{"id":11574,"date":"2020-05-06T20:54:53","date_gmt":"2020-05-07T00:54:53","guid":{"rendered":"https:\/\/360mediations.com\/en\/?p=11574"},"modified":"2025-04-21T21:39:40","modified_gmt":"2025-04-22T01:39:40","slug":"the-all-inclusive-conundrum","status":"publish","type":"post","link":"https:\/\/360mediations.com\/en\/the-all-inclusive-conundrum\/","title":{"rendered":"The All-Inclusive Conundrum"},"content":{"rendered":"<table class=\" aligncenter\" style=\"width: 100%; border-collapse: collapse; border-style: hidden; border-color: #ffffff; height: 543px;\">\n<tbody>\n<tr style=\"height: 543px;\">\n<td style=\"width: 63.6%; border-style: hidden; border-color: #ffffff; height: 543px;\">This article explores the many challenges facing a claimant and their lawyer when their retainer agreement is contingency fee based and offers to settle are expressed in \u201call-inclusive\u201d terms. These challenges include the need to reverse engineer the all-inclusive offer so that it can be broken down into its constituent elements before additional math is required to calculate the contingency legal fee owing to the lawyer, and finally the need to make any additional reductions in order to be able to explain to the claimant what their net recovery will be from the all-inclusive settlement offer. The article concludes with the suggestion that the complex recursive math required to do a proper calculation is best left to a software application, highlighting that one is made available online at\u00a0<a href=\"https:\/\/360mediations.com\/en\/all-in-breakout-mobilecalc\/\">360Mediations.com<\/a><\/td>\n<td style=\"width: 36.4%; border-style: hidden; height: 543px;\"><a href=\"https:\/\/360mediations.com\/en\/wp-content\/uploads\/2020\/03\/The-All-inclusive-Conundrum-PDF.pdf\" target=\"_blank\" rel=\"noopener\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-2626 size-medium\" src=\"https:\/\/i0.wp.com\/360mediations.com\/en\/wp-content\/uploads\/2019\/10\/pdf-icon.png?resize=300%2C300&#038;ssl=1\" alt=\"\" width=\"300\" height=\"300\" srcset=\"https:\/\/i0.wp.com\/360mediations.com\/en\/wp-content\/uploads\/2019\/10\/pdf-icon.png?resize=300%2C300&amp;ssl=1 300w, https:\/\/i0.wp.com\/360mediations.com\/en\/wp-content\/uploads\/2019\/10\/pdf-icon.png?resize=150%2C150&amp;ssl=1 150w, https:\/\/i0.wp.com\/360mediations.com\/en\/wp-content\/uploads\/2019\/10\/pdf-icon.png?w=512&amp;ssl=1 512w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div id=\"pg-11560-1\" class=\"panel-grid panel-no-style\">\n<div id=\"pgc-11560-1-0\" class=\"panel-grid-cell\">\n<div id=\"panel-11560-1-0-0\" class=\"so-panel widget widget_sow-editor panel-first-child panel-last-child\" data-index=\"2\">\n<div class=\"so-widget-sow-editor so-widget-sow-editor-base\">\n<div class=\"siteorigin-widget-tinymce textwidget\">\n<h1><span style=\"color: #6b0b00;\"><strong>Overview<\/strong><\/span><\/h1>\n<p>Loved by defendants, detested by plaintiffs, are the ubiquitous offers to settle that are \u201call-inclusive\u201d of damages, interest, legal fees and disbursements (aka: the \u201c<strong>All-Inclusive Offer<\/strong>\u201d), in cases where the claimant\u2019s lawyer is paid on a contingency fee basis (ie: your typical personal injury claim).<\/p>\n<h1><span style=\"color: #6b0b00;\"><strong>The Conflict<\/strong><\/span><\/h1>\n<p>From the defendant\u2019s perspective, the All-Inclusive Offer is comforting because it represents a fixed sum, without any surprises. Conversely, for a claimant and their lawyer, the All-Inclusive Offer gives rise to many challenges, including a potential conflict of interest. The conflict arises because absent court approval, costs paid by the defence:<\/p>\n<p style=\"padding-left: 40px;\">a) Cannot be kept by the claimant\u2019s lawyer; and<\/p>\n<p style=\"padding-left: 40px;\">b) Cannot be included in the amount upon which fees are paid under a contingency fee agreement;<\/p>\n<p style=\"padding-left: 40px;\">(as per section 28.1 of the\u00a0<em>Solicitors Act,\u00a0<\/em>RSO 1990, c. S.15).<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div id=\"pg-11560-2\" class=\"panel-grid panel-no-style\">\n<div id=\"pgc-11560-2-0\" class=\"panel-grid-cell\">\n<div id=\"panel-11560-2-0-0\" class=\"so-panel widget widget_sow-editor panel-first-child panel-last-child\" data-index=\"3\">\n<div class=\"so-widget-sow-editor so-widget-sow-editor-base\">\n<div class=\"siteorigin-widget-tinymce textwidget\">\n<p>There is a push to have this changed, and allow solicitor-and-client fees to be determined on the gross recovery (or the all-inclusive recovery), primarily to remove the conflict for claimant\u2019s counsel, but that day has yet to come.<\/p>\n<\/div>\n<p>\u00a0<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<figure class=\"wp-block-pullquote\"><blockquote><p>\u2026the All-Inclusive Offer gives rise to many challenges, including a potential conflict of interest.