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Considering legal action but worried about the costs? Understanding what ‘No Win No Fee’ truly means could be the difference between pursuing justice and letting it go. This payment structure has revolutionised access to legal services in Australia, particularly for those who couldn’t otherwise afford representation. If you’re contemplating legal action, you might want to consult with lawyers who work on a no win, no fee basis to understand if this arrangement suits your situation.
Key Takeaways
- No Win No Fee arrangements mean you typically don’t pay legal fees unless your case succeeds
- Disbursements (expenses like court fees and expert reports) may still be payable regardless of outcome
- Always get the agreement in writing and understand exactly what constitutes a “win”
- Check who pays the opponent’s costs if you lose (adverse costs)
- Compare offers between lawyers using example settlement scenarios
What ‘No Win No Fee’ means in Australian practice
In Australia, ‘No Win No Fee’ is a type of legal fee arrangement where clients don’t pay lawyer’s professional fees unless their case succeeds. These arrangements go by various names including conditional costs agreements, conditional fee agreements, or contingency arrangements.
The rules governing these arrangements differ across Australian states and territories. For example, in NSW and Victoria, lawyers cannot charge percentage-based fees on damages recovered (unlike in the US), while Queensland allows regulated contingency fees in certain circumstances.
These arrangements are commonly offered by personal injury lawyers handling cases such as motor vehicle accidents, workplace injuries, medical negligence, and public liability claims. They’re less common for family law, criminal matters, or complex commercial litigation.
How a No Win No Fee arrangement typically works
In most arrangements, fees become payable only when you receive compensation – either through court judgment or settlement. A “win” typically means any financial compensation, regardless of the amount.
Most Australian lawyers charge an hourly rate plus a potential “success fee” (an additional percentage of their standard fees) rather than a percentage of your compensation. This success fee is regulated and capped in most states.
Disbursements are expenses your lawyer pays to third parties on your behalf, including:
- Medical report fees
- Expert witness costs
- Court filing fees
- Barrister’s fees
- Administrative expenses
While professional fees might be conditional on winning, responsibility for disbursements varies between agreements. Some firms cover these costs entirely if you lose, while others require you to reimburse them regardless of outcome.
“A properly structured No Win No Fee agreement should clearly outline what happens to disbursements if the case is unsuccessful – this transparency is essential for clients to make informed decisions about proceeding with their claim.” – Conrad Curry
Costs risk and who pays what if you lose
If your case fails, the “No Win No Fee” typically covers only your lawyer’s professional fees. There are two other potential costs to consider:
First, the court may order you to pay the winning party’s legal costs (adverse costs). This can be substantial – sometimes exceeding your own legal expenses. Some firms offer protection against this through After-the-Event insurance or indemnity agreements, but this isn’t universal.
Second, you may still be liable for disbursements paid during your case. Read your agreement carefully to understand if you’ll need to reimburse these expenses even if you lose.
What counts as a “win”: definitions and edge cases
The definition of a “win” varies between agreements. Most commonly, it means receiving compensation either through settlement or court judgment. However, the details matter:
For settlements, most agreements consider any compensation a win, regardless of amount. This can be problematic if the settlement barely covers legal costs.
In cases with partial success (where you win some claims but lose others), your agreement should specify how fees are calculated. Some lawyers charge proportionally based on successful elements of your claim.
If you withdraw your claim or the lawyer terminates the agreement, many contracts still require payment for work already completed. Check these clauses carefully before signing.
Questions to ask before you sign
Before committing to a No Win No Fee arrangement, ask these specific questions:
What exact percentage or uplift will apply if successful? Ask for worked examples showing fee calculations on different settlement amounts.
Who pays disbursements if the case fails? Get clarity on exactly which expenses you might be responsible for.
What happens if you want to change lawyers mid-case? Understand termination clauses and potential costs.
Always request a written costs agreement and take time to seek independent advice if anything is unclear. Legal costs agreements can be complex – don’t rush your decision.
Red flags and how to compare offers
Watch for these warning signs in No Win No Fee proposals:
Vague language about fee calculations, verbal-only agreements, or unexplained third-party costs. Any reluctance to provide a detailed written agreement should raise concerns.
When comparing offers between lawyers, request estimates based on specific settlement amounts (e.g., $50,000, $100,000, $250,000) showing all deductions and your net recovery under each scenario.
Verify the lawyer’s credentials and experience in your specific type of case. Check their registration with the state law society and seek client reviews or testimonials about similar cases.
Practical examples and worked scenarios
Example A: In a straightforward motor vehicle accident claim settling for $100,000:
– Legal fees: $30,000 plus 25% success fee ($7,500) = $37,500
– Disbursements: $5,000
– Total deductions: $42,500
– Client receives: $57,500
Example B: In a complex medical negligence case with high disbursements settling for $500,000:
– Legal fees: $120,000 plus 25% success fee ($30,000) = $150,000
– Disbursements: $80,000 (multiple expert reports, extensive medical evidence)
– Total deductions: $230,000
– Client receives: $270,000
These examples highlight how varying complexity and disbursement levels impact your compensation.
How to protect yourself and next steps
Always get your No Win No Fee agreement in writing, including:
– Clear definition of what constitutes a “win”
– Exact fee calculation method
– Responsibility for disbursements
– Obligation for adverse costs
– Termination conditions
Don’t hesitate to seek a second opinion from another lawyer or contact community legal services in your state for free advice.
Throughout your case, maintain thorough records of all communications and documents provided to your lawyer. Your cooperation and prompt responses will help maintain case momentum.
Frequently asked questions
Is there any cost to start a No Win No Fee claim?
Most firms offer free initial consultations, but ask about any application or file-opening fees.
Will I ever be left out of pocket?
Possibly – you may be responsible for disbursements and potentially adverse costs if you lose.
Can I switch solicitors mid-case?
Yes, but you may need to pay for work already completed by your original lawyer.
Are contingency arrangements allowed in my state?
Rules vary – percentage-based fees are prohibited in some states but allowed with restrictions in others.
Final thoughts on No Win No Fee arrangements
No Win No Fee arrangements have made legal representation accessible to many Australians who would otherwise be unable to pursue justice. However, these agreements aren’t all created equal. Take time to understand exactly what you’re agreeing to, get everything in writing, and don’t shy away from asking difficult questions.
Remember that a good lawyer will explain their fee structure clearly and transparently. If you’re considering a personal injury claim or other legal action, Conrad Curry can help you understand whether a No Win No Fee arrangement is suitable for your circumstances and what to expect throughout the process.