One of the most common questions injured people ask when starting a compensation claim is: “what percentage of my claim will I have to pay you?”, or alternatively“another competitor firm has offered to charge only X% of my claim – will you beat that?”
Here’s what you need to know: charging legal fees as a percentage of your settlement (called contingency fees) is illegal in Queensland under section 325 of the Legal Profession Act 2007. Unfortunately, we are well aware that some law firms calculate fees on this basis.
GC Law Does Not Charge on a Percentage or Contingency Basis
Contingency fees are an unfair way to calculate legal fees.
Why should your lawyer charge you higher fees, simply because you have suffered a serious injury or more substantial losses than another client?
Why Contingency Fees Are Unfair to Injured People
In our experience, contingency fees are unfair to our injured clients. When legal fees charged as a percentage of a settlement, it distorts legal incentives and undermines the very justice that they claim to promote.
Here’s how:
The Math Doesn’t Match the Work
Most personal injury contingency agreements charge between 25% and 40% of your total compensation, no matter how much work your case actually needs. This percentage stays the same whether the matter:
- Settles informally at an early stage, or
- Takes years of complex court litigation
You Pay the Same for Very Different Work
In many cases—particularly motor vehicle accidents or straightforward liability claims—settlement occurs early, with minimal discovery and limited court involvement.
Yet the fee remains the same.
A lawyer may spend tens of hours on a case and receive hundreds of thousands of dollars, while the injured claimant, who bears the physical, emotional, and financial consequences of the injury, loses a substantial portion of their compensation.
This lack of proportionality would be unacceptable in almost any other professional service. No other field routinely charges a fixed percentage of a client’s outcome regardless of effort, risk, or time invested.
The “Risk” Argument Doesn’t Hold Up
Contingency fees are often justified on the basis that lawyers assume the risk of non-payment. But here’s the reality: Personal injury lawyers carefully screen cases before accepting them. They typically reject claims with:
- Unclear liability
- Low insurance coverage
- Complicated causation issues
The cases they accept are often those with high probabilities of settlement and predictable outcomes. In addition, many firms manage risk by handling cases in large volumes, ensuring that losses in a small number of files are offset by significant gains in others.
Contingency Fees Create Conflicts of Interest
Because lawyers are paid based on the total amount recovered, they may be financially better off settling quickly rather than pursuing maximum compensation through litigation.
For example, settling a case for $300,000 after six months may generate a larger effective hourly rate for a lawyer than spending two years litigating for a $450,000 verdict. The additional compensation for the client may not justify the additional effort from the lawyer’s perspective.
This dynamic can pressure claimants into accepting settlements that prioritise efficiency and firm profitability over full and fair compensation.
The Bottom Line: Contingency Fees Hurt Injured People
Contingency fees inevitably lead to outcomes that are often unfair to the very people they are meant to protect. When injured claimants lose a third or more of their compensation—sometimes for modest legal effort—the promise of “access to justice” rings hollow.
A fair legal system should ensure that compensation serves its primary purpose: restoring injured individuals as much as possible, not enriching intermediaries.
Warning: Contingency Fees Are Illegal in Queensland
If your lawyer offers to charge fees calculated as a percentage of your claim, they are acting illegally and unethically.
At GC Law, we charge fair fees based on the actual work required for your case – not a percentage of your hard-won compensation. Your settlement should go toward your recovery, not inflated legal bills.
If you’ve been injured, contact us now.
