No win no fee advantages and disadvantages
There are several advantages and disadvantages of no win no fee agreements, which this page will explore.
Advantages
Allows a person to hire a lawyer without having to pay money upfront (but this isn’t always the case)
Allows a person to hire a lawyer and only pay a fee if the case succeeds (again, this isn’t always the case).
There are plenty of lawyers around who offer no win no fee agreement, which means you, as a consumer, have plenty of choice.
No win no fee agreements are regulated – which means that you have a certain level of protection when it comes to paying costs. For example, a lawyers costs under a no win no fee agreement need to be reasonable and proportionate to the work done. Lawyers in Victoria that act under no win no fee agreements cannot bill you a percentage figure of any money you receive.
Disadvantages
Some uncertainty relating to costs – when you are under no win no fee agreements, you might not have the certainty of knowing exactly sure what your end costs will be, compared to if you were paying fees as you go.
No win no fee may result in you having to pay more by way of legal fees, compared to if you were not under a no win no fee agreement. You should read more about uplift fees, which is an extra fee that a lawyer can bill you for because they carry the risk of acting a no win no fee basis on your behalf.
No win no fee agreements can be difficult to understand for the average person.
Significant variations between no win no fee agreements – some agreements may still require you to pay money to a lawyer even if you lose.
Under some agreements, you can be required to pay for disbursements if you are not successful with your matter. This bill can range from several hundred dollars to tens of thousands (and in rare instances, usually where a matter has had a hearing run for several weeks, hundreds of thousands).
Some no win agreements will require you to pay money up front to a lawyer.
No win no fee usually doesn’t mean that you pay only if you ‘win’ your case. In many agreements there will be definitions of success and situations in which you still may be required to pay, even if you don’t win your case. For example, if a lawyer recommends settling your case for a particular amount and you disagree with the lawyer, that may result in you having to pay fees to the lawyer.
Not all lawyers in Victoria offer no win no fee representation. Most lawyers who practice in compensation cases do, but other lawyers such as commercial lawyers, do not.