Changing legal representation during a Total & Permanent Disability (TPD) claim is not unheard of. Sometimes clients lose confidence in their existing firm, or they believe that a new law firm/lawyer brings additional experience or resources, which make a client decide to move on. But switching law firms while a claim is underway, especially under a no win, no fee arrangement, does come with potential complications.
In this blog, we explain what you should consider, how fees and disbursements may be handled, and what “undertakings to pay costs” mean in this context.
Reasons people decide to change lawyers when doing a TPD claim?
Some common reasons clients look to switch lawyers:
- They feel their current firm is not communicating or progressing the matter.
- The claim is taking too long, and/or you are not getting regular updates.
- The firm lacks experience with appeals or complex medical issues arising in the claim.
- A better-suited firm (or specialist) is recommended or becomes available.
- There is a breakdown in trust or relationship.
Changing is legally possible. You always retain the right to choose your legal representative, but doing so in the midst of a claim requires careful navigation to avoid unintended cost exposure, delays or conflict.
What should I consider before changing lawyers on my TPD claim
Review your existing cost agreement
First, locate and read the existing cost agreement you signed with your current lawyer. In most cases, your TPD cost agreement will be a contingency or “no win, no fee” agreement.
Your cost agreements should tell you:
- how and when the agreement can be terminated;
- what is payable by you on termination for the work already done and disbursements (see below) incurred on the claim;
- whether the agreement gives the firm an interest in documents or materials they assembled - sometimes called a lien or equitable lien;
- what rights the law firm has to recover costs from you.
Some cost agreements may:
- stipulate that if you terminate, the prior firm retains a lien over materials or has a right to be paid for work “reasonably done” to that point;
- say that, if you terminate the agreement early, the law firm has a right to charge you the full amount payable under the agreement or just an amount for the work which they have done so far on the claim;
- say that the amount is payable immediately, regardless of whether you win your claim.
However, in many cases, you can negotiate a deferred payment, which is conditional on you winning your claim.
What do I usually have to pay if I terminate my “no win, no fee” cost agreement?
Most “no win, no fee” cost agreements will require the following to be paid upon termination of the agreement by you:
Disbursements
Disbursements are third-party fees, for example, expert report fees, medical records retrieval, and court filing fees. Disbursements are typically not waived if you decide to change lawyers. You will probably remain liable for disbursements already incurred by the original firm prior to termination and you may be required to pay for these expenses immediately.
Fees for work done
It depends on the wording of the cost agreement. Some “no win, no fee” arrangements permit the firm to claim for work done proportionally or based on the work which has been done to date worked out hourly or based on a scale of costs.
The original firm may demand payment (or a portion) of those costs before handing over files or materials to the new firm.
Undertaking to pay costs - what if I can’t pay the old firm’s fee?
An undertaking to pay costs is a promise to pay the legal costs of the other party at a later time or if something happens in the future (e.g. you win your claim).
Your new lawyer may be willing to give your old lawyer an undertaking to pay the previous firm’s legal fees and disbursements from your successful TPD monies, if your claim is approved. This can sometimes help resolve disputes between you and your old lawyer about unpaid legal bills.
Also, if accepted by the previous lawyer, this arrangement can help to protect you from having to pay them if you are unsuccessful with your claim.
Should I change my lawyers partway through my TPD claim?
This is not a decision to make rashly, and there are a number of factors to consider.
The costs and risks to you can be significant, and making changes can delay your claim. Having said that, if you are not getting good service or have lost confidence in your lawyer, changing lawyers may be the only way that your claim can proceed with confidence.
Potential barriers to changing lawyers can be overcome with undertakings and other arrangements, and we have had clients who have moved to our firm that were better off, even after having to pay our fees in full and a contribution to the original firm’s fees. This was because we charge so much less than some of our competitors.
If you are with a firm currently and you’re unhappy or have some concerns, we are happy to chat to you about the pros and cons of leaving and help you to make an informed decision. We provide free initial advice, so it costs you nothing to find out where you stand.
Contacting Berrill & Watson
📞 Melbourne: 03 9448 8048
📞 Brisbane: 07 3013 4300
📞 Anywhere else in Australia: 03 9448 8048
How we charge
We are Australia's best-value superannuation/insurance law firm. Other law firms charge nearly double (& sometimes more than double) what we charge. So, if you get a quote from them, or have a cost agreement, ask us what we will charge you.