When someone has been badly injured due to no fault of their own and especially if the injuries are caused by someone else’s negligence, a common law claim for damages is the generally the best remedy.
Some clients will approach a lawyer or law firm based on a personal referral from a family member, friend or co-worker based on a past good experience which is often the best approach. Similarly, some clients will avoid certain lawyers or law firms based on a previous experience or from advice from others about which firms to avoid. Some clients will also approach a lawyer or law firm based on various forms of paid marketing or advertising. The journey of clients selecting their preferred lawyer or law firm varies for these reasons.
It is fair to observe that in personal injury law there is quite a wide spectrum of small, medium and large law firms who focus on personal injury law. Different firms have different approaches to how they seek to charge their clients legal costs. Some charge more while some charge less. Some firms have a big team approach while others do not.
It is also fair to observe that firms who have large overheads and spend lots of money on paid marketing and advertising generally charge more or a lot more than firms who do not have large overheads.
The vast majority of our clients are from personal referrals from past happy clients or current clients and general word of mouth referrals.
At vbr Lawyers, our overheads are very low when compared with other firms and we like it that way. Our fee structure is very client friendly and is lower or much lower than our competitors.
Our lower fee structure or model does not mean inferior service or lower quality legal work. Quite the opposite. At vbr Lawyers every client is being looked after by one of the owners of the firm or a senior lawyer and from start to finish.
The Four Important Considerations When Choosing Your Lawyer
When deciding which law firm to retain to act on your behalf regarding your personal injury matter, the four important considerations appear to be: –
- Finding a personal injury law firm with a good reputation;
- Selecting a lawyer within the preferred law firm that has a good reputation who is both skilled and experienced in personal injury law;
- Spending some quality time with the proposed lawyer and being satisfied that the lawyer understands you, your circumstances and your case along with providing clear and meaningful advice regarding your prospects of success, the likely quantum [or full value] of your claim including your likely ‘in hand’ outcome, a reliable estimate of the legal costs up to and including resolution or settlement and reliable time frame or timeline from the date of the accident until the likely resolution of the claim; and
- Carefully reviewing the client agreement or costs agreement to ensure that you understand the proposed method of charging whether that be a fixed fee client agreement or by way of time costing and to satisfy yourself that client agreement is both fair and reasonable.
We suggest that all injured people should satisfy themselves about all of the four important considerations before they sign a client agreement in favour of any personal injury lawyer or law firm.
What to look out for and what to avoid?
Take your time
If you have made an inquiry with a personal injury lawyer or personal injury law firm and somewhat has offered to visit you at home or at hospital, we recommend that clients do not sign any legal paperwork including or especially a client agreement if you have not had the chance to read the document carefully, ask any questions that you might have and only after you have satisfied yourself about the four important considerations mentioned in this article. The only exception to this might be if a client is dying from a terminal illness and the matter is extremely urgent. In that situation it might be necessary for the client agreement to be discussed and signed at the first meeting, however, in this situation the client and any important family members should be involved so that the document to read and understood fully before it signed by the client and personal injury lawyer. Generally, speaking we strongly encourage our clients not to sign our client agreement at our first meeting and they should take their time to read the document carefully, ask questions and to be satisfied that the proposal is fair and reasonable and is being signed under no pressure whatsoever.
Who will be working on your case and what is their hourly rate?
You should be fully informed about the people who will be or might be working on your case. Will it be a lawyer and their secretary or paralegal? Will it be a team of three to five professional staff and some support staff? Who is going to charge by the hour? Is it just the professional staff or are you also going to be charged by the hour for simple administrative tasks being done by junior administrative staff members or other administrative staff members? We have seen many client agreements from other personal injury law firms which have all members of their administrative staff charging on an hourly rate including what we regard is a high hourly rate for doing simple, administrative tasks involving no professional still whatsoever. These costs can really ramp up the final bill. At vbr Lawyers, none of our administrative staff are entering time for costs and this will never change.
