What Is The 50/50 Rule?

If you have a personal injuries lawyer in Queensland assisting you with your personal injuries claim on a no win, no fee basis then there is a rule which will apply to your fees called the 50/50 rule. It is important you understand this rule when choosing a lawyer to assist you with your compensation claim as it can impact your claim and the amount of money that you receive at the end.

The 50/50 rule restricts the amount that the law firm can charge you in fees and was introduced to ensure that those bringing a claim were not left out of pocket when pursuing a compensation claim.

The 50/50 rule stops a law firm charging you more than 50% of your settlement for their fees, after refunds and outlays have been deducted.

The rule is as follows:

Maximum Fees = Settlement Amount – Refunds and Outlays ÷ 2

For example, if your personal injuries claim settles for $100,000 and you have a refund to Medicare of $1,000, a refund to Centrelink of $4,000 and outlays of $5,000 for barristers fees and medical reports the 50/50 rule means the law firm cannot charge you more than $45,000 for their legal fees. The calculations are as follows:

If the law firm’s fees are $60,000 the maximum amount they can charge you under the 50/50 rule is $45,000. However, if their fees are $30,000 they can only charge you $30,000 and cannot automatically take half of your settlement.

Whilst a law firm is entitled to charge in accordance with the 50/50 rule we believe this is unfair and that an injured person deserves the largest share of their settlement. That is why we cap our fees at one-third of the net settlement. Applying that to the above example it would mean you would get $60,000 in your hand instead of $45,000 which will assist you to move forward with your life. The calculations are as follows:

However if our fees are less than one-third of the net settlement we do not automatically take one-third of the net settlement.