Employment Law
Employment Law

No Win No Fee – Is it really that simple?

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Some firms are advertising that they will only charge you if they are successful. The big question is what will they charge you if you win. Some of these firms have a base fee. For example, Employment Disputes Services Ltd or 0800SACKED, has a contract that says that out of your compensation they will take one third, plus $300.00, plus GST (the base fee); and if the matter goes to the Employment Relations Authority, they will charge in addition to the base fee, an extra $1500.00 per day of hearing or $750.00 plus GST where the case settles prior to hearing but after they have prepared your briefs of evidence and submissions, plus the $70.00 filing fee.

What does this mean in real terms and how does it compare with a firm like ours that will only charge you per hour for the work done.

First, we screen cases so that the only cases that we take have a real chance of success. EDS Ltd says that they will only take on cases that offer a reasonable chance of financial compensation being achieved. Secondly, the vast majority of cases involving compensation are settled in mediation. In our case the figure exceeds 95% and, of those cases many are settled prior to Mediation when the costs are minimal. How do our costs compare to EDS Ltd? Here are some examples. For reasons of confidentiality we cannot give you actual cases, but the figures are indicative of the outcomes our firm has achieved. The figures for EDS Ltd are based upon the contract we have seen:
Case
Compensation      Our fees       EDS Ltd
A $35,000.00      $1950.00     $13,461.19
B $8,000.00          $750.00       $3,337.20
C $15,000.00      $2450.00       $5,961.94
D $1200.00           $600.00          $787.46
E $5,000.00          $750.00        $2,212.31
F $1900.00         $1000.00        $1,049.93
G $5250.00            $710.00       $2,306.05

You should also check all the terms in the contract. The EDS Ltd contract says that if you withdraw your case against advice, make excessive phone calls then they reserve the right to charge you at $140.00 per hour and for phone charges.

Before you take on a solicitor or advocate to represent you, make certain that you find out about their reputation and background. Judging the person or firm solely on the fees they charge, the size of the firm, the titles lawyer and consultant may mislead you about the quality of the services you will get. In saying this, we wish to make it clear that we are not impliedly or expressly claiming that the services you will receive from EDS Ltd or any other company or firm charging on the basis of no win, no fee is not of good quality.

Finally, if you lose there is a fee. The Employment Relations Authority will award costs against you as a general rule. On a one day case this would normally cost you between $1500-2500.00. Therefore, if you truly want to be on a no win, no fee, then ask the likes of EDS Ltd whether they will meet your costs if you lose.

Note:

  1. This blog was first published in 2003. We have given EDS Ltd an opportunity to correct the information in the table. We advised them that if we did not hear from them we would assume the charges have not changed. If you know them to be incorrect then you are welcome to record their current charges in the blog.
  2. Costs awarded by the ERA are usually $3,500.00 for a one day hearing not the $1,500-2,500.00 reported above; and may be higher if you have received a Calderbank offer.

Published on Monday, May 26th, 2014, under Blog

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