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Navigating a personal injury claim in New South Wales can be overwhelming, especially when it comes to understanding the legal costs involved. To help clear up confusion, we’ve compiled answers to five of the most frequently asked questions by plaintiffs about legal costs in personal injury matters.

1. How are legal costs determined in a personal injury claim?

Legal costs in personal injury cases are generally divided into two categories: professional fees (what your lawyer charges for their work) and disbursements (out-of-pocket expenses incurred during the claim, such as court filing fees or medical reports).

In NSW, the professional fees are usually calculated based on an hourly rate, or as a fixed fee depending on the complexity of your case. Lawyers may also provide a costs agreement detailing their fee structure before work begins. In personal injury matters, it’s common for lawyers to work on a “no win, no fee” basis, meaning they only charge if the claim is successful.

However, keep in mind that “no win, no fee” does not cover disbursements, so you may still need to cover these out-of-pocket costs throughout the claim process. You can read our article on Carroll & O’Dea Lawyers ‘No Win, No Fee to Us’ policy here.

2. What is a “no win, no fee” agreement and how does it work?

A “no win, no fee” agreement means that your lawyer’s professional fees will only be payable if you achieve a successful outcome in your case—whether through settlement or a court judgment. This arrangement provides plaintiffs with access to legal representation, without having to pay large upfront legal fees.

However, it’s crucial to carefully read the terms of the agreement, as different law firms may have varying conditions. For example:

• Disbursements are not usually covered, so costs for medical reports, expert witnesses, and court fees may still need to be paid, regardless of the case outcome.
• Some lawyers may include an uplift fee, an additional amount charged if the claim is successful, which compensates the firm for the risk it took in taking on your case.

3. Will I have to pay the other party’s legal costs if I lose my claim?

In NSW, if you lose your personal injury claim, there is a risk that you may be ordered to pay the other side’s legal costs. This is known as an adverse costs order, and it’s standard in litigation cases.

The court usually orders the losing party to pay the winning party’s costs, though the amount will depend on various factors, including how the case was conducted.

To mitigate the risk of an adverse costs order, lawyers may advise considering settlement offers before proceeding to trial, as early settlements can reduce both your costs and the risk of any unfavourable court decision.

4. What are “party-party” and “solicitor-client” costs?

Legal costs can be classified as either ‘party-party’ costs or ‘solicitor-client’ costs:

• Party-party costs – these are costs that the losing party is ordered to pay the winning party after a judgment or settlement. The amount is generally less than the total costs incurred and is based on what is considered reasonable and necessary to conduct the case.
• Solicitor-client costs – these refer to the full legal costs you owe your lawyer under your costs agreement. These are usually higher than party-party costs, as they cover additional services that may not be recoverable from the other side, such as extra time spent consulting or preparing your case.

If you win your case, you may be entitled to recover some or all your party-party costs from the defendant. However, the difference between what you recover and what you owe your solicitor (solicitor-client costs) will need to be covered by you.

5. How can I estimate my legal costs for a personal injury claim?

Estimating legal costs can be tricky, as each personal injury claim is unique. However, your lawyer should provide you with a costs estimate following your initial consultation, along with a costs disclosure in writing, outlining at length the expected professional fees and disbursements.

Factors that influence the cost of your claim can include:

• The complexity of your case – more complex cases with severe injuries or disputes about liability will take longer to resolve and incur higher costs.
• The duration of the claim – cases that settle early will usually be cheaper than those that go to a contested hearing.
• The need for expert witnesses – obtaining independent medical opinions and expert reports adds to the costs of your claim.

It’s essential to regularly communicate with your lawyer about the ongoing costs and whether the case is progressing as expected. In some instances, your lawyer may be able to provide an updated estimate if the case becomes more complicated than anticipated.

Understanding the legal costs involved in a personal injury claim can be daunting, but by knowing the basics of how fees work, the differences between various types of costs, and the risks involved, you can make informed decisions when pursuing compensation. Always consult with your lawyer about any concerns you have, and ensure you receive a clear costs agreement before proceeding with your case.