Historical Review of the Legal Aid Tariff System in Ontario
It is no mystery that the success of the legal aid system depends on attracting both a sufficient number and quality of lawyers to provide legal services. This, in turn, depends to a large extent on setting an appropriate level of compensation under the tariff. However, as discussed more fully below, the legal aid system has been under-funded for many years and there has been significant decline in both the effective hourly rate paid under the tariff and, consequently, the number of lawyers willing to participate in the program.
Prior to 1951, the delivery of legal assistance to low-income Ontarians was undertaken on a voluntary basis and was viewed as a charitable service by the legal profession. In that year, Ontario's first legal aid statute was enacted: the Law Society Amendment Act, 1951. This legislation provided for the province’s first statutory legal aid plan, authorizing the Law Society to establish such a plan to provide financial assistance to persons in need. Several years later, the Legal Aid Act, 1967 formally established the delivery of legal aid services based on the “judicare” model, whereby certificates would be issued to members of the private bar providing legal aid services and paid by the government, providing the client satisfied the eligibility criteria.
The legal aid tariff in Ontario has always since been set by the government through regulation. When the Legal Aid Plan was established in 1967, the Law Society initially drafted a proposed tariff, setting the fees to reflect the modest fees that would be charged to a client who could pay but for whom the payment of a larger fee might involve some hardship (the “client of modest means”). Upon acceptance by the government, the tariff established two separate hourly rates depending on the court in which the case was to be heard and included some block fees, which would cover certain legal matters in their entirety.
In 1973, the government accepted the Law Society’s recommended increase to the tariff to reflect changes in the Consumer Price Index. The tariff was increased again in 1979, and three separate hourly rates were created, linked to the experience level of the practitioner. The change was intended to encourage more experienced lawyers to participate in the legal aid program.
· Tier I (0 - 4 years) $ 48/hour
· Tier II (4 - 10 years) $ 54/hour
· Tier III (10 years +) $ 60/hour
Early 1983 saw another increase, albeit at an amount lower than that recommended by the Law Society. The government increased the tariff by 5% and appointed a Fact Finder to examine the tariff issue. The Fact Finder recommended a substantial increase in the tariff, concluding that it had failed to keep pace with inflation, the increased costs of running a law practice, and increased incomes in the law and other professional sectors. Over the next several years, the government increased the hourly rates to $67, $75 and $84 for the three experience tiers.
In 1992, the government introduced cost-containment measures, including a soft cap on billings. Although the hourly rate of the tariff was not changed as part of the cuts, the maximum hours allowable for each service were reduced to the level of the average amount billed for that service.
In 1996 the Law Society eliminated all block-fee billing in criminal matters, introduced maximum billing caps on certificates, and implemented stricter client financial eligibility requirements. Additionally, an independent taskforce, the Ontario Legal Aid Review, was tasked with the first comprehensive review of Ontario’s legal aid system since the modern program’s inception. The mandate of the Review was to examine the existing legal aid system in the province and to make recommendations as to its future direction, laying the groundwork for the Legal Aid Services Act, 1998 and the establishment of LAO in 1999.
In April 2000, the LAO board commissioned an independent analysis of the tariff system. The Holden-Kaufman Report concluded that the legal aid tariff at the time was wholly inadequate and recommended a range of hourly rates from $105 to $140. This range reflected both the average hourly rate charged to clients of modest means and an updating of the 1973 tariff rate using both inflation and the increase in the average net hourly income of Ontario lawyers.
In 2001, LAO submitted a business case on tariff reform to the government, requesting an increase in the tariff rate to a range of $85 to $105, based on the Holden-Kaufman Report and additional staff research on lawyer workload, overhead and willingness to accept legal aid work. It is worth mentioning that neither the Holden-Kaufman Report nor the business case resulted in a change to the hourly rate.
In both 2002 and 2003, the Ontario government announced 5% increases in legal aid rates. LAO requested another 5% increase in the tariff rates in 2007. The government subsequently adopted the increase for the stated purpose of ensuring that “a healthy roster of high-calibre lawyers continues to be available to assist low-income Ontarians.”
The current hourly rate paid to lawyers is now between $89.79 and $112.74, depending on the practitioner’s level of experience. The tariff experience tiers are as follows:
· Tier I (0 - 4 years) $ 89.79/hour
· Tier II (4 - 10 years) $ 101.01/hour
· Tier III (10 years +) $ 112.74/hour
While the tariff rate has essentially kept pace with the cost of living since the creation of LAO in 1998, the legal aid bar has continued to be frustrated by the effective loss of the hourly tariff value during the years between the 1979 and 2009. If the 1979 base rates of between $48 and $60 were adjusted for inflation alone, they would be between roughly $140 and $175 in 2009, much greater than even the current 2011 rate.
 Report of the Legal Aid Review, supra note 33, at 116
 Ibid at 137
 Ibid at 7
 Holden-Kaufman Report, supra note 1
 Report of the Legal Aid Review, supra note 33 at 139
 Business Case, supra note 9
 Ibid at 140
 Legal Aid Ontario, 'Tariff and Billing Handbook' updated October 2011, available at http://www.legalaid.on.ca/en/info/downloads/Tariff_Manual.pdf
 Assessment based on the Bank of Canada’s inflation calculator, available at www.bankofcanada.ca/en/rates/inflation_calc.html