of the first $50,000 in legal fees and five per cent of any fees above that total. The maximum referral fee is capped at $25,000.
Upfront referral fees, charged before any settlement is reached in a case, have been prohibited. As well, there are requirements to use a standardized form and to provide the client with a choice of referrals.
Bohm says he has some sympathy for the LSUC, which has been criticized for not moving more quickly against lawyers who engage in misleading advertising.
“To be fair to the law society, the whole concept of advertising is a bit new to them. They are now trying to bring in more transparency with the new rules, but they have to enforce them,” Bohm says.
Harte agrees that the regulator of the legal profession in Ontario needs to be more proactive in enforcing the Rules of Professional Conduct that apply to marketing.
“The law society can do more to regulate misleading advertising,” he says.
To date, the LSUC has initiated disciplinary proceedings against at least two personal injury lawyers over marketing practices, since the new rules were enacted.
The notice of application in both cases was filed earlier this fall.
Clearer rules on what kind of advertising is permissible is also welcomed by Legate.
“I would be happy if it could be reined in. It is too bad there is not some way you can legislate taste,” she adds. One of the advertising changes may have “unintended consequences,” though, she says.
The working group has recommended that the maximum contingency fee percentage charged by a lawyer or firm must be posted on its website or conveyed to a possible client during the first meeting.
“I am not shy about my contingency fee,” Legate explains.
“But I represent disabled children, the biggest risk cases. If I lose, I lose big. If I win, the fee is approved by the court,” she says.
In focusing on higher-risk litigation, Legate says her contingency fee percentage may be higher than that of some of her colleagues.
Her concern is the requirement to post the percentage on the firm’s website could have a negative impact in a civil jury trial.
“The first thing a juror is going to do is go to the website” without understanding why the fee is higher, says Legate.
For personal injury lawyers who conduct jury trials, there is a widespread belief that the negative publicity about the profession has had an impact on the odds of a successful outcome for the client in these cases.
“There is little doubt jurors’ perceptions about injured individuals and their lawyers is at an all-time low,” says Bohm.
“The perception is that the client is looking for a lottery win,” he adds. Some work with focus groups confirms this impression, says Harte.
“The jury pool has been tainted by these stories,” he says.
Somewhat ironically, the personal injury lawyers and clients facing the backlash are those who regularly try cases in court and are not necessarily mass advertisers, Harte notes.
Both the LSUC and the personal injury bar have to continue to work together to address consumer protection concerns, says Harte.
As well, he says another measure that would be helpful is the creation of a new specialist designation in the field of personal injury law.
These designations are awarded by the LSUC to lawyers who have met established standards of knowledge and experience in a specific area of the law.
The code of conduct is another one of the steps that the OTLA as an organization has taken to try to ensure best practices by personal injury lawyers and to counteract any negative impression in the general public, says Bohm.
“It has had a great impact. Most personal injury lawyers want to be held to a high standard,” he adds.