In Queensland, a rule applies in cases where the legal professional fees that could be charged under the Costsii Agreement would otherwise cause an injured person to be left with little or no money in the hand from their settlement sum. The rule is called the '50/50 Rule' and can be found at Section 347 of the Legal Profession Act 2007. The purpose of this Rule is to ensure that an injured claimant or plaintiff always achieves a fair share of their recovered damages.
How the 50/50 Rule works is as follows:
1. Firstly you take the total gross settlement amount to be received for your claim.
2. From this is deducted any statutory refunds to be paid from your settlement sum. Statutory Refunds are such things as refunds due to Workcover Queenslandii, Medicare Australia, DEEWR and Centrelink. Also to be deduced are disbursements incurred in the running of your claim, such as medical report fees, barrister fees, court filing fees etc.
3. After these deductions are made, the resulting sum is then divided by two.
4. The end result is the total amount that you can only be charged for professional costs for your claim (including GST).
For example, if your claim settled for $50,000, and fees under the Costs Agreement were, say $25,000, then professional costs could only be charged under the 50/50 Rule as follows:
· ½ x ($50,000 less (statutory refunds of say $5,000 in total, plus, disbursements of say $7,500), which is ½ x ($50,000 - $12,500) and equates to ½ of $37,500 = $18,750.
So the total of professional costs that could only be charged would be $18,750, despite legal fees really being $25,000.
If you wish to discuss a personal injury matter arising in Queensland, you should call us The Personal Injury Lawyers who may be able to assist with any claims or queries.