Everyone should be entitled to legal representation which is why some firms provide no win no fee agreements. This allows you to get advice without paying upfront fees—in fact, any fees until you achieve a settlement. So how much do no win no fee lawyers take? Many firms out there have adopted the 50% fee cap prescribed under the Legal Profession Act, but at Gouldson we have a 30% fee cap. In this article we cover what a fee cap means as well as what other costs may be charged during your case.
If you are comparing lawyers, ask the following questions (then check that it lines up once you receive your costs agreement):
- What is the fee cap?
- Will I pay anything if I lose?
- Will I have to pay for any expenses/outlays while you run my case?
- Will the lawyer only charge for work completed or will they automatically take a percentage of the claim payout?
By asking these questions and gaining complete clarity on the costs agreement, you will put yourself in a position to best understand and compare your options. You’ll also protect yourself from any firm wanting to charge as much as they can from your damages.
What is a fee cap?
A fee cap is basically the percentage that a no win no fee lawyer will charge as a percentage of the settlement sum once your case is settled. The lower the percent, the less money the lawyer can charge in professional fees. When you consider the amount of money at stake, this could be the difference between getting the compensation you need and not getting enough.
Under the Legal Profession Act 2007, there’s a clause that says no win no fee lawyers cannot charge more than the 50% of the settlement after deducting outlays, and other amounts refundable from the settlement sum (e.g. Centrelink, Medicare, private health funds). This is known as the 50/50 rule. We think charging 50% isn’t fair so our costs agreement provides further protection for our clients, and we charge up to a maximum 30% of the settlement sum for our professional fees.
We also only charge for the work that was done. This work is provided at a competitive hourly rate, not as a percentage of your overall payout. The 30% cap comes into play if the work that was done exceeds 30% of the money you receive from your claim. In this case, we cap your fee at 30% plus the outlays spent in running your claim.
The more complex a case, the more likely it is for the fee cap to come into play. But even if our work is more than 30%, you will never be charged for it.
Will I pay anything if I lose?
When you’re choosing a lawyer, one of the key questions to ask is whether you will pay anything if you lose. For example, with Gouldson, you won’t pay anything unless you win. The only exception to this, which is extremely unlikely, is if you proceed to trial before a Judge, lose, and the Judge orders you to pay money to the defendant for their legal fees and outlays. When there is any risk of a client losing money on a case, we nip this in the bud early on.
How do lawyers know it will be a successful case?
Our lawyers will assess your case against all relevant criteria to determine if it has a high likelihood of being successful (and that there are sufficient damages recoverable to make proceeding worthwhile). If there is evidence missing or it doesn’t meet the requirements (e.g. no one is at fault), then we won’t pursue the case, and we will not charge you for the time spent investigating.
As with many big decisions in life, understanding and asking the right questions goes a long way. If you’re thinking about pursuing a claim and want to know more about no win no fee agreements, get in touch today.