As the Royal Commission continues to highlight the extent of child abuse that has occurred in institutions, the survivors of this abuse are turning to the law to assist them in their search for justice, reparation and hopefully some closure.
For many, this approach to a lawyer will be the first time they have disclosed the abuse, and they are relieved and grateful to discover the lawyer is prepared to not only consider their claim but is also prepared to act on a no win no fee basis. But, before signing a cost agreement with a law firm it is vital that survivors take the time to consider the implications of the agreement they are signing up to.
Often, this is the first time they have ever dealt with a lawyer and the process can be overwhelming. What makes this more difficult is that, as a whole, lawyers are very protective about the nature of their retainers and how much they are charging survivors of abuse (or any clients). What this means is that there is very little information available that allows survivors to make an informed decision regarding the reasonableness of a cost agreement. To assist I have created a checklist of 6 questions survivors should be asking when looking at a cost agreement from a law firm.
1. what is the hourly rate for lawyers?
The charge out rate should vary significantly depending on a solicitor’s experience. You would not expect the charge out rate for a first-year solicitor to be anywhere near the expense of a partner or a senior lawyer that has a wealth of experience.
At Donaldson Law our charge out rate, at the time of writing, is $600 per hour plus GST for senior solicitors and $450 per hour plus GST for junior solicitors. Further, this is a flat rate. There is no uplift (added amounts) for success/risk/care and consideration. (see Question 3 for further explanation of this)
2. what is the hourly rate for paralegals?
An experienced paralegal works closely with the lawyer and provides essential support in preparing a matter for trial or mediation. The charge out rate that firms adopt for paralegals will vary greatly between firms.
At Donaldson Law our hourly charge out rate for paralegals, at the time of writing, is $250.00 an hour plus GST. All our paralegals either have extensive paralegal experience or have extensive experience in the health industry or law enforcement sector. It will be appreciated, given the nature of the work we do, that life experience and a high level of communication skills and empathy is essential for any paralegal assisting survivors of abuse.
3. is there an ‘uplift’ or ‘success’ or ‘care and consideration’ fee on top of any hourly fees?
Many firms add a further percentage amount (usually 25%) to the hourly rate for their lawyers and paralegals, to represent the risk that the firm is taking in accepting the case on a speculative/conditional/no win no fee basis. The amount is also designed to take into account the fees and costs associated with the case that have to be carried by the law firm. Ordinarily this would seem fair for high risk matters, where there is a significant risk that the file will not result in a successful outcome. However, an experienced lawyer will be able to gain a good appreciation of the strengths and weakness of a case at the outset. In most cases the lawyer will be able to judge whether liability will be able to be proved or not. If the lawyer feels that proving liability will be possible, this greatly reduces the risk the law firm is taking in accepting the case.
We also know that, generally speaking, the institutions’ approach to handling claims has changed and the majority will adopt a collaborative approach in trying to resolve claims. In some cases the facts will be compelling which reduces the risk considerably. If this is the case, the survivor is well within their rights to negotiate with the firm that there be no uplift or a reduced uplift. Firms may be reluctant to negotiate this as they rely on the uplift to improve the profitability of the firm. Further, by maintaining the uplift on all files it allows them the luxury to run more high risk files. That is, the uplift on the low risk files funds the high risk files.
At Donaldson Law, at the time of writing, we do not charge any uplift on survivors’ cost agreements. We have made a conscious decision that we will not charge any uplift on survivors’ claims. If we accept a claim, we back ourselves to achieve a resolution. If we are unable to, then there is generally no charge to the client and we are happy to refer them to another firm if litigation is the only option.
4. is there a cap on your fees?
In some state and territories there is legislation that “caps” the amount of fees that can be charged by legal firms acting for survivors. Generally, the cap imposed by law, is 50% of the settlement money less statutory refunds and legal outlays (i.e. reasonably incurred expenses paid by the legal firm) but in some states, it is 20% for matters where the settlement is less than $100,000.
At Donaldson Law we keep a close eye on the legal fees our clients end up paying and at the date of writing our client’s average legal fees are less than 25% of the settlement money (less statutory refunds and legal outlays). We stress this is only an average, but it is a far cry from the 50% cap.
5. what charges are there for admin. tasks including scanning, facsimiles and postage?
Generally, lawyers are able to recover from the client all reasonably incurred expenses which includes admin. expenses for facsimiles, postage and scanning. Most often, this is calculated either on a per page basis or on time spent. On a significant file, where there are extensive tax records and documents disclosed, these charges can be considerable. In some cases the amount charged to a client may well exceed the actual cost to the firm and is another way of increasing the profitability of the firm.
At Donaldson Law we do not charge any amount in relation to facsimiles, postage and scanning. We developed our practice focusing on using technology and electronic files to increase the efficiency of the firm. We do incur some costs relating to these expenses, but we carry them as a firm, and don’t pass them on to our clients.
6. will a litigation funder be used?
Increasingly, large law firms are encouraging or requiring clients to enter into a loan agreement with a litigation funder to pay for the expenses of running the claim. The nature of the agreement with the litigation funder is that they will fund the outlays/expenses such as medical and liability reports and in return, at the completion of the file, they will be reimbursed the amount that they have incurred as well as interest. The benefit for the legal firm is they are not burdened with carrying the outlays which can be significant if the firm has a large volume of claims.
At Donaldson Law we carry all expenses associated with survivor claims. We are large enough to carry the expenses and small enough that we are not burdened by running high risk claims where outlays can be significant.
For survivors, and indeed most people, engaging a lawyer is always going to be stressful and the issue of your lawyer’s fees and charges is only one consideration in choosing the right lawyer to assist you. However, while only time will tell if you can forge a strong working relationship with your lawyer, the details of how you will be charged is more certain. I would also hasten to add that most lawyers assisting survivors of abuse are not driven by fees. It would be very rare to come across a lawyer working with survivors who did not feel privileged to assist them.