Conditional Costs Agreements · Legal Profession Uniform Law
No win, no fee explained: what the agreement actually says
"No win, no fee" is a Conditional Costs Agreement. It is a private contract between you and the firm, governed in NSW and VIC by the Legal Profession Uniform Law and elsewhere by state-equivalent legislation. This page explains what is and is not covered, what an uplift fee is, what voids the agreement, and how to read one before you sign.
★Key takeaways
- ✓"No win, no fee" is a Conditional Costs Agreement under the Legal Profession Uniform Law (NSW + VIC) and state-equivalent legislation elsewhere. It is not a loan and it is not legal aid – it is a private agreement between you and the firm.
- ✓You generally do not pay professional fees if the case is unsuccessful. You may still owe disbursements (medical reports, court filing fees, barristers) unless the firm has agreed in writing to cover them.
- ✓Uplift fees are capped at 25% of legal fees under LPUL – but uplift fees cannot be charged in damages claims (s182 LPUL). The "no win no fee" benefit in personal injury is the conditional discount, not an additional uplift.
- ✓A written Costs Disclosure Notice + Costs Agreement is required before work begins. You have a cooling-off period and can have the bill independently assessed at the end.
- ✓This page is general information, not legal advice. Read any costs agreement carefully before signing. Speak with the firm’s costs lawyer if anything is unclear.
The two cost categories
Professional fees vs disbursements
Every personal injury costs agreement separates two distinct categories. Knowing the difference is the single most important thing before signing.
Professional fees
The firm’s charges for work done by lawyers and paralegals. Usually hourly-rated or task-based. Under a Conditional Costs Agreement, these are payable only if the specified event occurs (typically: a successful outcome).
Conditional
No win → no professional fees.
Disbursements
Out-of-pocket expenses the firm pays on your behalf – medical reports, expert reports, court filing fees, barristers, photocopying. Generally owed regardless of outcome.
Generally not conditional
Unless the firm has written in that it will cover disbursements on a conditional basis. Ask the question.
In a typical Australian personal-injury matter that goes to settlement, disbursements run $3,000–$15,000 (more for medical negligence or catastrophic injury). Some firms now offer "no win, no fee, no out-of-pocket" – disbursements funded by the firm, recovered only if the case succeeds. Confirm in writing.
Uplift fees
What an uplift fee is – and is not
An uplift fee is an additional percentage charged on the firm’s professional fees when the conditional event occurs. The Legal Profession Uniform Law caps uplift fees at 25% of the legal fees – but the cap is not the most important rule.
The key rule: uplift fees cannot be charged in claims for damages. Section 182 of the Legal Profession Uniform Law prohibits an uplift fee in any matter that is a claim for damages – which captures essentially every personal injury claim.
If you see "25% uplift" written into a personal injury costs agreement, ask the firm directly: is this matter being treated as a claim for damages, and if so, on what basis is an uplift fee being charged? In personal injury practice, the conditional-fee benefit is that the firm carries the risk of receiving nothing if the case fails – not that the firm is entitled to an additional bonus on success.
What voids or ends the agreement
When the conditional element kicks in (or doesn’t)
Case won or settled
Firm is paid its agreed professional fees plus disbursements, generally deducted from the settlement before the balance is paid to you.
Case lost at trial
No professional fees owed. Disbursements may still be owed unless covered by the agreement. Adverse-costs orders (the defendant’s costs) are a separate exposure; see "adverse costs" below.
Client withdraws against advice
The firm may be entitled to fees and disbursements for work done. Most agreements contain a clause to this effect. Read your specific agreement.
Costs Disclosure not provided
If the firm did not provide proper costs disclosure as required by LPUL, the costs agreement can be set aside and costs assessed on a quantum meruit basis.
Adverse-costs orders are a separate issue
If you lose at trial, the court can order you to pay the other side’s legal costs. This is independent of your costs agreement with your own lawyer. Many firms recommend After-the-Event (ATE) costs insurance for matters likely to proceed to trial. Ask the firm before commencing proceedings whether an adverse-costs order is a realistic risk in your case.
Glossary
Costs agreement terms in plain English
Conditional Costs Agreement
A written agreement under Part 4.3 of the Legal Profession Uniform Law providing that the firm’s fees are payable only on the occurrence of a specified event (typically: a successful outcome). The legislative basis for "no win, no fee" in NSW and VIC; equivalent provisions apply in other states.
Professional fees
The firm’s charges for work done by its lawyers – usually charged at an hourly rate or by reference to a task-based scale. The conditional element of a "no win, no fee" agreement applies to professional fees.
Disbursements
Out-of-pocket expenses the firm pays on your behalf – medical reports, expert witness fees, court filing fees, barristers’ fees, photocopying. Generally payable regardless of outcome, unless the firm has expressly agreed in writing to fund them on a conditional basis.
