Navigating legal costs – understanding "No Win No Fee" in your personal injury claim in NSW

This is an update of 2024 April

Personal injury claims can be daunting, both physically and emotionally, for people seeking compensation for injuries they've suffered due to the negligence of others. In New South Wales (NSW), you may encounter the term "No Win No Fee" in relation to discussing the legal costs of a personal injury claim. Carroll & O'Dea Lawyers on a case by case basis, may also offer a no-win-no-fee to us arrangement. This article aims to explain the concept of "No Win No Fee" and provide clarity on how it operates within the legal landscape of personal injury claims in NSW.

Understanding "No Win No Fee"

"No Win No Fee" is a legal arrangement commonly known as a conditional fee agreement. In the context of your personal injury claim, it means that if your case is not successful and you do not receive compensation, you will not be required to pay your legal fees. This arrangement is designed to alleviate the financial burden on individuals seeking justice and compensation for injuries sustained through no fault of their own.

What This Article Does Not Cover

It is important to note that this article does not cover the legal costs payable for providing advice and pursuing a dispute in the Personal Injury Commission related to no-fault benefits claimed to be payable for persons injured in motor accidents (after 1 December 2017) and in work accidents. We will never charge you legal costs for acting in these claims for no-fault benefits given these legal costs are typically payable by the insurer of the other side or, in the case of most workers compensation claims, by the Independent Review Office (IRO).

Key components of "No Win No Fee" agreement

Legal practitioners who offer "No Win No Fee" services typically provide a free initial consultation. This allows you as the injured party to discuss the details of your case with a lawyer, who will assess the merits of your claim and advise you on the likelihood of success. This means you will not lose anything by obtaining some advice from a lawyer as to whether it is in your best interest to make a claim.

If your lawyer believes that your case has merit, a conditional fee agreement is then provided. This agreement outlines the terms and conditions, including the circumstances under which you are liable to pay legal fees. It is essential that you carefully review and understand this agreement before proceeding with your legal representation. If you do not understand any of the information provided to you, you can ask your lawyer to further explain the documents and what they mean to you or you can also obtain further independent legal advice.

In the event of a successful claim, a part of our legal fees and disbursements (out-of-pocket expenses incurred during the legal process such as clinical notes and reports) are typically covered by the compensation awarded on a party/party basis. These costs are also known as "ordered costs".

In most cases, if your lawyers agree to act on your behalf, part of that agreement is that they will pay all the necessary disbursements to bring your case to a successful resolution. This means paying for the medical records and reports required by your lawyers to conduct your claim. Normally, if you do win, you agree to pay the interest that your lawyer incurs on the amount that they have paid for your disbursements.

Party/Party legal costs

Ordinarily, the court will order that an unsuccessful litigant pay the successful litigant's costs of a court case. As a rule of thumb, party/party costs (or "ordered costs") cover about two-thirds of the total amount of costs that have been incurred. This proportion of legal costs payable by the unsuccessful litigant will typically be somewhat lower in motor accident injury and work injury damages claims because claims of this nature are subject to a capped regime which applies to costs.

It is important to understand that a "no-win, no-fee" agreement does not operate to remove your liability to pay an opponent's legal costs if the claim is lost. If your case goes to court and you lose, you will usually be ordered to pay a proportion of the costs of the other side. This is a serious consideration, and your lawyer should keep you informed of the likelihood of you losing at each step of the preparation and negotiation of your case.

All the work that your lawyer does on your claim should be recorded in a completely transparent way. You should only be charged by your lawyer in accordance with the costs agreement that you signed before any work is started on your claim.

With "No Win No Fee," individuals are not required to pay any upfront legal costs. The financial risk is shifted from you as the injured party to the lawyer, creating a more accessible avenue for those seeking justice without the worry of any immediate financial strain.

You should confirm whether disbursements will be reimbursed from the compensation amount or if they will be treated separately. It might depend on the circumstances of your claim or the nature of your claim as to how disbursements are paid for. Understanding these details ensures transparency in the financial aspects of the legal process.

If you ever have any concerns regarding your legal costs, and how they are calculated, it is important to discuss them early on with your lawyer.

"No Win No Fee" arrangements play a significant role in making legal representation more accessible to individuals pursuing personal injury claims in NSW. This approach helps level the playing field, allowing those who have suffered injuries to seek justice without the immediate financial burden of legal fees. As with any legal agreement, it is crucial for you to thoroughly understand the terms and conditions before entering into a "No Win No Fee" arrangement, ensuring a fair and transparent legal process.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.