If you watch television you would have seen a number of ads for legal firms advertising that they act on a ‘No Win No Fee’ basis with respect to claims for damages for personal injuries. Similar advertisements can be seen on billboards up and down the highway.
Most individuals who have been injured either at work or as a result of a motor vehicle accident or some other related incident, do not have a nest of funds ready waiting to pay for legal services. Consequently, many individuals in need of legal services are attracted by the slogan ‘No Win No Fee’.
After attending or corresponding with the ‘No Win No Fee’ Lawyer, they then normally receive correspondence or advice to the effect that “the matter is not straight forward but we will act on your behalf and our total professional fees inclusive of GST payable by you will not exceed half of the total amount which is recovered from the opponent after deduction of Centrelink, Medicare, WorkCover and outlays that are incurred with respect to Barristers Medical Specialists, Court fees, travel and accommodation.”
The injured client will then be asked to sign a Cost Agreement which may contain references to “we will only charge professional fees and expenses if we win or rates reflect our specialist knowledge on the laws and tactics relating to these claims or the precise amount of our legal costs that will be payable by you will vary depending upon a number of factors including the nature and complexity of the matter” and a Schedule of professional fees. A close examination of the Schedule will disclose that the fees may range from $960.00 per hour for an Accredited Specialist to $540.00 per hour for a Senior Associate before the application of a further uplift for “the risk of undertaking the work and incurring expense without guarantee of payment”.
Whereas to the injured client the law and the prospects of success may seem to be a complete mystery, any competent Lawyer should be able to assess a party’s prospects of success in a consultation with the injured client of less than one hour.
That is, within an hour of meeting the injured client, any competent Lawyer should know whether the claim has prospects or no prospects. After that assessment is made, the only risk to the Lawyer is if the injured client is not truthful with respect to their version of events. Whether the version of events as described by the injured client is accepted, will more than likely be revealed after obtaining WorkCover records or a Traffic Incident Report or Medical Records.
Our office has dealt with a rising number of complaints from disgruntled clients after entering into No Win No Fee arrangements. The complaints have included:-
- Legal firms not spending money on paying for appropriate Engineering reports and incurring expenses with respect to gathering evidence. Then advising the client that they had no prospects of success. Then demanding over $100,000.00 before they would release the client’s file to enable a client to pursue the action.
- Disputes over the amount of the legal firm’s account at the conclusion of the action. Where on settlement the legal fees charged were $46,000.00 and the client recovered an amount of $46,000.00.
- Matters being settled for less than the true value of the claim perhaps as a result of pressure on the Solicitor to reduce the firm’s overdraft/pay for its advertising budget. Our practice has resisted acting on a No Win No Fee basis deliberately to reduce incidents of client dissatisfaction. The preferred arrangement is for the client to pay for the professional costs and outlays when the work is performed. This can be achieved through the client’s own funds or alternative litigation funding arrangements depending upon the client’s circumstances.
Where litigation funders provide funding they require the legal firm to guarantee repayment of monies lent for the litigation. If the Solicitor acting on your behalf has guaranteed repayment of monies borrowed, the client can expect that the Solicitor is confident of the outcome of the Claim.
When the client is paying for the legal services provided, the client can demand proper performance.
When a Solicitor is being paid at the time the work is performed, there is no pressure on the Solicitor to settle the claim at an undervalue.
The costs of conducting litigation should relate solely to the work that is required to be performed, to achieve the best result for the client, and not be dependent upon the damages to which the client is entitled.