Regulating Contingency Fees: A Consumer Welfare Perspective

Forthcoming, Trevor Farrow and Les Jacobs, eds., The Cost and Value of Justice. Vancouver: UBC Press, 2019.

22 Pages Posted: 20 Jul 2017 Last revised: 7 Oct 2019

See all articles by Noel Semple

Noel Semple

University of Windsor - Faculty of Law

Date Written: April 29, 2019

Abstract

How can we preserve and extend what's good about contingency fees, while minimizing the bad and the ugly? In order to identify the regulatory tools best suited to this challenging task, this Chapter proposes a consumer welfare analysis.

The consumers of contingency fee legal services are the individual clients, and the members of classes, represented by law firms working on this basis. These consumers, like other consumers, have interests in:

(i) quality,

(ii) price,

(iii) fairness, and

(iv) choice.

Part 2 of this Chapter will analyze these four sets of consumer interests, all of which are affected by the regulation of contingent fees. Part 3 scrutinizes various regulatory approaches to contingency fees against the consumer welfare criterion. I argue that heavy-handed interventions, such as fee caps and retrospective price review, can do as much harm as good for consumers. "Light touch" alternatives such as disclosure and standardized contracts, and fostering the "invisible hand" of the market, are preferable approaches for a regulators interested in maximizing consumer welfare.

Keywords: contingency fees; access to justice; consumer welfare; tort; class actions; legal services regulation

Suggested Citation

Semple, Noel, Regulating Contingency Fees: A Consumer Welfare Perspective (April 29, 2019). Forthcoming, Trevor Farrow and Les Jacobs, eds., The Cost and Value of Justice. Vancouver: UBC Press, 2019. , Available at SSRN: https://ssrn.com/abstract=2959477 or http://dx.doi.org/10.2139/ssrn.2959477

Noel Semple (Contact Author)

University of Windsor - Faculty of Law ( email )

401 Sunset Ave.
Windsor, Ontario N9B 3P4
Canada

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