<\/p><\/blockquote><\/figure>\n\n\n\n<p>Some plaintiff lawyers have been known to terminate settlement discussions the moment the defence insists on delivering All-Inclusive Offers with a concomitant refusal to provide a breakdown. Most plaintiff lawyers, however, stick with the negotiations and do their best to workaround the challenges, such as:<\/p>\n\n\n\n<p style=\"padding-left: 40px;\">a)\u00a0<strong>how much to attribute to legal fees<\/strong>? The ratio will impact how much is left for \u201c<em>damages<\/em>\u201d upon which the contingency fee is based;\u2028<\/p>\n<p style=\"padding-left: 40px;\">b)\u00a0<strong>how much to attribute to disbursements<\/strong>? Again, the more the defence pays towards disbursements the less is paid in \u201c<em>damages\u00a0<\/em>\u201d upon which contingency fees will be calculated;\u2028<\/p>\n<p style=\"padding-left: 40px;\">c)\u00a0<strong>how to quickly do the math while your client patiently waits to hear how much will end up in their pocket<\/strong>.<\/p>\n\n\n\n<h1 class=\"wp-block-heading\"><strong><span style=\"color: #6b0b0b;\">The Challenging Math<\/span><\/strong><\/h1>\n\n\n\n<p>Working with an All-Inclusive Offer is a challenging mathematical exercise for the claimant and their lawyer. First the claimant\u2019s lawyer has to \u201cre-engineer\u201d the All-Inclusive Offer to its constituent elements. This is extremely challenging because the damages paid by the defence depends on how much is paid in legal fees by the defence, and how much is paid in legal fees by the defence is a derivative of how much is paid in damages. It requires a lot of math. It is time consuming if done properly. Most lawyers just \u201c<em>fudge it<\/em>,\u201d and simply hope they are never challenged on it.<\/p>\n\n\n\n<figure class=\"wp-block-pullquote\"><blockquote><p>\u2026It requires a lot of math. It is time consuming if done properly. Many lawyers just \u201cfudge it,\u201d and simply hope they are never challenged on it.<\/p><\/blockquote><\/figure>\n\n\n\n<p>Second, once the math is done, and the defence offer is pared down to its constituent elements, the claimant\u2019s lawyer must then calculate what the client has to pay in solicitor-and-client fees (typically the contingency fee rate multiplied by the damages recovered, which is the all-inclusive sum less the legal fees, disbursements, and H.S.T. recovered from the defence).<\/p>\n\n\n\n<p>And finally, once the legal fees have been calculated, and all H.S.T. worked out, the claimant\u2019s lawyer typically continues to apply additional reductions (for such things like the claimant\u2019s outstanding loans, unpaid treatment or medical services, assignments, prior lawyer accounts, a portion of disbursements not covered by the defence, etc), in order to determine for the claimant what their \u201ctake-home\u201d recovery will be. Although the \u201ctake-home\u201d recovery amount should be immaterial, in practice, this figure often ends up being the most important one (to the claimant), and forms the central basis upon which settlement instructions are obtained.<\/p>\n\n\n\n<h1 class=\"wp-block-heading\"><span style=\"color: #6b0b00;\"><strong>The Helpful Work-Around<\/strong><\/span><\/h1>\n\n\n\n<p>Needless to say, the All-Inclusive Offer comes off-the-tongues of defendants effortlessly, but on the claimant side, there is a lot of work to be done before the offer transforms into something intelligible for the claimant and their lawyer.<\/p>\n\n\n\n<p>The task of transforming an All-Inclusive Offer into an intelligible offer for the claimant is ideally done through a specialized software application. &nbsp;A software application that does the math instantly and effortlessly, frees the claimant\u2019s counsel of the cumbersome and time-consuming math during offer exchanges at mediation, or otherwise.&nbsp; Although legal counsel are free to choose the methodology they prefer to use when breaking down an All-Inclusive Offer, 360Mediations makes an \u201c<a href=\"http:\/\/360mediations.com\/en\/all-in-breakout-mobilecalc\/\"><strong>All-Inclusive Breakdown Calculator,<\/strong><\/a>&nbsp;available online, based on the following truths:<\/p>\n\n\n\n<p style=\"padding-left: 40px;\">a) the all-inclusive sum is first applied to cover the claimant\u2019s disbursements, such that the \u201cdamages\u201d (upon which fees are based) will be zero if the all-inclusive sum doesn\u2019t surpass the amount of the claimant\u2019s actual disbursements;<\/p>\n\n\n\n<p style=\"padding-left: 40px;\">b) the defence pays legal fees at the rate of 15% on the first $100,000.00 of assessed damages (which can be modified if you like);<\/p>\n\n\n\n<p style=\"padding-left: 40px;\">c) the defence pays legal fees at the rate of 10% on the damages assessed above $100,0000 (which can be modified if you like). See paper on \u201cResolving Costs at Mediation\u201d for a more detailed explanation of these percentages;<\/p>\n\n\n\n<p style=\"padding-left: 40px;\">d) the term \u201cdamages\u201d includes prejudgment interest; and<\/p>\n\n\n\n<p style=\"padding-left: 40px;\">e) the only vagary for claimant\u2019s counsel is to determine how much of the claimant\u2019s disbursements are being covered (or paid for) by the defence. This sometimes has to be estimated in situations where the defence hasn\u2019t really provided any feedback: the calculator allows the user to input the amount of disbursements notionally paid for by the defence. A good rule of thumb is typically somewhere between 75% and 90% of the actual disbursements.