Law Society Of Upper Canada Referral Fee Agreement
When the Federation of Corporations of the Act developed its standard code of professional behaviour, it adopted the Ontario transfer fee rule. Today, the Ontario rule is in effect in all Canadian legal systems. The policy change was recommended in a report by the “Advertising and Pricing” working group to allay concerns about the lack of transparency and proportionality of removal fees. The summons approved a cap on transfer fees based on a percentage of the statutory tax: 15% for the first $50,000 in legal fees and 5% of all legal fees thereafter, at an absolute cap of $25,000. The requirements do not apply to binding removal agreements concluded before April 27, 2017. On the other hand, transfer fees facilitate links between clients and competent lawyers. Good lawyers are not always good distributors and the public does not necessarily know where to find legal services. As a result, many lawyers and clients need transfers. The prohibition of payment of this valuable service may constitute unwarranted interference in the market, provided these payments are reasonable and in accordance with other professional obligations. The above requirements and transparency measures do not apply to binding removal agreements concluded before or on April 27, 2017.
On February 28, 2019, further changes were made to the rules, paragal rules and Law 7 to prohibit the acceptance or payment of transfer fees to lawyers or para-league lawyers who provide legal services through civil society organizations (CSOs), such as charities or non-profit companies. For more information on the reference tax requirements, lawyers and paralegals should review rules 3.6-6.0 to 3.6-6.7 of the Internal Regulations and Rules 5.01 (14) to (20) of the Paralegal Rules. Assistance and Resources For any questions regarding a lawyer`s obligations or ancillary right regarding the acceptance or payment of the transfer fee, please contact the Law Society`s Practical Management Helpline. Concerns about transfer fees peaked in 2016, when a Toronto Star investigation revealed how a well-known battery company had attracted thousands of customers with aggressive marketing and then passed the cases on to other lawyers in exchange for juicy transfer fees. The star revealed that the lawyer who served as the face of the law firm had never attempted a case. The cap and additional regulatory measures were recommended by the Law Society`s Professional Regulatory Committee and the Sand Law Advertising Working Group to allay concerns that certain tariff agreements are misleading or harmful to customers. The convening, at its February meeting, voted in principle to introduce a cap and continue to regulate transfer fees. The task force found that clients often do not know that they are being transferred or that they are being billed for the transfer. It says that transfer fees, which used to be between 10 and 15 per cent, are now between 25 and 30 per cent, and misleading advertising is fuelling the lack of transparency in transfer fees. Home/News/Law Society sets the ceiling on reference royalties and approved transparency measures of conditions have been introduced to prevent abuses.
The dismissal was to be made on the basis of the expertise of counsel for the arbitrator. The transfer fee could not be paid if the referral was made because of a conflict of interest. The transfer fee had to be reasonable and could not increase the total fees charged to the customer. The client had to be informed of the agreement and distribute his consent. The working group will return to the Board of Directors this year – convening – with recommendations on the ceiling and additional requirements to increase transparency in the field of marketing and to ensure genuine agreement on the referral royalty system.