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Contingency fees position paper released

Contingency fees position paper released

By Andrew Tabone

Advocacy Civil Procedure Contingency 


Law practices in Victoria are currently prohibited from charging contingency fees (also known as damages - based billing) in relation to matters involving disputes or litigation. Given the recommendations of the Productivity Commission following its Inquiry into Access to Justice Arrangements, it is timely to consider whether the prohibition on contingency fees should be removed.

A competitive and progressive legal environment is enhanced when consumers of legal services are provided with a choice of legal cost options which best suit their particular circumstances. Having access to a range of legal cost alternatives enables consumers to make more informed assessments as to whether or not engaging those legal services will benefit them. Removing the prohibition on law practices charging contingency fees would facilitate access to justice by providing another method by which legal costs can be agreed upon, thus enabling some claims to be brought which would otherwise not be brought due to lack of funding.

Permitting law practices to charge contingency fees would encourage early resolution of disputes as it presents an incentive to law practices to more efficiently deal with legal matters in which they are acting. This is because the earlier a dispute is resolved, the earlier the law practice will receive its legal fees.

The Law Institute of Victoria (LIV) has long advocated for the introduction of contingency fees. The cost of accessing justice within Australia has reached the level where many middle - income earning Australians, individual traders, partnerships and small and medium enterprises cannot afford to pay up front or at all to litigate matters. Legal aid resources are limited, and face record levels of demand. Legal aid is rarely available in civil proceedings. The LIV contends that alternative billing methods are required so clients who do not qualify for legal aid can access the services of private law practices.

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Andrew Tabone, Paralegal, Litigation Lawyers Section

T: 03 9607 9365

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