<\/p>\n\n\n\n<figure class=\"wp-block-pullquote has-text-align-left\"><blockquote><p>The\u00a0<strong>on-line calculator provides enormous benefits<\/strong>\u00a0\u2026:<br>\u2026 it is fast,<br>\u2026 easy to use,<br>\u2026 provides results in real-time,<br>\u2026 work out settlement scenarios in advance,<br>\u2026 helps shield the lawyer from any assertion that they were callous with the math, and<br>\u2026 easily see if a modest adjustment of the contingency fee rate yields a good result for both the lawyer and their client&#8230;.\u201d<\/p><\/blockquote><\/figure>\n\n\n\n<p>The on-line calculator provides enormous benefits \u2013 it is fast, easy to use, provides results in real-time, allows the lawyer to work out settlement scenarios in advance, potentially helps shield the lawyer from any assertion that they were callous with the math, and with the use of a slider, the lawyer can easily see if a modest adjustment of the contingency fee rate yields a good result for both the lawyer and their client. &nbsp;The calculator is designed to be mobile friendly so that it can be used on the road, and within a mediation environment.&nbsp; Please enjoy, and any suggestions are welcomed so as to make the calculator most amendable to your day-to-day practice.<\/p>\n\n\n\n<p>LINK: <a href=\"http:\/\/360mediations.com\/en\/all-in-breakout-mobilecalc\/\">http:\/\/360mediations.com\/en\/all-in-breakout-mobilecalc\/<\/a><\/p>\n\n\n\n<p><strong>Authored by: David M. Jos\u00e9 (B.A, LL.B)<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"193\" height=\"56\" src=\"https:\/\/i0.wp.com\/360mediations.com\/en\/wp-content\/uploads\/2020\/02\/image.png?resize=193%2C56&#038;ssl=1\" alt=\"\" class=\"wp-image-2570\"\/><\/figure>\n\n\n\n<p><sup><em>The information in this article or paper is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this paper should be construed as legal advice from 360Mediations, or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter.<\/em><\/sup><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This article explores the many challenges facing a claimant and their lawyer when their retainer agreement is contingency fee based and offers to settle are expressed in \u201call-inclusive\u201d terms. These challenges include the need to reverse engineer the all-inclusive offer so that it can be broken down into its constituent elements before additional math is&hellip; <a class=\"more-link\" href=\"https:\/\/360mediations.com\/en\/the-all-inclusive-conundrum\/\">Continue reading <span class=\"screen-reader-text\">The All-Inclusive Conundrum<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":true,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":false,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[53,17],"tags":[29,237],"class_list":["post-11574","post","type-post","status-publish","format-standard","hentry","category-court-practice","category-damages","tag-david-m-jose","tag-ontario-small-claims-court-personal-injury","entry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The All-Inclusive Conundrum - 360Mediations<\/title>\n<meta name=\"description\" content=\"How All-Inclusive Offers to Settle raise interesting issues for Plaintiffs and their Lawyers during settlement negotiations.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.360mediations.com\/en\/the-all-inclusive-conundrum\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The All-Inclusive Conundrum - 360Mediations\" \/>\n<meta property=\"og:description\" content=\"How All-Inclusive Offers to Settle raise interesting issues for Plaintiffs and their Lawyers during settlement negotiations.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.360mediations.com\/en\/the-all-inclusive-conundrum\/\" \/>\n<meta property=\"og:site_name\" content=\"360Mediations\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/360Mediations-120028596572318\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/360Mediations-120028596572318\" \/>\n<meta property=\"article:published_time\" content=\"2020-05-07T00:54:53+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-04-22T01:39:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/360mediations.com\/en\/wp-content\/uploads\/2019\/10\/pdf-icon-300x300.png\" \/>\n<meta name=\"author\" content=\"David M. 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