No Win No Fee Explained
Most compensation lawyers will offer No Win No Fee cost agreements.
It’s important to make sure you understand how your lawyer will charge legal costs, how much will be charged and when the legal costs are payable.
If you sign a costs agreement without first understanding the terms, you may end up with a very large legal bill!
What is NO Win No Fee?
“No Win No Fee” (NWNF) is the consumer term for what can legally be described as a Conditional Cost Agreement (CCA).
A CCA is an agreement between you and your lawyer. It is agreed that you do not pay any legal costs or disbursements unless an agreed condition is met.
With NWNF agreements, that condition is normally that the claim for compensation is successful.
Whether or not your claim is “successful” will depend on the definition of a "successful claim" in the costs agreement.
In most cases a “successful claim” is one where money is obtained for the client from the settlement or determination of a claim for compensation.
When are legal costs payable?
Legal costs are payable by you when the claim is successful. When you receive the money for your compensation the legal costs will need to be paid.
All the legal costs and disbursements payable to your lawyer will be payed from the compensation you receive at the end of the claim.
You are not required to pay any legal fees to your lawyer unless your claim is successful.
How is the amount of legal fees calculated?
The CCA will outline how much you have to pay in legal costs.
Lawyers normally charge an hourly rate although some charge a lump sum amount agreed before the commencement of the claim.
You must be careful you understand how legal costs will be charged before you sign a CCA.
The compensation you receive will include a payment for legal fees from the defendant (usually an insurance company).
The amount that the insurance company is required to pay for legal fees varies but is usually around half to two thirds of your lawyer's total legal costs and disbursements. This however can vary depending on the type and nature of your claim and how much compensation you obtained.
What happens if my claim is not successful?
If you are unsuccessful in your claim for compensation, then you do not need to pay your lawyers legal costs.
You may be required to pay your lawyers disbursements that is, the cost of things such as interpreter's fees, court fees, medical reports, expert fees and the like. This will depend on the agreement with your lawyer.
If you are unsuccessful in your claim you will be required to pay the legal costs of the defendant.
So whilst you don’t pay your own lawyers legal costs you still need to pay the other sides lawyers legal costs.
The winner always pays the losers legal costs!
There is always the risk that if you are unsuccessful you will need to pay the other sides legal costs. This must always be considered before you start any claim.
How will my lawyer charge legal fees?
This varies from lawyer to lawyer. Some lawyers charge an hourly rate and some charge an agreed lump sum amount at the beginning of the claim.
If your lawyer charges an hourly rate you need to be careful. It is not uncommon for lawyers to charge $450 to $550 per hour. Normally with hourly rates you have no way of knowing how much the legal costs will be at the end of the claim. How many hours will the claim take?
You have no way of knowing and the lawyer is unlikely to give you an estimate. Even if they do, it is an estimate only and it may be way off in the end.
In my view charging an hourly rate is a conflict of interest between the client and lawyer. The client would like the claim to be simple and straight forward and be completed in the quickest time possible for the best result. The lawyer however who is charging by the hour makes more money the longer the claim takes and the more complex it is, so the more hours he can charge.
98% of the time I charge a lump sum amount agreed to upfront based on the value I can provide to my client. It shouldn’t matter how long it takes as long as I achieve the best result for my client. Sometimes I can do that quickly and efficiently.
Charging a lump sum aligns both my interest and the clients so we are working together for the best result.
What is not No Win No Fee?
Some law firm use outside companies to fund payment of their legal costs and disbursements. A private company will pay your lawyers legal fees (no matter if the claim is successful or not) as the claim proceeds.
The law firm requests that you contract directly to the private company on what appears to be a No Win No fee agreement however the agreement is with the private company not the lawyers.
Be careful of such agreements and make sure you understand how you are being charged. Sometimes these agreements can have hidden costs and charge a percentage of what you receive as compensation.
Lawyers are not allowed to charge a percentage of what you receive in compensation, this is known as a contingency fee and is illegal in NSW.
What is Pro Bono?
Pro Bono is legal services provided for free.
NWNF agreements are not free legal services, you are still required to pay legal costs. Payment is just conditional on the claim being successful.
Access to Justice
By providing NWNF cost agreements this allows every day Australians access to justice. Currently the legal system in Australia allows only the very rich or very poor who may qualify for government help to pursue a claim. This is because most lawyers charge an hourly rate payable at the end of each month whether you win or lose. That is expensive and requires a lot of money.
NWNF agreements allows everyday people access to justice that they rightly deserve and would otherwise not be able to afford.
If you would like further information, please contact us on (02) 85181120 or contact us at firstname.lastname@example.org
*Garling Lawyers provide no win no fee cost agreements in most types of compensation claims however conditions do apply.
Accredited Specialist in Personal Injury Law.
BONUS MATERIAL……for reading this far!
How do I know if my lawyer is any good?
Lawyers are not all the same. There are good lawyers who are smart, do the work required to get a great job for their client and charge reasonable legal fees. The bad ones generally take short cuts, are not genuine experts and can charge significant legal fees.
How do you know who to trust?
There is one easy way to tell if the lawyer knows what they are doing and can be trusted.
The answer is surprisingly simple……
You should only use a Lawyer who is an Accredited Specialist in Personal Injury Law. As approved by the Law Society of NSW.
Only the best lawyers in their field are approved by the Law Society as Accredited Specialists. A lawyer must pass an examination process to test their knowledge of injury law. They must also pass a peer interview by senior lawyers.
Accredited specialists only practise in personal injury law so are up to date on the changing NSW laws.
Only those lawyers who are truly experts in their area of law are granted accreditation.
It’s the lawyer who is accredited not the law firm!
It is also important to understand that it is the lawyer who is gets accreditation not the law firm. Law firms will advertise that the firm are accredited specialists. Most likely it will be the senior partner who is accredited. The other 10 lawyers in the firm who do the day to day work on the case are not accredited. They use your claim to gain experience.
You need to make sure that the lawyer who is acting on your behalf on a day to day basis is an accredited specialist. If not, you do not have the best lawyer for your claim.
So, the most important question you need to ask is;
Are you (the lawyer who is handling the case on a day to day basis) an Accredited Specialist in Personal Injury Law?
If not change to a lawyer who is and make sure that lawyer is the one actually doing the legal work on your claim. This is very important.
It is the only way to determine if your lawyer has the necessary skill and expertise to get the best result for you. The Law Society of New South Wales allows lawyers who are accredited to advertise the law society's specialist accreditation logo.
If your lawyer isn't an Accredited Specialist, then you have the wrong lawyer.
GARLING AND CO 2016