Can a contingency agreement be declared void or unenforceable?

Ontario, Canada

The following excerpt is from Hodge v. Neinstein, 2014 ONSC 4503 (CanLII):

Non-compliance with the Act or the Regulations does not make the contingency agreement void or unenforceable. In Simpson v. Laushway Law Office, [2009] O.J. No. 4445 (S.C.J.), Justice Power stated at para. 62: I also agree with counsel for the respondent that the authorities from other provinces with respect to the consequences of non-compliance with an act or regulation are distinguishable. There is nothing in the Ontario legislation that clearly states that a court must declare void, or voidable, or unenforceable, an agreement that does not strictly comply with the Act or Regulation. In the absence of clear language to this effect, a judge's judicial discretion should not be unduly restricted. Indeed, in my opinion, s.24 of the Ontario Solicitors Act clearly bestows a discretion on the court to consider whether an agreement is fair and reasonable between the parties before determining whether the agreement should be declared void. The section says that, even where a declaration is made that an agreement is void, the court may direct that the "costs, fees, charges and disbursements incurred or chargeable in respect of the matter included therein to be assessed in the ordinary manner".

Under sections 23 to 25 of the Solicitors Act, any question respecting the validity or effect of contingency fee agreements may be examined and determined by the court, and if it appears to the court that the agreement is "in all respects fair and reasonable between the parties" it may be enforced by the court in such manner as the court thinks fit; however, if the terms are deemed not to be fair and reasonable, the agreement may be declared void and the court may order it cancelled, directing costs, fees and other charges to be assessed in the ordinary manner, which includes compensation for financial risks assumed, skill, diligence, and success achieved: Du Vernet v. 1017682 Ontario Ltd., supra at paras. 17, 26.

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