Ontario lawyers will no longer be able to take sky-high fees when they refer clients to other lawyers and they can no longer advertise for services they don’t intend to provide.

The Law Society of Upper Canada voted 35 to 9 at a meeting Thursday in favour of capping fees, rejecting a proposal to ban them outright.

The meeting, made up of lawyers who are elected “benchers,” also accepted recommendations released earlier this week by the law society’s Advertising & Fee Arrangements Issues Working Group that will give lawyers clearer guidance on what type of marketing breaks the rules — such as citing paid-for awards that are not genuine indicators of quality, or using “sexually offensive” marketing material to lure clients.

The law society will also prohibit lawyers from using “bait and switch marketing” — that is, attracting potential clients with services, prices or terms different from those ultimately provided. While the meeting did not single out a particular type of lawyer, the new policies will most often apply to personal injury lawyers.

Details of the cap have yet to be hammered out — they could be ready by April — but the working group’s recommendations suggest that referral fees be dramatically reduced, possibly to a maximum of 5 per cent to 10 per cent, and made transparent. Clients would have to consent in writing to a fee, be given a choice of lawyers to represent them and be able to decline the referral.

Malcolm Mercer, chair of the law society working group, said Thursday’s policy changes mean that “injured people in Ontario will be better protected by ensuring they have the information to make the choices that are in their interest.”

He said regulation and capping of fees, rather than an outright ban, could allow for “innovative and useful services to emerge and evolve.”

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Thursday’s vote comes on the heels of a Star investigation into the referral fee and marketing practices of Ontario’s personal injury lawyers.

In one story, the Star looked at law firm Diamond & Diamond and found that for many years it has been attracting thousands of would-be clients and then referring cases out to other lawyers in return for sometimes hefty referral fees. Along the way, the firm’s marketing, which has included women in tight T-shirts and ads above urinals at the Air Canada Centre, has raised the ire of the law society, clients and some lawyers. Diamond & Diamond maintains it has a growing number of lawyers working on cases at the firm, but would not say how many cases are referred out.

In another story, the Star showed that the world of personal injury advertising is like a “wild west,” with many lawyers apparently breaking rules designed to prevent false and misleading marketing. The Star found that more than two dozen Ontario personal injury law firms described themselves as the “best” or “No. 1.”

The Star also found that for years, lawyers working on contingency for accident victims — “you don’t pay unless we win” — have been “double dipping,” taking more money from their clients than the law allows. As a result, the Star story said, many Ontario residents have been overcharged thousands of dollars and likely do not know it.

The vote at the law society’s Thursday meeting, a monthly event called Convocation, did not address concerns about contingency fee agreements, but the working group continues to explore that issue.

Some critics of the policy changes the law society voted to adopt say that referral fees and misleading advertising are symptoms of larger issues with the contingent fee system, which could only be changed through legislation.

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Some also argue that the new policy changes won’t put an end to so-called brokerage houses — firms that draw in clients with flashy ads only to refer them out for a fee to lawyers at different firms, often without the client’s consent. Those types of firms will find a workaround by restructuring or charging fees elsewhere, they say.

Hearty debate about whether to ban or cap referral fees filled a law society boardroom prior to the vote. Those in favour of a cap suggested referral fees are in the public interest because they ensure lawyers don’t keep cases they are not competent to work on. Others, such as lawyer Michael Lerner, said that referring out cases is part of a lawyer’s professional obligations and he finds such fees offensive.

“I have a great deal of difficulty paying someone for doing the right thing,” Lerner said.

In a written statement to the Star, Adam Wagman, president of the Ontario Trial Lawyers Association, called the new policy changes “a clear step in the right direction,” but said he hopes the new rules come with a commitment to increased enforcement.

Paul Harte, past president of the association, which represents about 1,600 personal injury lawyers, clerks and staff, said that the current rules regarding advertising were sufficient and adding guidance may not achieve compliance.

Law society rules state that advertising for lawyers’ services must be “demonstrably true, accurate and verifiable” and cannot be “misleading, confusing or deceptive.” Marketing must also be “in the best interests of the public” and “consistent with a high standard of professionalism.”

Cracking down on bad behaviour is key to curbing the use of misleading advertising, Harte said.

“If you want to deter behaviour. there have to be consequences to rule-breaking. Someone needs to be disciplined.”

When asked about enforcement, Mercer said the law society is currently investigating about 90 cases of advertising and referral fee complaints involving lawyers from various firms across Ontario.

He also said that Convocation deals with policy, not prosecution, and “it’s not for us as policy-makers … to comment on those issues.”