'No win, no fee' advertising ban is ridiculous

The Queensland State Government recently moved to ban radio and TV advertising by non-lawyer injury compensation “claims harvesters” - spruikers who tout for compensation work, then hawk the files to lawyers to pursue the case.

Lawyers who “buy” these files can then pass on the spruiker's fees to clients by way of “administrative charges”. In some cases hidden fees of up to $8,000 are charged. It’s deceitful and it undermines the “no win, no fee” service traditionally offered by many law firms.

“Claims harvesters” are a contentious issue within the legal profession and despite public stereotypes, few law firms use them. The spruikers work outside legal restrictions on lawyer advertising and their methods only add to the unfortunate stereotype of “ambulance-chasing lawyers”.

Injury compensation work is one of the most maligned and misunderstood specialties within the legal profession, in part because there are some lawyers who use dodgy practices, including “claims harvesters”. It has been known for a car accident victim to awaken in hospital with a claims harvester’s business card in their pocket. The spruikers promise large sums of compensation money but do not tell the client they could be billed thousands of dollars in hidden “costs” - whether they win or not.

As a WorkCover and compensation lawyer I support measures to safeguard the rights of the public, and because of this, the advertising ban on “claims harvesters” is warranted. They do nothing to enhance “no win, no fee” compensation cases, and in fact only serve to undermine what is an important service to the community.

Stereotypes aside, people who have been injured due to another person’s negligence have a right to seek compensation. However, funding a compensation case can be a financial burden for the victim. The “no win, no fee” service has been with us for years. This method entails the lawyer agreeing to represent the injury victim at no cost, unless and until the victim wins the case. That’s the way it should be.

Unfortunately some lawyers apply a loose interpretation to the term “no fee”. It should mean no cost whatsoever to the client unless the client’s case succeeds. However some lawyers, especially those using “claims harvesters”, argue the “fee” only relates to their professional fee and irrespective of the case outcome, the client is liable for costs and disbursements - that’s where hidden “claims harvesters” fees sneak in.

So how can the public know up front what sort of lawyer they are engaging for their compensation case? Due to state government restrictions on “no win, no fee” advertising, the public has no way of knowing which lawyers to avoid, or who will give them a fair service.

The advertising ban was imposed ostensibly to deter “frivolous” claims, following a pressure campaign by the insurance industry. The ban ignores the fact that law firms offering “no win, no fee” services do not accept frivolous cases which have no chance of success.

The advertising ban effectively delivers injury victims into the clutches of some unscrupulous lawyers who charge for services for which no fee should be charged.

I believe Attorney-General Linda Lavarch should move to scrap the “no win, no fee” advertising ban because it deprives the public of its right to know about access to legal services. If people do not know their rights and entitlements, it’s too easy for them to fall into the clutches of unethical lawyers.

In a recent high-profile disciplinary case, a prominent Queensland lawyer faced charges including one of charging a client fees for a case in which the client should not have been billed.