No Win No Fee Lawyers – Avoiding Fee Traps.
If you’re looking for no win no fee lawyers to help with your compensation claim, you’ll know there are plenty of firms to choose from. But what you might not know is that not all no win no fee lawyers are the same and there are fee traps you should avoid at all costs.
Some no win no fee lawyers, including some very well-known firms, will still hit you with a bill to pay if they lose your case. This is because their no win no fee agreements cover their professional fees but not their costs.
In this guide we explain in simple terms:
- How no win no fee lawyers work
- The differences between no win no fee agreements
- The hidden fee traps in some agreements
- How to choose the best no win no fee lawyer
- How to pursue your claim without taking any financial risk
How do no win no fee lawyers work?
A no win no fee lawyer offers to run your case for you and only get paid when you win. If you choose the right lawyer, it’s an excellent option that allows you to pursue your claim without any risk, but it’s important to check the lawyer’s costs agreement to fully understand what’s covered. With some no win no fee lawyers you can still end up having to pay thousands of dollars in expenses if they lose your case. To protect yourself, read on to learn what questions to ask and how to interpret the fine print in costs agreements.
How do no win no fee lawyers bill their clients?
To understand the difference between no win no fee lawyers, it’s important to understand how you’ll be billed at the end of your case. Your bill will include three main sections:
Professional fees are the fees earned by your no win no fee lawyer if they win your case. No win no fee lawyers in NSW are not allowed take a percentage of your compensation payment – this rule prevents them from charging large fees for very little work.
Disbursements are the costs your lawyer incurs when they run your case and they can make up a large part of your bill. Disbursements can be for services like:
- Medical reports
- Forensic accounting reports
- Other expert reports
- Court fees
If your no win no fee lawyer engages a barrister on your behalf, they will pass on the cost of the barrister to you.
How much do no win no fee lawyers take?
This is a common question – many people think no win no fee sounds simply too good to be true and are concerned about how much they’re going to be charged after their case is won.
The amount your lawyer earns from your compensation payment will be listed in their bill as “professional fees”. They’re only allowed to charge you fees for the actual services they provide, through an hourly rate or set fees for each of the services they provide. Your lawyer can, however, put a cap on their fees, so that you know your fees can never exceed a set percentage of your compensation.
What are the fee traps with no win no fee lawyers?
Fee trap number 1: Payment of costs (disbursements)
This is probably the biggest difference you’ll find between no win no fee lawyers, and it’s definitely one to watch out for. The trap is that some no win no fee lawyers could still hit you with a large bill if they lose your case.
Needless to say, these no win no fee lawyers should be avoided.
Fee trap number 2: Paying your costs (disbursements) up front
Some personal injury lawyers may not pay all of your costs up front. For example, they may not pay for some of the expert medical reports they need as evidence for your case, travel expenses or court fees. It’s best to avoid lawyers who expect you to pay these costs up front out of your own pocket – choose a lawyer who will pay them for you, so you’re not taking on any risk.
Fee trap number 3: Charging interest on your costs (disbursements)
Some no win no fee lawyers will pay the up-front costs / barrister fees for you, but then charge you interest on the costs at the end of your claim. This is likely to be because they’re using another firm to fund your case – they’re essentially taking out a loan on your behalf.
Who pays my lawyer’s fees and costs if I lose my case?
This depends on which no win no fee lawyer you choose. Here’s a simple summary:
- If you choose a lawyer who covers all your costs and disbursements, no one pays the lawyer’s fees, and the lawyer pays your costs out of their own pocket.
- If you choose a no win no fee lawyer who only covers your professional fees, then no-one pays your lawyer but you will pay for costs and disbursements.
How do I choose the best no win no fee lawyer for my case?
First, look at the lawyer’s costs agreement and ask the lawyer these three questions:
- Will I have to pay for any disbursements up front?
- If you pay for my disbursements, will I have to pay interest on them?
- Will I be charged for disbursements if you don’t win my case?
