As more of us solicitors compete for your work, many law firms are increasingly using terms like “no win no fee” as a selling point, with further marketing spin like “no risk” and “guarantee” to strengthen their sales pitch.
The Queensland Law Society refer to this types of agreements as “conditional costs agreement,” and certainly are not new. When my father started practising personal injury law in the early 80’s here in Queensland, these agreements were an excellent way to ensure access to justice and reduce the financial burden on a person who was cash poor due to not being able to work because of their injuries.
Unsurprisingly, these agreements have now evolved into something which many people require a law degree to understand. So before you rush in and say how great us lawyers are for providing this service, make sure you acutely aware of what you agree.
Here are a few tips to watch out for to avoid any potential pitfalls with no win no fee compensation lawyers:
1. Is the solicitor pre-paying all outlays in your case?
To obtain a favourable outcome, you will need to support your case with specialist evidence, like expert reports from Doctor’s. These reports can cost tens of thousands of dollars and a law firm should be agreeing to prepay these disbursements, so you are not out of pocket.
2. Does the solicitor expect the outlays be repaid if you get a disappointing outcome?
Many personal injury lawyers will consider any payment to be a successful outcome and will demand full repayment of the disbursements from that amount leaving no damages for you. Check to see what circumstances constitute a successful outcome.
3. Does the firm charge an uplift fee?
Many lawyers think that because they are taking a risk with your case, they can uplift their fees by up to 25% if they get a positive result. We at Taylors Solicitors reject this practice and have never charged a client an uplift fee. We do not agree with charging you a bonus for doing the job you have engaged us to do.
4. Does the firm provide this service through a litigation loan or some other credit provider?
Many practitioners now use a credit provider to cover the cost of the outlays but has to be paid back with interest once the matter is finalised. We are against the use of these providers because we find that the interest charges can be significant which ultimately means the amount you receive in the hand will be less.
5. Is this firm sufficiently financial to handle the workload?
Claims on average take between 18 and 30 months to resolve. As well as having to pay outlays such as Doctor’s reports, we also have to pay the costs of the business such as secretaries wages and electricity prices until we get paid.
Unfortunately, we find these pressures on firms of all sizes means they may attempt to negotiate a quick resolution in your claim for less than it is worth to increase their cash flow. The only way to avoid this is to ensure you engage a firm which is well established and ask to see past client testimonials.