No Win No Fee Arrangements. Do They Really Work?
There is no doubt that the slogan “No Win No Fee” has had a powerful effect on distressed employees seeking legal advice. It is often the first thing a fired or dismissed employee may want to consider, because they have just been unfairly dismissed and may have limited funds.
Employment lawyers and employment advocates call these kinds of arrangements contingency fees. The positive is that, in some circumstances, such arrangements can offer access to justice for those that wouldn’t otherwise have the financial means.
But, if it sounds too good to be true, it probably is. Let’s examine why an employee may want a No Win No Fee arrangement. Mainly, the employee wants to avoid costs risk of losing and coming out with a legal bill. However:
- Employees with good legal cases in ordinary circumstances can expect the employer to at least contribute significantly to their legal costs.
- A good employment lawyer or employment advocate should be able to appraise the strength of the case. This would include a proper calculation of costs exposure and outcomes.
- The No Win No Fee employment advocate should already know what your case is worth after meeting with you.
- The risk is that they will decline to take on any matter where the case is not strong enough. The risk may even be that they take on only sure-fire cases to ensure they get paid.
The Risks
So, you chose to be represented by a No Win No Fee representative for your unfair dismissal claim. Let’s look at what could happen in such an arrangement.
If your case is good, then you would most probably have had your fees met by the employer anyway.
However, you have chosen the advocate on the basis of the fee arrangement, not the experience, win rates, or skill. They may not be the best employment advocate for you, or the best value.
Some No Win No Fee advocates operate from home, work in isolation, and lack training and skills. Specifically, they lack experience because they only want to settle, get paid at any level, and move onto the next case. Another issue is that the No Win No Fee employment advocate would minimise their own risk of not getting paid by encouraging acceptance of a settlement below the value of compensation appropriate to the facts of a matter.
“No Win No Fee” arrangements increase the risk that you will be encouraged to settle for less than your case is worth.
Next is the No Win No Fee advocate experienced? Do they have runs on the board? Do they really know the law? You can search your representative here, just put their name into the key words.
You can of course search Robert Thompson or click the link: Employment Relations Authority: Robert Thompson.
Is No Win No Fee Really Cheaper?
The reality is that if you hire a competent lawyer or advocate, your legal costs shouldn’t exceed 25% of your settlement. Further, if you hire a competent lawyer or advocate, you should have had your case carefully considered and told if you have a good case.
The average No Win No Fee percentage (without disbursements) will/could charge 33%. The cost breakdown could look like:
| Settlement payment | No win no fee Percentage | Legal Costs | You are Left With… |
| $6,000.00 | 33% | $4,020.00 | $1,980.00 |
| $7,000.00 | 33% | $4,690.00 | $2,310.00 |
| $8,000.00 | 33% | $5,360.00 | $2,640.00 |
| $9,000.00 | 33% | $6,030.00 | $2,970.00 |
| $10,000.00 | 33% | $6,700.00 | $3,300.00 |
| $11,000.00 | 33% | $7,370.00 | $3,630.00 |
| $12,000.00 | 33% | $8,040.00 | $3,960.00 |
| $13,000.00 | 33% | $8,710.00 | $4,290.00 |
| $14,000.00 | 33% | $9,380.00 | $4,620.00 |
| $15,000.00 | 33% | $10,050.00 | $4,950.00 |
| $16,000.00 | 33% | $10,720.00 | $5,280.00 |
| $17,000.00 | 33% | $11,390.00 | $5,610.00 |
| $18,000.00 | 33% | $12,060.00 | $5,940.00 |
| $19,000.00 | 33% | $12,730.00 | $6,270.00 |
| $20,000.00 | 33% | $13,400.00 | $6,600.00 |
What is the alternative then to no win no fee?
We provide a free initial consultation to prospective clients. In that time, we appraise the strength of the case, the likelihood of your fees will be covered by the employer, and a proper risk assessment. That way our clients know from the beginning the risks and they can be guaranteed strong advocacy. Our clients will also be safe in the knowledge that we operate as professionals, covered by a code of conduct, legally trained staff, and all staff are required to attend mandatory training throughout the year to keep up to date.
In most cases, we make sure we obtain costs for you and ensure that you get the maximum settlement in your hand. We have been operating for over 30 years, so our reputation is well known for success.
We don’t charge up front, and don’t do intermittent billing. If we determine that you have a good case we know how to manage your case for the maximum result.
But if you do want a No Win No Fee arrangement talk to us. We do enter into arrangements with clients.
Whilst running your claim we may incur general expenses The cost of these services or expenses is called a disbursement, and we would discuss these with you in advance, but they are things such as application fees to a court, for one example.
If you really want to win your unfair dismissal or personal grievance case, contact us on (03) 383 9988 or through email at admin@irt.nz.
Robert Thompson
IR Thompson Associates Ltd.