Anecdotal evidence suggests that the increase in scale for such cases in the previous system was about 40%. If that is the case, the probability of a maximum premium rate set at 25 % is either a reduction in such cases taken over by the profession or upward pressure on the base rate on the basis of which the premium is calculated, so that the return is identical to a 40 % increase in the scale. Regulations may be issued to vary the maximum percentage of costs or to distinguish between circumstances: § 187 paragraph 4. Some commentators are optimistic that this article will allow the government to increase the percentage of the premium. It is much more likely to be used to reduce the premium in certain sensitive areas of consumption. An agreement on contingency costs may relate to proceedings before a court, but may not relate to criminal proceedings: Article 184(3). This section is inclusive rather than exclusive and, while not explicitly stated, it seems clear that a conditional cost agreement can be entered into for non-contentious work. You cannot have a conditional cost agreement in a criminal or family law case. You can set the condition in your cost agreement that you will only be paid for your work if you get a successful result.
An example of this is a “no gain, no fees” agreement. For any legal question, regardless of its value, you must have a cost agreement with your client. Even if the case is likely to be less than $750 and you don`t need to provide a full cost statement, you still need to have a cost agreement. Contingency cost agreements for road accidents You will not be able to charge your customer if they have not accepted your cost agreement. Some cost agreements may be accepted in writing or in some other way that clearly states that they accept them. If you propose a “conditional cost agreement” (i.B no win-win agreement at no cost), it can only be accepted in writing. A “cost agreement” is part of your obligations to disclose costs to your client. It is the formal agreement between your law firm and your client that governs how you structure the cost of your work.
The Legal Advisory Council has prepared a fact sheet on cost agreements, which is available on its website. A conditional cost agreement is an agreement under which the payment of all practitioner fees depends on the successful decision of the case in which the administrator provides legal services: Legal Profession Act 1987, sections 186(1) and (2). Some comments were made regarding the use of the word “all” in this definition, the suggestion being that a practitioner cannot enter into an agreement that is partly conditional (with the exception of payments, which can be excluded: subsection 186(5)). The alternative proposal is that such an agreement would not be covered by the restrictions on the maximum eligible premium discussed below. An important prohibition is contained in § 188. A cost agreement does not provide that costs are to be pro-rated or change based on the amount recovered in a procedure to which the agreement relates. This is a clear prohibition of what are now called contingency fees. Read it, this section would only prohibit the use of appropriate language in a cost agreement. That seems to be the meaning. However, with a broader meaning, this section could be used to attack any agreement that has an element of incremental scaling. For example, it is probably fair to assume that compensation costs vary approximately depending on the award awarded.
Practitioners are currently known to report estimated costs in areas related to the areas of scholarship. How this is expressed in each case needs to be carefully considered. The requirement to define the concept of “positive outcome” in contingency cost agreements will undoubtedly be considered and considered before the cost assessors and the court. The section of a conditional cost agreement that defines the positive outcome of a case must be worked out very carefully and clearly explained to the client. When drawing up such agreements, practitioners should consider the possible outcomes of their case. This may be a situation where a case is successful in the first place but is then challenged, or when a case is partially upheld, or when some form of set-off is applied to an arbitral award. Note, however, that it has become a general policy of cost assessors not to allow the very increase of a compensation cost order in party/party valuations, since the criterion applied is “What is reasonable?” and an appraiser is not required to assess the costs of the party/party in accordance with each individual agreement entered into on an attorney/client basis: see Madden/NSW Insurance Ministerial Corporation [1999] NSWSC 196 (15 March 1999); (unreported, Sup Ct NSW, Master Malpass, 15 March 1999). An agreement on contingency costs may exclude disbursements of costs that are payable only if a matter is successfully resolved: § 186 paragraph 5. You can only charge fair and reasonable costs for the work associated with the legal issue. Your costs should also be reasonable and proportionate to the amount of work involved. There are strict rules on how to deal with cost agreements. If you do not follow these rules, the contract may become invalid even if your client has accepted it.
If you think your customer has a good chance of success, you can also specify a condition to pay an “increase fee.” This is an additional payment for a positive result, which must not exceed 25% of the process costs (excluding payments). Your cost agreement should clearly state how the fee will be calculated, what you expect from the fee, and what factors may change the final fee calculation. If the case is successful, an agreement on contingency costs may provide for a premium on costs otherwise payable: Article 187(1). The premium must be a percentage of the costs otherwise payable or a certain amount. The premium must be indicated separately in the contract: § 187 (2). The maximum premium is 25 %: Article 187(3). Since the costs are defined to include disbursements under Article 3(1), there does not appear to be any prohibition in the law on providing for a premium for disbursements. The process of entering into a conditional cost agreement will consist of two clear phases.
It appears that the intention is for practitioners to first agree on fair and reasonable prices with their clients, and then agree on a premium on those fair and reasonable prices. The maximum premium of 25% is not high given the potential risk that exists in some of the less certain conditional cases. These “contingency cost agreements” must be in writing and in plain language. They must contain all the conditions that you define as a positive result, and they must be accepted in writing, otherwise they cannot be applied.. .
