Justice Bergin, the chief judge of the Equity Division of the New South Wales Supreme Court has warned that lawyers who act on a no win no pay retainer are compromised in their ability to objectively apply the law to the facts of a particular case and therefore achieve a result that correctly applies the law. The judge was speaking in relation to a case where a client refused to accept an offer of settlement against the advice of their lawyers. The lawyers then kept the client’s file and gave him an enormous bill for the work done so far on the basis of the costs agreement between the firm and him. The judge ordered that the firm return the file and pay the costs of the client in relation to the matter. It it likely to set a precedent which many lawyers will be unwilling to follow because of the new risks involved in this type of litigation.

The law society recognized the concerns of the judge, however, the Australian Lawyers Alliance, which represents many personal-injury firms, said: ”By and large, lawyers don’t allow those considerations to affect the advice they provide to clients.” This organisation also argued for the practice of contingency fees on that it provided a community service for thousands of victims of accidents who would otherwise be fighting large insurance companies by themselves. Contingency fees do indeed create access for a greater range of clients to the legal system than would otherwise be possible on a ‘billable hour’ basis. The problem appears to arise in relation to the inability to get a clear retainer negotiated between the firm and the client which the client is fully satisfied with and can accept the consequences of. The debate about contingency fees is unlikely to go away any time soon because the practice is now so wide spread.