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Personal Injury Lawyer Rockhampton

No Win No Fee and the 50/50 Rule

February 7, 2014

No Win No Fee

How does the 50/50 Rule apply to the assessment of legal fees in “no win no fee” cases

 

At Rees R & Sydney Jones, we regularly accept personal injury cases on a “speculative” or “no win-no fee” basis. In other words, we only get paid for our services (and disbursements) if we are successful in recovering damages for our clients.

 

Several years ago, the 50/50 rule was introduced so that injured claimants always receive a fair share of their damages and to prevent unscrupulous personal injury lawyers from gouging fees from their clients, particularly in the case of low settlements.

 

So how does the rule work? It applies to all “speculative” or “no win-no fee” personal injury claims. In such cases, lawyers cannot charge their clients more than half of the amount of their settlement after deducting any statutory refunds and properly incurred disbursements made during the course of the claim.

 

Consider the following example:

 

  • A client settles their damages claim for $50,000.

  • There is a refund to Medicare of $2,000.

  • The lawyers have incurred $8,000 on disbursements, including barristers fees.

Regardless of the amount of work they have done, the lawyers cannot charge the client more than $20,000 (ie. $50,000 – $10,000 = $40,000 x 50%). Any lawyer who breaches this rule will be guilty of professional misconduct. A lawyer wishing to charge more than the amount permitted by the statutory formula, must show that special circumstances apply and seek the approval of the Qld Law Society.

 

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