How Do “No Win, No Fee” Lawyers Work?

By: CompensationLawFirms.com.au March 29, 2014 Comments
Lawyer

How Do “No Win, No Fee” Lawyers Work?

The concept of a ‘no win, no fee’ lawyer works like this: You let someone else take care of your claim, and if said person fails at the mission, then you get to skip out on the potential bill. Here’s the question — is this true? Is the notion of a “no win, no fee” lawyer really a fact, or is it just some sort of trick?

Understanding Conditional Fees

No win, no fee lawyers exist. They work on a conditional basis. The deal is usually based on an official ‘Conditional Fee Agreement’ that you need to read in detail before signing. It specifies the rules behind the agreement. Usually, but not always, the conditional agreement says that you the client need not pay anything unless the lawyer wins the case.

One thing you must be aware of is the potential for outlay fees. These are expenses that the lawyer accrues while investigating your case. Take the following examples:

  • Costs of obtaining copies of your medical records.
  • Costs of obtaining official police records.
  • Costs of contacting and speaking with connected parties.

Not all “no win, no fee” lawyers waive outlay fees, so you need to check with the specific attorney to determine whether they apply or not in your case.

Reasons Lawyers Work On A Conditional Basis

A conditional agreement puts a lawyer at great risk. Imagine if a lawyer spends 100 hours on a case, only to wind up losing it. Lawyers make up for this by adding success fees on top of the regular costs associated with practicing law. The point is that clients wind up paying more with a conditional agreement than without, assuming of course they win their case or cases.

How Payment Works With Conditional Law

Payment does not become an issue until after the case is complete. If you win, then you obviously must pay everything, including basic costs, disbursement costs, outlay fees and the success fee.

In the event that you lose the case, you typically wind up paying nothing. However, some lawyers do include outlay fees in their conditional agreement, which is why you have to read the fine print.

Note also that the success fee can range from as little as 15% to as high as 50%. It will be dependent on the specifics of your case. Some factors that might play a role have been included below:

  • The amount of time and labor required to deal with your case.
  • The experience of the lawyer or lawyers dealing with your case.
  • Any time limitations that are present for whatever reason.
  • The relationship between you and the lawyer.

Risks Associated With “No Win, No Fee” Lawyers

There are two risks associated with this type of law. The case might be settled in your favor very quickly and with great results. It might then bother you that you must pay so much as per the success fee. Likewise, the case might take a very long time to be settled, and it could wind up producing only a nominal monetary reward. This in turn would leave the lawyer feeling frustrated.

Additional Information

The only other thing to keep in mind is that most attorneys are very strict about what cases they accept on a conditional basis. Those cases pertaining to accidents, personal injuries, defective products and creditor harassment are the ones most commonly taken on a “no win, no fee” basis.

By the same token, it’s very rare for lawyers to offer “no win, no fee” services for criminal, bankruptcy and divorce cases. Ultimately, though, it’s up to each individual attorney, which is why you always need to take the time to speak with the attorney and also read the fine print.

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