Estimates of Costs
When presenting the client agreement, the proposed lawyer is required to provide an estimate of the likely legal costs which will be incurred, an estimate of what legal costs can be recovered from the negligent party and what legal costs will ultimately be payable by you. Is the case likely to settle early or is it likely to be hotly contested? This is very important information which you should know before signing any client agreement. What are the key factors which will influence the range of legal costs that might be incurred? Your lawyer should be able to explain of these things and at the outset.
If the client agreement contains an uplift fee, it is important for you know what the uplift means and how it might be applied. For speculative or ‘No Win – No Fee’ personal injury claims, the Legal Profession Act 2007 allows law firms to charge an uplift of up to 25% on top of the professional costs claimed. For example, if the professional costs are $50,000.00 and an uplift of 25% is applied then the total professional costs will be $62,500.00. The uplift fee of up to but not more than 25% is allowed or permitted to compensate the law firm for the speculative or conditional nature of the client agreement as the personal injury lawyer or personal injury law firm will be paid nothing if the case is unsuccessful. The legislation requires the law firm wanting to charge an uplift fee to provide an estimate of the uplift fee or a range of estimates and an explanation of the major variables that will affect the calculation of the uplift fee.
Sounds complicated? The cut-through here is any uplift fee which is being proposed should reflect the risk associated with the case [if any] and if the case is not risky then the uplift fee should reflect the low risk. Similarly, if the case is high risk, then the personal injury lawyer or personal injury law firm would be entitled to propose a percentage at or about the higher end of the range of 0% to 25%. We have examined many client agreements from other personal injury law firms who often charge the 25% uplift whether the matter is simple or low risk or high risk. This was recently examined by the Queensland Court of Appeal in Carter Capner Law v. Clift & Ors  QCA 125 which resulted in a personal injury law firm’s client agreement being declared void.
We think charging an uplift fee of 25% in an uncomplicated or simple and/or low risk personal injury claim is unfair and unreasonable to clients and causes the client agreement to be void or voidable.
Some but not many personal injury law firms have chosen not to charge any uplift fee. Our firm is one of them. We feel that our hourly rates adequately remunerate us for the professional work we are performing for our clients without charging an uplift fee on top.
Our 30% fee cap and the 50/50 rule
Some but not many personal injury law firms offer a fee cap on professional costs. At vbr Lawyers we offer a 30% fee cap on professional costs. This does not mean we professional costs at 30% of the value of your claim generally or in all matters. The fee cap is designed to provide comfort and peace of mind to clients who may have a smaller or modest claim. Our 30% fee cap is far more generous to clients that what is permitted in the Legal Profession Act 2007 which is commonly referred to by lawyers as the 50/50 rule.
Our 30% fee cap on professional costs
If one of our clients achieves a settlement of say $30,000.00 then our professional costs cannot be more than $9,000.00. If the professional costs we have actually incurred is say $5,000.00 then we would obviously charge $5,000.00 not $9,000.00. Similarly, if a case settles for $900,000.00 and our professional costs are say $50,000.00 we charge that sum not 30% of $900,000.00 which would be $270,000.00.
The 50/50 rule
The 50/50 rule works by deducting from the settlement sum the amount of any statutory refunds and outlays and then dividing the balance by 50%.
If there is a settlement of say $30,000.00 and if the outlays or disbursements are $3,000.00 and refunds are say $2,000.00 then from the remaining sum of $25,000.00 the lawyer cannot charge more than 50% of the $25,000.00 no matter how much the professional costs might be. Therefore, using the 50/50 rule in this example the client would receive $12,500.00 from the settlement whereas any client of vbr Lawyers would receive $16,000.00 when our 30% fee cap is applied.
Our 30% fee cap on professional costs is designed to ensure that our clients receive the bulk of any settlement sum or judgment award and that under no circumstances would we receive as much or more by way of professional costs that what our clients will receive in their hand.
This blog was written by Greg Black, Director
Phone: (07) 3278 0099 or Toll Free 1800 316 716