How Much Does a Disability Lawyer Cost?

By Matt Lalande in Long-Term Disability on May 01, 2022

How Much Does a Disability Lawyer Cost?

I’ve been denied long-term disability, How much will it cost me to hire a Disability Lawyer?

If you suffer long-term disability and have been denied disability benefits, you may be thinking about working with a lawyer to help with your disability benefit claims – and – if you are, you’re probably on the right track. For someone who has been denied long-term disability, it is absolutely worth hiring a long-term disability lawyer to be your advocate, especially in a time of need. We understand that before hiring a long-term disability lawyer, you will no doubt have any questions, especially if you have never hired a lawyer before.  One of the questions of course is how much does a disability lawyer cost?

Understandably, in the end, many people decide to not call a lawyer because they’re afraid of the high legal costs or fees involved. There’s no doubt that hiring a specialist to advocate for you or litigate a lawsuit can no doubt be very expensive. Disability claims are, in a sense akin to medical legal litigation. There often are complexities involved from a clinical perspective, legal perspective and an insurance perspective. Interwoven within these complexities is – a story. For claimants that have been cut off disability benefits, there’s a story to tell. There’s a story that will seek justice. A story about why the claimant should be entitled to his or her monthly disability payment and why you do in fact, satisfy the definition of total disability. In addition, there are major expenses involved in assembling a proper and complete documented clinical history and hiring independent specialists to provide an opinion in regard to a person’s long-term prognosis. So, technically there are very high legal costs and expenses

Understandably, in the end, many people decide to not call a lawyer because they’re afraid of the high legal costs or fees involved.

Matt Lalande – Ontario’s Long-Term Disability Trial Lawyer

Through television commercials, tv shows or billboard ads, you might’ve heard personal injury lawyer use the term “no win no fee”.  What exactly is a “no-win, no-fee” agreement and can it apply to a long-term disability case?

The answer is yes, in certain situations.

A “no win, no fee” agreement is a contract that allows clients to pay their legal fees AFTER the case is over. In a sense, it means no money upfront for the client, who in most circumstances will be struggling financially since they are not being paid their monthly benefits.  

Quick Facts

How much does it cost to hire a disability lawyer?

Most disability lawyers work by way of contingency fee. Our maximum contingency fee is 30%, although we often charge less if the claim value is less. A contingency fee means we only get paid if we win.

What is the legal meaning of “contingency fee”?

The law society states that if you think you could receive money for your matter, you may be able to pay for yoru legal services on a contingency basis. That means you only pay legal fees if you receive money because you win your case or get a negotiated settlement.

Do I pay HST on contingency fees?

Yes, legal services are a service that must charge and remit HST.

If I settlement my case, do I pay taxes on my settlement?

No, the settlement is your. You do not pay income tax on your settlement. There are cases where the past benefits owed to you might be taxable. In that case, the disability insurer will remit taxes owed on past payments to the CRA on your behalf.

What percentage should a contingency fee be?

Contingency fees can range anywhere from 25% to 33.3%. At our firm, our disability contingency fees range from 25% to 30%. We never charge over 30%, no matter what the case.

What does “No win, no fee” mean?

“No win, no fee” agreements are contracts between lawyers and their clients that allow clients to pay for the lawyer’s services only after successfully winning the case. (In Canada and the USA, these agreements are also referred to as contingency fee agreements (CFA).) In lieu of paying the lawyer’s hourly rates (or a flat rate), the client agrees to pay a percentage of the financial settlement they receive from the case. While the rate that a lawyer will quote in a “no win, no fee” agreement will vary, it will between law firms, usually be between 25% and 33.3% of the total award.  Our Ontario disability lawyers never charge over 30% of the total award.

“No win, no fee” agreements are usually offered by lawyers working on cases that involve some sort of financial settlement or situation where their client might receive some money (e.g. disability benefit claims). Lawyers who are working on cases related to family or criminal law are not allowed to use “no win, no fee” agreements. 

“No win, no fee” agreements in Ontario

As of July 1st, 2021, to enhance consumer protection, lawyers in Ontario became required to follow the Law Society of Ontario’s guidelines when it comes to contingency fee agreements, including the mandated use of a standardized form when entering into a CFA with a client. (“Standard Form Contingency Fee Agreement dated November 18, 2021.”) The Law Society of Ontario has also published a guide about Contingency Fees (“Contingency fees: What you need to know”) for prospective clients that lawyers must make available to clients and confirm their understanding.  You can find the law society’s guideline by clicking here.  All lawyers need to provide this booklet to their clients to read BEFORE they enter into a contingency agreement to ensure that they fully understand the process.

What are the advantages and disadvantages of “no win, no fee” agreements?

You get access to Hamilton’s Best Disability Lawyers: The advantage of entering into a “no win, no fee” agreement with your lawyer is that you, as the client, would be able to secure the services of a disability lawyer – a specialist –  without paying for their fees out of pocket. It means that you’re able to secure quality representation to obtain justice and compensation. In the event that the lawyer loses the case for the client, this agreement also means that the client is not liable for paying back legal fees to the lawyer. 

The option to delay paying legal fees until you have won your case and received your settlement means that anyone can have access to a legal professional who can help take on their case. You can have access to the best disability lawyers in Ontario, who understand long-term disability law and who have litigated disability cases for years. Contingency fee agreements also help to assure clients that the lawyers are incentivized to secure the greatest financial settlement for them, which is something that is mutually beneficial under this agreement. 

