Time for contingency fees in family law?

Ending Ontario’s ban on contingency fees in family law cases is probably not the best way to help people who are unable to afford counsel, some Ontario family lawyers say.

“If it comes down to a conversation of access to justice, it’s something that’s great to be thinking about, but I don’t think contingency fees are going to be the right way of going about it,” says Katherine Robinson, an associate at the Shulman Law Firm PC and a member of the Ontario Bar Association’s family law section.

The comments follow a letter recently sent to the provincial government by a group of 11 Greater Toronto Area lawyers who are calling on Queen’s Park to legalize contingency fees in family law matters. A current regulation banning the practice is “severely misguided” and out of date, the lawyers argued. Ontario, the only province in Canada with such a ban, “desperately needs to catch up with the rest of the country,” they suggested.

According to Stephen Durbin, the lawyer who wrote the letter for the group, the current ban works in favour of men who still tend to wield more financial power than women. As a result, they’re able to legally outgun their estranged wives who often are stay-at-home mothers and unable to afford a lawyer to represent them in court.

“The billable hour method contributes to a two-tier family justice system here, and also exacerbates the feminization of poverty. Those fortunate enough to afford to hire lawyers, do. Those less fortunate cannot. Despite improvements made to our legislation over the past decades, women continue to be more likely to suffer the adverse economic consequences of marriage breakdown,” Durbin’s letter reads.

“We have seen this. This needs to stop.”

But lifting the ban, Robinson says, would likely involve both practical and ethical problems. One of the practical difficulties with setting up contingency-fee arrangements in family law, she says, would be determining what constitutes a win given that family law cases typically involve a number of components, some of which aren’t financial.

“Contingency fees do work in other areas of law, but if you start looking at the specifics, if you unpack it in a family law context, how would you apply it?” she asks.

“Even if you’re looking just at the financial issues, you have to parse it down to, OK, what are the different financial issues? But if you’re not looking at the financial issues, you’re looking at custody and access, which is a huge component of family law, and there is no financial component to that. How do you quantify that type of contingency arrangement?”

Ethically, Robinson says, the practice threatens to take money from those, such as children, that family law seeks to protect.

“If you’re looking at child support and then you’re saying the contingency is going to be what — a portion of the child support payment each month? There’s something just inherently wrong with that, with taking money that is specifically directed for the financial support of children. The same argument could be made for spousal support.”

Contingency fees could also lead to conflicts of interest, she says, since such an arrangement might involve only one of the financial aspects of the settlement. Maximizing the settlement in a particular financial aspect to the possible detriment of other areas might be in the lawyer’s best interest but not the client’s, she notes. “It’s not going to fix the problems that already exist within access to justice and that whole issue.”

So if not through contingency fees, how does Ontario solve the problem of access to justice in family law cases? One possibility, says Robinson, may be to increase the income threshold to qualify for legal aid. Another could involve limited-scope retainers that allow clients to seek assistance for particular issues.

“It’s going to be a question of, should there be some combination of these that are going to address the issue or is it going to be some magic solution that no one has come up with yet?” she says. “But I don’t think that contingency fees, with all the inherent confusion and difficulties that would be involved, is that answer.”

Nathalie Boutet, a family lawyer who specializes in mediation, says allowing contingency fees could make the already-highly rancorous family law process even more difficult. It could spur lawyers to be as aggressive as possible in order to make as much money as they can from their cases, she says. “Family law is aggressive enough as it is,” she says.

Boutet says she’s also unsure whether there are in fact more unrepresented women than men in family law.

Julie Macfarlane, a law professor at the University of Windsor who has done extensive research on self-represented litigants, says she believes contingency fees do hold the potential to permit more access to justice but adds that allowing them would require regulation of issues such as how much a lawyer could charge.

Of much better benefit to financially challenged family law litigants, says Macfarlane, would be to allow paralegals to do family law work. “Lifting this restriction would make an enormous difference to many, many people who cannot afford lawyers,” she says.

For its part, Ontario’s Ministry of the Attorney General defended the current ban. “Contingency fees may give lawyers an inappropriate share of often scarce family resources,” said ministry spokesman Brendan Crawley.

“This may have a negative impact on children, in particular, by reducing the amount of money available to maintain them at acceptable levels.”

Moreover, Crawley said, contingency fees would be inappropriate in dealing with aspects of family law, such as divorce and custody and access proceedings, that don’t involve a monetary award and aren’t conducive to settlements in the best interest of the children. “Also, contingency fees could impede the reconciliation of estranged spouses by fueling litigation between them,” he said.

British Columbia, Saskatchewan, New Brunswick, and the Yukon, Crawley noted, now either restrict or demand court approval for contingency-fee arrangements in family law cases.

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