“No Win No Fee” – But what does it really mean?
We see this term everywhere in Compensation Law – “No Win No Fee” but is that what it really means???
When finding a compensation lawyer to run a compensation case, it is really important that you understand the costs involved in your claim. Under a “No Win No Fee” arrangement (sometimes also called a “conditional costs agreement”), you won’t need to pay any money upfront towards your legal bill, but when your case is finished, you will need to pay your lawyer for their time and efforts in resolving your claim.
There are 2 main aspects you need your compensation lawyer to explain: –
- If I win, how are my costs charged?
- If I lose my case, can I be charged?
If you win your case – this means that you received a sum of money for compensation (or damages as we sometimes call them). There are some cases where insurer may pay an amount towards your legal bill. It is usually some but not all of them.
When this happens this means that you become obligated to pay your legal fees when the money is received from the insurance company.
There are 2 parts to calculating your own legal fees: –
- There are your professional legal costs. This is usually charged on an hourly rate for the lawyer and/or their teams work on your file;
- Expenses (or disbursements). These are the costs that the law firm incurs on your behalf during the course of the claim. For example, often we have to obtain a medico-legal report from a doctor about the injuries and consequences of those injuries. These can be quite costly. The law firm will make payment of those costs on your behalf until the successful outcome in your matter.
Another common question that comes up is – can my compensation lawyer take more money than I get ‘ín-hand’?
The short answer is ‘No!’.
“No Win No Fee” agreements must comply with the “50 / 50 Rule”. Under this rule, you must pay back government refunds (like Centrelink or Medicare and others), you must also pay back the expenses (disbursements) to the compensation law firm. After those amounts are paid, the remainder may be split 50/50 with the compensation lawyer and you.
The other misconception is that this rule means the compensation lawyer takes 50% of the compensation amount or some other percentage of the compensation amount. This is actually called a contingency fee. These are prohibited.
If you think your compensation lawyer is proposing to charge on this basis, it is best to seek clarification from them and if you still think this is the case – we would recommend seeking a second opinion.
Then there is the untimely situation where you lose your case?
Well, you don’t need to pay for your own lawyers fees and disbursements under a “No Win No Fee” arrangement. But watch out – if your case goes to Court, a Judge might make an order that you pay the insurer’s legal bill (usually not all of it).
Lawyers offering a “No Win No Fee” agreement will usually explain to you at the outset what they believe your prospects are for winning. It is not a guarantee that you will win, but it can give you some explanation about the case and your probabilities of winning.
It is important to remember also that most types of compensation claims resolve outside of Court. You will be given opportunities along the pathway to resolving your matter to attempt settlement.
Legal costs can be confusing and it is important to understand the basis on which you are being or likely to be charged and the risks you may enter.
So what questions do you ask your lawyer: –
- What is your hourly rate and the hourly rates of your team?
- What is the uplift fee to be charged and the care and consideration fee?
- What are the estimates of the professional legal fees and expenses in my case?
- What are my prospects of winning?
- What might happen if I lose my case?
- Will the insurer contribute to my legal costs?
Our experienced compensation lawyers can assist you by giving you clear advice about your claim and the likely legal costs involved. Contact our experienced compensation lawyers for a no obligation consultation about your compensation matter.
Compensation Lawyers Toowong – (07) 3870 8244
Compensation Lawyers Albany Creek – (07) 3264 7692
Compensation Lawyers Noosa – (07) 5449 7500