The No Win-No Fee agreement provides people access to professional legal representation without the upfront costs. Individuals who have sustained a personal injury deserve a ‘fair go’ and should not be denied legal support due to their financial circumstances. However, legal professionals are under no obligation to accept a No Win-No Fee claim but will consider each case on its legal merit.
As per the LEGAL PROFESSION ACT, 2007, QLD1, No Win-No Fee costs agreements may also be referred to as ‘speculative’ or conditional arrangements whereby, part of, or all costs will become payable once a successful outcome is achieved.
Guiding Principles in a No Win-No Fee Arrangement
A lawyer will consider all the details of your case, and several factors may impact their decision to provide legal representation such as:
● Are realistic and achievable results possible?
● Does the claim have legal merit?
● Does the client lack the financial resources required to take legal action without a No Win-No Fee arrangement?
● Is the client fully aware of all associated risks in the case of a ‘No Win’ scenario whereby the client is liable for paying the other party’s costs?
The answers to the questions above will determine a law firms decision to offer legal representation and a No Win-No Fee agreement.
How Much Is A No Win-No Fee Likely To Cost Me?
Fees in a No Win-No Fee arrangement are calculated on a case-by-case basis, and several factors can impact the final cost of legal services such as:
● The complexity of the case.
● The severity of the accident or injuries sustained.
● How accommodating the other party is to requests.
● Delays in obtaining vital information.
Section 347 of the LEGAL PROFESSION ACT, 2007, QLD 2, ensures that an injured party/claimant receives their fair share of the damages awarded. In the case of personal injury claims, the rule caps the amount that a lawyer is allowed to charge their client. The Legal Services Commissioner (LSC) clarifies by stating that lawyers are not permitted to charge their clients any more than half of the net settlement to what a client is entitled to after deducting refunds and disbursements for which the client is liable. Also known as the 50/50 rule, conditional cost agreements safeguard a client from being overcharged and ensure that a lawyers fees, inclusive of GST, do not exceed half of the balance of settlement. The ‘No Win-No Fee’ agreement alludes to a client not having to pay any fees in a ‘No Win’ situation; however, despite the loss, the client may still have to pay the other party’s’ associated legal costs.3
Law firms fully understand the risks of entering into a No Win-No Fee agreement, and while they may not be permitted to charge a client for their services, they are entitled to recover any outlays upon final judgement. Lawyers may pay any costs incurred as the matter progresses and recover all monies owed, plus interest, once the case is settled. Occasionally, a client may be asked to enter into a litigation loan agreement to cover the cost of outlays. This type of agreement is separate to a No Win-No Fee agreement, and this type of loan often carries significant interest charges and other fees. The litigation loan and all interest must be paid off once the matter is settled.
It is highly recommended that you read and understand the terms of your agreement before signing. If you are unsure about any of the terms, you should request clarification and obtain a second professional opinion if necessary. No Win-No Fee agreements are subject to a five-day cooling-off period, and this would be the best time to get independent advice. A second opinion would ensure that you fully understand the arrangement and the associated consequences in the event of a loss.