It means little financial risk to you: With contingency fee agreements, disability lawyers are taking on all of the financial risk by litigating your case with no fees upfront. This means there is little financial risk to you.

There is incentive for your lawyer to fight harder: remember, there is never any guarantee of a successful outcome when the case. If you meet a lawyer that provides you with a guarantee of success, we would advise to start looking for other lawyers to represent you. However, with a no-win, no-fee agreement disability lawyers are incentivized to drive a case forward with quickly and with successful resolution or trial outcome. Remember, the more money recovered either for past benefits owed, or for the future stream of benefits, the more money the law firm will make in the end as well. Fierce advocacy is not uncommon with no-win, no-fee agreements.

How are contingency fees decided?

All disability benefits lawyers in Ontario must follow the same guidelines when it comes to contingency fee agreements. The percentage fee must be reasonable for the services rendered, with the maximum amount no higher than the total amount of the settlement. Aside from these guidelines, lawyers are free to set their percentage fee, which is decided considering many factors:

  • whether or not there is potential for a large settlement.
  • the risk of not being able to win the case.
  • the amount of time that will need to be spent on the case.

It’s always advisable to visit a number of lawyers and compare what percentage each lawyer is asking for before deciding to enter into a contract with any lawyers. 

Any details regarding fees should be clearly stated in any contract that is provided by a lawyer. There should be total clarity about what sort of costs are involved when entering into a “no win, no fee” agreement with a lawyer. 

How are contingency fees calculated?

Imagine that Canada Life terminates your non-taxable benefits. You retain our Hamilton disability Law firm to represent you. At some point during the case, your disability lawyer and Canada Life legal counsel might come to a resolution on a payout for your future stream of benefits.

Imagine that Canada Life and your disability lawyer agree to resolve your case for $100,000, plus a 10% contribution to your legal costs or $10,000, plus a contribution of another $10,000 to be paid towards your disbursements – or expenses incurred by our Hamilton Disability Law firm to prove your case. Your total settlement therefore would be $120,000.

Then, Canada Life pays the $120,000 to Lalande Personal Injury Lawyers in trust in full resolution of your disability claim.

The contingency fees are calculated as follows:

  • Settlement Amount:    $120,000
  • Less Disbursements Incurred: $10,000
  • Less Legal Fees (25% of $110,000, being the amount paid less disbursements): $27,500
  • Less HST on Fee of $27,500: $3575
  • Client will receive: $78,925 payable to them, tax free.

Remember, this is simply an example. At the end of the case, client will receive a full detailed statement of account, outlining every disbursement incurred, so they know exactly where every dollar in the case was spent. Every case is different – for example, some benefits are taxable, some resolutions only involve having your monthly payments reinstated and past benefits paid out by way of lump sum, ect.

After winning a case: receiving the settlement after a “no win, no fee” agreement.

After the case has been successfully settled, any financial award is paid out to your disability lawyer in “trust”, who will be responsible for keeping it safe for the client. “In trust” means that the monies are deposited in a special trust account, which is a separate bank account that your disability lawyer must maintain when the he or she receives and holds money on behalf of clients or third parties.

Remember, a disability lawyer has a very high level of responsibility to the person he or she represents.  In this role, a disability lawyer will receive funds, by the disability insurance company after the case is over (assuming success) that belong to a you, as the client. Your disability lawyer must place the funds in his or her trust account, to be held, until the billing of account. The funds are not allowed to be touch by the lawyer until the account has been rendered and the funds have been paid out to the client.

Then, the client is entitled to receive a statement account for legal services rendered. Our disability lawyers provide a full statement of account which outlines every cent spent, received, and payable to the client. Our statement of account is understandable, transparent and in the end, our clients know exactly where money was spent on their case, understand legal fees for services rendered, and understand the final amounts payable to them, at the conclusion of the case.

Things to do before entering into a “no win, no fee” agreement

  • Hire local: it’s quite difficult to find a disability specialist in every city, but if you can, try your best to hire local. Our Hamilton disability Law firm serves clients all over southern Ontario.
  • Research the disability lawyer: Ask family and friends if they have heard of them. Read online reviews to learn more about past cases and how successful the lawyer has been. 
  • Understand how contingency fee agreements work in Ontario (or your region): Be clear about the insurance and legal legislation in your area before you speak with a lawyer. 
  • Read the contract carefully: When speaking with the lawyer, you will receive a copy of the CFA contract, which will detail everything from fees and costs to the lawyer’s range of responsibilities and services. Although it may be a lot of information to take in and process, you should fully understand the contract before signing it, to avoid any disappointment or misunderstanding between you and the lawyer. 
  • Read the Law Society publication : Contingency Fees: What you need to know.
  • Call disability lawyers and ask them what their fee is: : Even if you feel positive about the first lawyer you visit, it is always advisable to visit an additional 2-3 lawyers and see what percentage they are asking for, in order to confirm that you are receiving a fair offer. 

Are you thinking about hiring a disability lawyer?

If you have been denied disability benefits we can help. Our disability lawyers have been representing claimants who have been wrongfully denied their long-term disability since 2003. Working with our disability lawyers means moving one step closer to securing the financial compensation that will help you focus on your future without worry.

Call us today, no matter where you are in Ontario, at 1-844-LALANDE or local in Southern Ontario, at 905-333-8888 today. Alternative, you can contact us through our website, confidentially and we would be pleased to get back to you promptly to discuss your long-term disability issue.

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