Published: 25 June 2012
Author: Shaun Marcus
Will there be anything left for me when the lawyers are done? Questioning your legal fee agreement can reduce your legal costs.
Shaun Marcus, Senior Associate with RCT, offers advice on how clients can protect themselves against being ripped off.
I've been in practice for 8 years as a plaintiff lawyer, mainly representing clients who have been injured at work or on the road and want to take their case to court.
The first interview with a client is always critical. It reveals a lot about how they feel as much as it does about the clinical details of their injury, and much of that is unspoken. It has to be teased out.
One of the great unspoken concerns clients have is about fees.
Of course, you are often asked questions about how fees are charged and how much is charged when pursuing a case. After all, it is standard practice within any reputable law firm to ensure a client is fully briefed on the firm's fee policy.
For example, at RCT, we require a client to sign a fee agreement, which we explain in detail and encourage clients to ask questions about.
I am shocked by how clients listen to my explanation of fees and expenses, tell me they understand, then go ahead and sign the agreement without even reading it. I always encourage people to read the document, but often they don't.
I am also shocked by the stories I hear about other firms that demand a client sign a fee agreement on the day they see their chosen lawyer for the first time. Many times, a client is not at the stage where it is appropriate to commence a claim for compensation as they simply may not be ready, for example, they may be receiving ongoing treatment. You should only require a fee agreement be signed when starting to act on a claim. Why should you be signed up to an agreement when no action is actually being taken?
That does not mean you are left on your own. If you have any issues with your insurer or return to work, a good lawyer should be happy to help you at any stage of your claim.
When I talk to lawyers from other firms and, given the fraternal nature of the profession, this happens more often than you might think, it appears that this is not unusual client behaviour. Many people appear reluctant to press a lawyer on the details of a fee policy.
For some lawyers, it's the great dread; the topic they don't want aired at all.
But people who have been injured must take fees policies seriously because, despite appearances, not all fee agreements or policies are the same.
The level of reimbursement for legal time plus the details of disbursements such as fees for medical reports and the smaller items such as faxes and photocopying expenses, all add up. I have seen shameful examples of some law firms gouging so many fees that the client is left with a meagre compensation payout for their injury, even though they win their day in court.
I'm not sure clients believe me when I tell them that not all legal fee policies are the same and that some lawyers take advantage of their position of trust. But I know that many people carry a silent worry that they may not obtain a worthwhile payout even if they are successful. You can hear them ask themselves: "Will there be much left for me once the laywers are done?"
So, here is some important advice for anyone who is considering taking legal action for compensation in a personal injury matter and may be weighing up also which firm to help the fight for it.
Not all fee policies are the same
Not all No Win No Fee offers are the same. One important difference among injury firms is that most, if not nearly all, will still require the client to pay court costs, medical report costs, administration costs and so on, even if the case is lost.
While a No Win No Fee offer will largely protect you from a large legal bill if you loose your case, it certainly will not protect you from overcharging if you are successful, In other words, many people are seduced into thinking that they will go through with court action reassured that if they loose, it won't financially damage them.
But the point is that if you win your case, the lawyer's fees may be so exorbitant that you are left with not much at all or, at least, not as much as you had hoped. You should ensure that your lawyer's fees are calculated based on an appropriate Court scale of fees and not a gouging hourly rate.
Ensure your lawyer will do their utmost to recover as much of your legal costs as possible from the opposition. This will decrease the amount of legal costs that comes out of your own pocket.
At our firm, if we have agreed to take your personal injury case on, we will not charge you for any of your own cost or disbursements under our No Win No Fee, OR Expenses policy if your action unfortunately fails*.
So, here are some questions you should be asking your lawyer about fees and expenses, before you sign up.
The 5 big, and often unasked, questions on legal fees:
1. How will your lawyer work out the level of your legal fees? Based on an appropriate Court drawn Scale of Costs or an exorbitant hourly rate?
2. At what stage will your lawyer start charging fees? From the day you first enter the door or when appropriate action has commenced?
3. How much of the total legal fees will be recovered from the opposing party in the claim?
4. Does your lawyer charge a percentage or for the work actually done?
5. What are you up for in the event you loose the claim? Do you have to pay your expenses if you lose?
Remember, it's your life and your future. You owe it to yourself and your family to make sure you are not being skinned.
*Conditions apply. It does not apply to the other party's legal costs.