Hardcap & exemption policy
The Annual Billing Limit Policy Framework contains information regarding Legal Aid Ontario (LAO)’s annual billing limit and requests for exemptions.
LAO’s hardcap authority is found in s.3 (2) 7 and 9 of Regulation 107/99 to the Legal Aid Services Act:
- Beginning in the fiscal year 2004-2005, no lawyer shall be paid for more than 2,350 hours of services in a fiscal year.
- The president may authorize payment for more hours of services than paragraph 7 would otherwise allow if he or she considers it necessary to ensure the representation of an applicant. O. Reg. 107/99, s. 3 (2); O. Reg. 180/04, s. 1.
Application & scope
The annual billing limit is based on the lawyers highest tier level X 2,350, regardless of tier level. Legal Aid Ontario (LAO)’s fiscal year runs from April 1 to March 31.
Only dollars billed to LAO that are paid in a fiscal year are included in a lawyer’s annual billing limit. And only the dollars paid for work performed by an individual lawyer are included in his or her annual billing limit. Student or law clerk time is excluded from dollars allocated to an annual billing limit. If a lawyer acknowledges a certificate, but another lawyer performs the work required by the client, the amount billed is included in the non-acknowledging lawyer’s annual billing limit, even though the acknowledging lawyer is required to sign the account because he/she acknowledged the certificate.
Amounts billed in excess of the annual billing limit are disallowed and not paid, although disbursements and amounts billed by other lawyers on the same account are paid. Any unpaid fees cannot be resubmitted for reconsideration or payment at a later date.
Acknowledgement fees usually paid at the time the first account is submitted are disallowed and not paid if a lawyer reaches 100% of the annual billing limit.
The Regional Vice-Presidents and Area Directors are accountable for the certificate budget and responsible for ensuring panel members remain within their hardcap. The Lawyer Services and Payments Department provide Vice-Presidents and Area Directors with panel member hardcap reports to assist them with this responsibility.
LAO strictly applies the annual billing limit contained in the Regulations of the Legal Aid Services Act. In exceptional circumstances, LAO may consider a request for an exemption from the application of the annual billing limit in relation to a particular certificate. Your request must be in writing to the Director, Lawyer Services & Payments, with a copy to the Area Director, and must provide sufficient details to enable a decision to be made. The Director will review your request together with the Area Director and make a recommendation to the Regional Vice-President and President.
The President has authority to grant an exemption. Exemptions are rarely granted and only in one instance to ensure a reasonable limit is placed on annual billing and service quality is not compromised. The expectation is that lawyers will review their billings regularly and adjust their practice accordingly, including not acknowledging new certificates, to avoid exceeding hardcap. Failure to remain within your annual billing allocation may result in non-payment for work done.
The President may consider the following factors when determining whether to grant an exemption:
- What is the solicitor’s panel profile and the opinion of the panel manager, typically the area director, regarding the request? ( A panel profile includes factors such as compliance with administrative billing requirements, history of volunteering with LAO, efforts to save LAO money)
- Is this the solicitor’s first exemption request?
- Is the request a result of a lawyer’s volume of practice or other factors?
- Does the solicitor provide services to a hard to serve client population (e.g., persons suffering from mental illness) where the number of service providers is small?
- How many hours and dollars are being requested?
- Is it necessary to ensure client representation?
- Did unforeseeable circumstances contribute to the lawyer exceeding hardcap? E.g. law partner becoming ill in the middle of long trial
- What efforts did the lawyer make to manage a high volume legal aid practice to avoid exceeding hardcap?
- Is there evidence of a written agreement or contract between LAO and the solicitor that allows for the hardcap to be exceeded?
Appeal from an exemption decision
There is no appeal from the President's decision.
The Lawyer Services and Payments Department will provide regular reports to the Regional VP’s and the Area Director regarding lawyers approaching the annual billing limits.
The Lawyer Services and Payments Department provides an annual report to LAO’s Executive Committee and the Board regarding the annual billing limit, including the number of lawyers that reach their hardcap and the number of requests for exemptions.
Notices are sent to lawyers who reach 50%, 75%, 90% and 100% of the annual billing limit. Lawyers are responsible for monitoring legal aid billings, being in the best position to know the amount billed and paid by LAO. Lawyers must take all necessary steps to ensure they do not exceed the annual billing limit.