- Déc 11, 2020
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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 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. The Law Society – which regulates 49,000 lawyers and 7,900 paralegs – says it imposes transparency and proportionality in transfer pricing rules by setting a cap on the amount that can be charged for transfers and imposing requirements for clients to understand the process. The Law Society plans to set a cap and set new requirements for the costs that a lawyer or civil party may charge for referring a client to another licensee. The new directive, which was adopted in principle in February, addresses concerns about the lack of transparency or benefits to the customer in current transfer fee systems. 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 requirements do not apply to binding removal agreements concluded before April 27, 2017. Lawyers and paralists are required to record in their books and records the transfer fees paid and received and report on the practice of transfer fees in the annual reports they submit to the Law Society. Based on its review of the thoughtful requests of individuals and legal entities on these issues (including the Federation of Law Associations of Ontario), the Committee felt that it would be beneficial to obtain more detailed information on advertising and pricing regimes in Ontario from a wide range of stakeholders, particularly in the area of personal injury. This information would provide additional context to facilitate the Committee`s review of transfer fees, contingency fees, and marketing and advertising issues.
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.