"No win, no fee" is the standard way personal injury claims are funded in Queensland. Without it, most injured people could not afford to bring a claim at all, because the insurer on the other side has unlimited resources and the claimant, by definition, has just lost income. The phrase itself is simple. The agreements behind it vary a great deal, and the differences only show up when a claim does not succeed or when you want to change lawyers.
Key points
- No win, no fee only guarantees that professional fees are not charged if the claim fails; outlays and termination terms vary between agreements.
- Queensland caps fees in speculative personal injury claims at half of what you receive after refunds and outlays (the 50/50 rule).
- Ask four questions before signing: outlays if you lose, what happens if you leave, any uplift fee, and the net figure before any offer.
What the words guarantee
Only this: the lawyer's professional fees are not payable unless the claim succeeds. Professional fees are the charge for the lawyer's own work: advice, notices, correspondence, negotiation, the conference, and court if it comes to that. The agreement is a conditional costs agreement, and the Legal Profession Act 2007 requires it to be in writing, to explain the conditions, and to give you a cooling-off period of five clear business days after signing.
What the words do not guarantee
Two things, and they are where the money is.
Outlays. Running a claim costs money paid to other people: specialist medical reports, records, barristers, court filing fees. These are called outlays or disbursements, and they can run to thousands of dollars. Some agreements say nothing about what happens to them if the claim fails; some make you liable for them win or lose; some cover them. Read the clause.
Termination. If you end the engagement part-way, or move to another firm, most agreements make fees and outlays to that date payable, sometimes immediately, and allow the firm to hold your file until they are dealt with. That is lawful, and often reasonable, but you should know the terms before you sign, not when you want to leave.
The 50 per cent cap
Queensland law adds a protection that most other states do not have. Under section 347 of the Legal Profession Act, in a speculative personal injury claim a law practice cannot charge professional fees of more than half of the amount you receive after refunds and outlays are deducted. The rule is often called the 50/50 rule. It is a ceiling, not a target: fees are charged for the work actually done, and in most claims they come in well under it. But it means you can never end a successful claim with less than your lawyer.
An uplift fee
Some agreements add an uplift to the fees if the claim succeeds, to compensate the firm for the risk of running claims that fail. The Legal Profession Act permits it, but caps it at 25 per cent of the fees and requires the agreement to state it. If there is an uplift, it counts towards the 50 per cent cap.
Four questions to ask
- If my claim fails, do I pay the outlays? Ask for the answer in writing and the clause number.
- If I end the engagement or change lawyers, what becomes payable, and when?
- Is there an uplift fee, and what percentage?
- Before I accept any offer, will you show me the net figure after fees, outlays and refunds?
A firm that answers all four plainly, before you sign, is one you can work with. The answers are also the ones a lawyer must give under the costs disclosure rules, so you are not asking for a favour.
How we do it
At KW Compensation Lawyers, if a claim does not succeed you pay no professional fees, and in most cases no outlays either. There are situations where the outlays we have paid become payable even though the claim has not succeeded. They are all set out in the costs agreement, and we walk you through them before you sign.
Frequently asked questions
What is the 50/50 rule in Queensland? Under section 347 of the Legal Profession Act 2007, in a speculative personal injury claim a law practice cannot charge professional fees of more than 50 per cent of what the client receives after refunds and outlays are deducted.
Do I pay disbursements if my no win no fee claim fails? It depends on the agreement, so read the outlays and termination clauses before you sign. At KW Compensation Lawyers, in most cases you pay no outlays if the claim does not succeed; the exceptions are set out in the costs agreement.
Is there a cooling-off period on a no win no fee agreement? Yes. A conditional costs agreement must give you at least five clear business days after signing to withdraw.
Sources
- Legal Profession Act 2007 (Qld), ss 323 (conditional costs agreements and the cooling-off period), 324 (uplift fees), 347 (speculative personal injury claims — the 50 per cent limit) — legislation.qld.gov.au
- Queensland Law Society, Costs guidance for clients — qls.com.au