When a claim for personal injuries is settled or determined at trial, separate amounts are awarded for damages (the sum of money to compensate for losses resulting from an injury) and costs (the amount awarded to cover a portion of your legal bill, if any).
What may be agreed to or determined in court for costs is heavily dependent on the declared costs limit, lower offer limit and upper offer limit.
With the exception of personal injury claims against employers covered by WorkCover Queensland, personal injury claims in Queensland are subject to certain “costs thresholds” that can have a notable impact on the ultimate “in hand” outcome achieved in a claim for damages for personal injuries. These thresholds are referred to as the “upper offer limit”, “lower offer limit” and “declared costs limit”.
What is the Upper Offer Limit?
For injuries occurring on or after 1 July 2025, the upper offer limit is $96,870.
If damages are settled or awarded above the upper offer limit, costs must be agreed to or determined on a “standard basis”. This will result in a defendant making a substantial contribution towards your legal bill. Many of our competitors advise that the likely contribution will be as low as 30% to 50%. However, at vbr Lawyers, we advise our clients to expect a likely contribution equivalent to 50% to 70% of our legal bill.
The legal bills for claims above the upper offer limit will naturally have a less significant impact on what a person receives “in hand” due to the more generous contribution towards costs.
What is the Lower Offer Limit and Declared Costs Limit?
For injuries occurring on or after 1 July 2025, the lower offer limit is $58,090.
Damages above the lower offer limit and at or below the upper offer limit will result in “regulation costs” being paid. Recoverable regulation costs are substantially lower than what one might typically expect when claiming for standard costs and are subject to the declared costs limit.
The declared costs limit is a fixed cap on the contribution payable toward a legal bill. For injuries occurring on or after 1 July 2025, the cap is $4,860.
Damages at or below the lower offer limit will result in no contribution being made towards a legal bill at all.
It is therefore important for claimants to put forward their best evidence to ensure their claim for damages and prospects of securing regulation or standard costs are maximized.
Indexing
Each year a ministerial notice is issued confirming the increase in the declared costs limit, lower offer limit and upper offer limit. Indexing is based on the percentage change in average weekly earnings.
It is beyond the scope of this article to discuss whether the formula used for indexing is reasonable. However, claimants should have regard to indexing and note that historically, and despite cost-of-living concerns, the applicable limits have increased year on year.
Summary
To summarise:-
- matters with damages above the upper offer limit can expect a substantial contribution towards their legal bill in addition to compensation for damages;
- matters with damages at or below the upper offer limit can expect a comparably modest contribution towards their legal bills or no contribution at all; and
- the thresholds for the declared costs limit, lower offer limit and upper offer limit have historically increased year on year.
Costs thresholds can be a difficult concept to understand and the amount that can be recoverable in costs depends heavily on the likely “quantum” or value of damages claimable.
vbr Lawyers offer obligation-free consultations with experienced personal injury lawyers to discuss claim entitlements.
