Beware when Lawyers say ‘We Don’t Get Paid Unless you Get Paid’…

(This is not classic financial advice but Sarah in our office came across this issue and was adamant our clients should be warned).

The offer claims you won’t have to pay any money unless your lawyer wins the case for you. They are called Contingent-Cost Agreements (CCA). The idea is that people who cannot afford to pay legal fees are not prevented from pursuing a claim and allows a person with limited funds to access justice. These offers are only for personal injury, as CCA’s are not permitted in Criminal or Family Law cases.

The prospect of not paying anything unless you win is very attractive and gives you the confidence that the lawyers think you can win your case. But if it sounds too good to be true, then it probably is…

With a ‘no win no fee’ CCA, there are several things you need to be aware of –

The broad definition of what a ‘win’ means. The settlement may be for much less than you hoped, but the lawyer calls it a Win.

More notable, your ‘legal fees’ may not be payable, but you are probably accountable for their out of pocket expenses – Barrister fees; Court fees; expert reports etc. These fees can be tens of thousands of dollars.

At the extreme, if the case is lost comprehensively, the claimant may be ordered to pay the other sides legal costs.

At first, it may seem like a tantalising ‘free swing’, however as with any agreement, you need to consider the fine print. Ironically you may need legal advice.

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