What is a No Win No Fee Agreement?
No win no fee agreement for a compensation claim means your lawyer only gets paid if they win your case. If you choose the right lawyer this can mean that you can pursue your compensation claim without the risk of a bill from your lawyer if you lose. With this in mind, it is important to check your lawyer’s cost agreement to fully understand what will be covered under their no win no fee arrangement. There are two common types of no win no fee agreements:
- A no win no fee agreement that covers all costs and disbursements. In this kind of agreement if the lawyer loses, they will incur the costs for all activities related to the case including their professional fees, barrister fees and disbursements like medical reports and court fees.
- A no win no fee agreement that only covers professional fees. This means that you will not need to pay your lawyers professional fees if you lose but you will need to pay for costs and disbursements which can add up to thousands of dollars over the course of a claim.
If you win, what will your bill include?
Compensation law fees are heavily regulated in New South Wales, which means that there are strict rules on how lawyers can charge for their time. Here are the three main costs that are usually incurred in a compensation claim:
- Professional Fees: These are the fees charged in relation to your lawyers time and professional advice to you.
- Disbursements: In any claim, lawyers incur ongoing costs throughout the case for things like medical reports, court fees, administrative expenses and inspections. To avoid unexpected surprises, it is important to ensure that your no win no fee agreement includes the payment of these costs.
- Barrister Fees: In some instances, your lawyer will need to engage a barrister to represent your case. If they do so, ensure the barrister also operates on a no win no fee arrangement.
If you choose the right lawyer that covers all costs and disbursements, you will only need to pay these if you win your compensation claim.
Hidden charges to avoid
Before settling on any one lawyer you should check that there are no hidden fees in their agreements. The three main hidden fees to avoid include:
- Payment of disbursements: The best no win no fee lawyers will include all costs in their agreement, which means that if you don’t win you don’t need to pay anything. If your no win no fee agreement only includes professional fees you may need to pay disbursements if you lose, which makes this the important to ask before you sign.
- Paying disbursements upfront: Some lawyers may not agree to pay for all your disbursements, which means that you may need to pay for things like medical reports or court fees upfront out of your own pocket, increasing your risk if you lose.
- Charging an uplift on your costs: Some lawyers will charge you an uplift on your fees if you win your case. In order to maximise your compensation and avoid these additional fees, it is best to ask about this upfront.