How to read an Ontario legal invoice

Four sections most invoices share

A typical Ontario legal invoice is organised into four parts: professional fees for the work done; disbursements (money the firm paid out on the client's file); HST; and any credit for money held in trust. Understanding each part makes it easier to check whether the total is right.

Fees

Fees are billed on an hourly rate, a block fee, a contingency percentage, or a combination. The invoice or the covering letter should say which basis applies. Hourly bills usually attach a time docket. Contingency invoices come from a written contingency-fee agreement that the Solicitors Act requires.

Disbursements - agency versus non-agency

Disbursements are grouped by whether the firm paid them as agent for the client (agency - no HST re-charged) or for the firm's own account (non-agency - HST re-charged). Court filing fees, land registration fees, sheriff fees, and witness fees are typically agency. In-house photocopying, couriers, phone charges, and searches the firm ordered on its own account are typically non-agency. See the CRA sources below for the underlying rule.

HST

HST at 13% applies to the fees plus the non-agency disbursements. Agency disbursements pass through without HST because the client is treated as having paid them directly. Some legal services (for example, certain services to non-residents) are exempt or zero-rated; the invoice should say if that is the case.

Trust retainer

Money the client paid to the firm's trust account is applied against the invoice with the client's authority. The invoice usually shows the trust balance before and after the transfer, so you can see how much retainer is left after the bill is paid.

Questions to ask before you pay

• Is the fee basis (hourly, block, contingency) clearly disclosed?
• Are any disbursements you were not expecting explained?
• Is HST charged only on fees and non-agency disbursements?
• Does the trust balance shown match the last statement you received?
• Is the total consistent with the retainer or engagement letter?

If a line item does not make sense, ask the firm for a plain-language explanation before you pay. If a dispute cannot be resolved, the Solicitors Act provides an assessment procedure.