If the lawyer says yes to any of these questions, then you should avoid them. On the other hand, if the lawyer says no to all three questions then they’re truly confident about winning your case, to the point where they’re willing to pay the up-front costs and take on all the risk for you.
Secondly, choose a lawyer who specialises in your claim type and has won claims like yours. Some no win no fee lawyers will take on a range of different claims – like workers compensation claims, car accident claims and public liability claims – but the best no win no fee compensation law firms have teams that specialise in each claim type. The best no win no fee lawyers are also backed by a team of experts who will work together to get you the maximum compensation for your claim.
Thirdly, choose a lawyer who will take time to get to know you personally. A lawyer who wants to meet with you face to face and is always available to talk will find out more about you, your injuries, and the impact your injuries have had on your life. This is the only way a lawyer can really get to know you and claim everything you’re entitled to.
Finally, avoid lawyers who charge by the hour. You need to be able to talk to your lawyer anytime without fear of running up a big bill.
Can I get a no win no fee personal injury lawyer to represent me for free?
Yes, there are some situations where you can get a personal injury lawyer to take on your claim at no cost to you – so you won’t have to pay any fees even if you win your case.
For example, for NSW CTP claims (claims for motor accident injuries) lawyers’ fees are regulated. Lawyers can’t charge to help you lodge your application for personal injury benefits. But if you’re disputing a CTP insurer’s decision, then for most disputes you can engage a lawyer at no cost to you.
There are two types of disputes – paid disputes and unpaid disputes
- A paid dispute is a dispute that a personal injury lawyer can charge for, and the fees are fixed.
- Your lawyer will earn generally $1,660 for each paid dispute to a maximum of $6,000 for each dispute category.
- You won’t have to pay anything to have a lawyer assist you with a paid dispute – these fees are paid by the insurer.
- If a lawyer helps you with an unpaid dispute, they must do it free of charge.
For NSW workers compensation claims, most no win no fee personal injury lawyers will apply to WIRO (the Workers Compensation Review Office) for funding on your behalf, and this may cover all your legal fees. If you’re pursuing legal action such as a work injury damages claim, then the no win no fee arrangement would apply.
Are there no win no fee personal injury lawyers who specialise in claims like mine?
The best no win no fee personal injury lawyers specialise in one of the following claim types:
No win no fee medical negligence lawyers: Medical negligence claims can be expensive to pursue, as they rely heavily on reports from medico-legal experts to confirm that negligence has occurred. So the vast majority of medical negligence claims are made using no win no fee medical negligence lawyers.
No win no fee car accident lawyers: For CTP claims in NSW, lawyers’ fees are regulated and some of your fees might be paid by the insurer. The best option is to engage a no win no fee car accident lawyer, so that you can pursue your claim without taking any financial risk. The lawyer will recoup whatever legal fees they can from the insurer, and if there are any legal fees left for you to pay, you’ll only need to pay after you receive your compensation.
No win no fee workers compensation lawyers: In NSW, most workers compensation lawyers will apply to WIRO (the Workers Compensation Review Office) for funding on your behalf, and this may cover all your legal fees. If you’re pursuing legal action (such as a work injury damages claim), and you choose a no win no fee workers compensation lawyer, you’ll only need to pay them if you win your claim.
No win no fee public liability lawyers: If you’re making a public liability claim, it’s important to understand that in most cases you’ll be claiming against an insurer that has lawyers on its side. Engaging the right no win no fee public liability lawyer gives you a no-risk way to pursue your claim.
No win no fee TPD lawyers: If you’re making a TPD claim, it’s a good idea to speak to a no win no fee TPD lawyer before you start. Some lawyers will offer to review your superannuation funds/ TPD policies at no cost to you and determine what you’re eligible to claim, then you can decide if you want to engage the lawyer to assist with your claim, and only pay them after you win.
Where can I find a no win no fee lawyer in Sydney & NSW?
Law Partners is Australia’s largest specialist no win no fee personal injury firm, with 15 offices across Sydney and NSW.