Uplift fee
An additional percentage applied to professional fees when the conditional event occurs. Capped at 25% of legal fees under LPUL. Cannot be charged in damages cases (s182 LPUL); reserved for commercial litigation and a narrow set of other matter types.
Costs Disclosure Notice
A document the firm must provide before commencing work, setting out the estimated total legal costs, charging method, and the client’s rights to negotiate, change lawyers and have costs assessed. Mandatory under Part 4.3 LPUL.
Cooling-off period
A five-business-day window during which the client may rescind a costs agreement without penalty (s184 LPUL). Applies to most personal-injury costs agreements at sign-up.
Costs assessment
An independent review of the firm’s bill by a costs assessor (in NSW) or the equivalent in other states. Available if the client disputes the fairness or accuracy of the bill. Time limits apply (12 months in most states).
Quantum meruit
Latin for "the amount deserved". Where a costs agreement is voided or a client changes firms mid-matter, the firm may be entitled to be paid the reasonable value of work done, not the contracted rate.
Before you sign
Six questions to ask the firm
- What is your estimate of total legal costs (professional fees + disbursements + any counsel’s fees) at the end of the matter, expressed as a dollar amount and as a percentage of the likely settlement?
- Are disbursements payable regardless of outcome, or has the firm agreed to fund disbursements on a conditional basis?
- Is any uplift fee being charged, and if so, on what basis given s182 LPUL?
- What is the realistic risk of an adverse-costs order in my matter, and do you recommend ATE costs insurance?
- What happens if I change firms partway through the matter?
- Can I have an independent costs assessment of the final bill, and what is the time limit for doing so?
A reputable firm will answer all six in writing without hesitation. If a firm declines or deflects, that is a useful signal.
Important
General information, not legal advice
This page describes the Legal Profession Uniform Law framework (NSW + VIC) and references equivalent state legislation. It is general information only. Costs agreements are private contracts and the precise terms vary by firm. Always read the specific agreement, ask questions before signing, and seek independent advice if you are unsure. Complaints about legal costs go to the Legal Services Commissioner in your state. See our disclaimer for the full notice.
Common questions
No win no fee – common questions
Does "no win, no fee" mean I pay literally nothing if I lose?
Not necessarily. A Conditional Costs Agreement says you do not pay the firm’s professional fees if the case is unsuccessful. Disbursements – money the firm spent out-of-pocket on medical reports, expert evidence, court filing fees, barristers and so on – are usually still owed even if the case is unsuccessful, unless the firm agrees in writing to cover them. Some firms offer a "no win, no fee, plus disbursements covered" arrangement; read the costs agreement carefully and ask the question directly before signing.
What is an "uplift fee" and is it always charged?
An uplift fee is an additional percentage charged on the firm’s professional fees when the case is successful, to compensate for the risk the firm took in running the matter on a conditional basis. Under the Legal Profession Uniform Law (NSW + VIC), uplift fees are capped at 25% of the legal fees (not 25% of the settlement). Uplift fees must be disclosed in writing and cannot be charged in claims for damages (s182 LPUL) – only in commercial litigation and certain other matter types. In personal injury, the conditional discount is the value, not an additional uplift.
Is there a maximum percentage of my compensation that goes to legal costs?
Yes. State-specific costs regimes apply. In NSW personal injury matters under the MAIA 2017, there are strict statutory costs caps tied to the size of the award. Across Australia, total legal costs in damages cases are commonly in the 25–40% range (including uplift, professional fees and counsel’s fees), subject to costs disclosure rules and the right to have costs assessed. Ask for an estimate of total legal costs as a percentage of the likely settlement before signing.
What if I want to change lawyers mid-claim?
You can change lawyers at any time. The original firm is entitled to be paid on a quantum meruit basis for work reasonably done up to the date of change, but only if the case ultimately succeeds (under most conditional agreements). The new firm typically takes on disbursements paid by the original firm by way of an undertaking. Get written confirmation of the cost implications before changing firms.
What voids a no-win-no-fee agreement?
Common scenarios: (1) the case is settled or won – the firm is paid its agreed costs; (2) the case is lost or withdrawn against the firm’s advice – usually the client owes nothing but may owe disbursements depending on the agreement; (3) the client withdraws against advice – the firm may be entitled to costs for work done; (4) the costs agreement does not comply with the LPUL disclosure rules – the agreement can be set aside and costs assessed on a quantum meruit basis. Read the agreement, ask questions, and seek independent advice if you are unsure.
Where can I check legal costs are reasonable?
Every state has a Legal Services Commissioner who handles complaints and provides costs information: Office of the Legal Services Commissioner (NSW), Victorian Legal Services Board + Commissioner (VIC), Legal Services Commission (QLD), Legal Practice Board (WA), Legal Profession Conduct Commissioner (SA), Legal Profession Board (TAS), Legal Services Commissioner (ACT). Clients also have a right to have their bill assessed by an independent costs assessor.