Most people have heard of ‘No Win – No Fee’ Agreements and know people who have used them, yet many people remain wary that there is a whiff of ‘too good to be true’ about them.
In Victoria, a law firm can offer to act for you on a No Win – No Fee (NWNF) basis in any type of legal matter except for criminal law or family law matters. A NWNF agreement is an arrangement with your lawyer that you only pay legal costs to them if you ‘win’ your case. In theory, it sounds like a ‘no brainer’, yet many people remain sceptical of them.
Caroline Grainger, principal lawyer at Grainger Legal says that there is nothing to fear from a NWNF agreement and they are a great way of getting access to legal services that you might otherwise not be able to afford but you should ensure that you know the precise terms of the agreement before entering into one.
Caroline says that there are five things to be aware of when considering entering into a NWNF arrangement:
Sometimes a client is required to pay other amounts called ‘disbursements’ whether they win or not. Disbursements include items such as medical report fees, court fees and barrister’s fees. This is not always the case and you should ask your lawyer before entering into the agreement whether there’s likely to be any out-of-pocket disbursements and how much they’re likely to be.
Lawyers entering into a NWNF agreement are obliged to give you an estimate of their fees at the beginning of your matter and update the estimate if anything materially changes along the way.
You have the right to negotiate a fee agreement. Even though lawyers are not allowed to charge ‘contingency fees’ in Victoria (where a client pays their lawyer a percentage of the amount of compensation received), some lawyers may agree to cap their fees at a certain amount so that you are guaranteed to receive the largest portion of your compensation.
The fees charged in a NWNF agreement are sometimes higher than those charged in a standard costs agreement because the lawyer is taking a risk that the matter might not be successful, and as a consequence might not be paid for their services.
NWNF agreements do not apply to the other side’s legal costs if you lose your case and the court orders you to pay costs. This is a rare situation, and one that requires court proceedings to have been issued, but it is important that your lawyer is upfront with you about the risk of that occurring.
The benefit of NWNF agreements are that they allow everyone a chance to access the legal system, even where a person has limited finances to pay for legal services. As with any agreement that you enter into it, it’s important that you know your rights, and the terms and conditions of an agreement before entering into one. Your lawyer should take the time to sit down with you and explain the agreement to you properly and if you don’t understand it, ask!