What Does “No Win No Fee” Mean?
The general definition of “no win no fee” is quite simple. The lawyer takes on your case and if you do not succeed or “win” your case, you are not charged any fee (i.e. legal costs and disbursements). Attwood Marshall Partner and Law Society Accredited Specialist in personal injury law, Jeremy Roche discusses this often misunderstood term.
It does not mean that the lawyer will not charge you anything for the case if you win! When/if you do win your case and receive an award of damages or compensation, you must then pay the lawyers their agreed costs and disbursements involved with prosecuting your case. The amount of these costs will be determined by a Costs Agreement that is entered into between you and your lawyers. Obviously these costs will vary depending upon the type of case, whether it proceeds to trial and the amount of compensation that you receive. There are many different ways lawyers charge their fees (e.g. hourly rates, lump sum fee agreements, court scale fees etc.). In many no win no fee matters, lawyers charge an ‘uplift fee’ which can be up to 25% of the amount of their usual professional costs.
Most Lawyers cover the costs of paying for any out of pocket expenses or disbursements associated with the case – e.g. court filing fees, expert report fees, medical report fees, travel & accommodation etc. Sometimes these outlays can be significant, especially in a large case. These need to be repaid at the end of the case. Some lawyers take out ‘litigation loans’ to cover these expenses and charge the clients the interest (usually at very high rates) – you should ask about this before you engage a lawyer. Attwood Marshall do not litigation loans.
Do Lawyers charge a percentage of my claim?
Lawyers in Australia cannot charge ‘contingency fees’ like they do in the USA. Most lawyers over there charge a set percentage of the total amount recovered (e.g. 30%-40%). It is different here and the only restriction in QLD is for personal injury claims – the ‘50/50 rule’ S. 347 of the Legal Profession Act QLD (LPA) provides that the lawyer cannot charge any higher than 50% of the net amount received by the client (excluding statutory refunds, and disbursements). The Queensland Law Society has published a guide.
Do you recover your legal costs from the other side if you win?
Not always – in certain areas the costs you recover have been completely removed or capped by legislation as to the amount. There has always been a shortfall in what your lawyers charge you and what you recover anyway – historically this difference in costs has been around 40-50%. For example, if your legal costs are $50,000, you may only recover $25,000. In QLD WorkCover matters, there are virtually no costs recovered up to and including the Mediation or Compulsory Conference.
What type of cases qualify for “no win no fee” terms?
“No win no fee” is usually restricted to cases where you are going to receive an award of compensation or damages at the end of the case. It is also very important that the person or company that your case is against has the ability to pay for any Judgment or settlement amount! Criminal and Family Law matters are specifically excluded from this type of fee arrangement under S.323(2) of the LPA.
If you are not going to receive money at the end of your case, there is no basis or incentive for the lawyer to take on your claim on a “no win no fee” basis. If the lawyer took on a case where no money was payable, even if they win your case they cannot be paid!
Accordingly, the types of types of claims that usually qualify for a “no win no fee” arrangement are:-
- Most compensation claims;
- Estate Litigation contesting Wills;
- Professional negligence claims where indemnity insurance is held and covers the event;
- Consumer or building claims against large companies that have the financial ability to meet any settlement or judgment;
- Certain commercial litigation claims against large companies or defendants where it is guaranteed that the defendants can satisfy a judgment or settlement;
- Claims against banks, large financial institutions or governments where the client has suffered significant damages and the likelihood of recovery is excellent;
- Certain Class Actions.
NB: This list is not exhaustive. Please check with us to see if your claim may qualify by contacting our Department Managers.
The QLD Legal Services Commission have an information sheet on ‘no win no fee’ here.
If you require any further information about Compensation Claims please do not hesitate to contact Department Manager Casey Reedyk on direct line 07 5506 8220, Freecall 1800 621 071 or email: [email protected] for a free initial consultation and discuss our ‘no win no fee’ terms. We have a dedicated team of lawyers who specialise in this area of law and practice exclusively in compensation claims.
Please click here to access our team brochure with details of our professional staff.