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What you take home from a settlement: no win no fee worked example

A step-by-step worked example of a personal injury settlement in Australia, showing professional fees, a 25% uplift, GST, disbursements and Medicare and Centrelink refunds.

Updated · 4 min read

What you take home from a settlement: no win no fee worked example

Your take-home from a settlement is the gross settlement minus your lawyer's professional fees (including any uplift and GST), minus disbursements, minus any statutory or insurer refunds that must be repaid first. On a no win no fee personal injury claim it is common for a meaningful share of the gross figure to go to these deductions, so ask your lawyer for a written estimate of your net amount before you accept any offer. The worked example below walks through each deduction.

This guide is part of how to estimate legal costs. All figures are illustrative, not typical outcomes.

The deductions, in order

DeductionWhat it isWhere it comes from
Professional feesYour lawyer's time or agreed feesThe costs agreement
Uplift feeExtra fee payable on success, up to 25% of professional fees in litigationThe conditional costs agreement
GST10% on fees and taxable disbursementsTax law
DisbursementsMedical reports, barrister, court fees, investigatorsPaid by the firm, repaid from settlement
Medicare refundRepayment of Medicare benefits paid for injury-related treatmentMedicare compensation recovery
Centrelink recoveryRepayment of some Centrelink payments when compensation includes lost earningsServices Australia compensation rules
Other refundsHealth fund, income protection insurer, NDIS or employer in some casesThe relevant policy or scheme
Costs recovered from the defendantSometimes paid on top of damages, reducing what you oweThe settlement terms

Worked example (illustrative)

Sam is injured in a fall at a shopping centre and runs a public liability claim in NSW on a no win no fee agreement. The claim settles for $240,000 inclusive of costs ("all-in").

1. Professional fees and uplift

  • Professional fees recorded: $42,000 ex GST
  • Uplift at 20% (agreed in the costs agreement): $42,000 x 0.20 = $8,400
  • Fees plus uplift: $50,400
  • GST: $50,400 x 0.10 = $5,040
  • Professional fees payable: $55,440

2. Disbursements

  • Medical specialist reports: $9,900
  • Barrister for advice and mediation: $8,800
  • Filing, subpoenas and other fees: $2,300
  • Disbursements: $21,000 (all including GST where applicable)

3. Refunds

  • Medicare notice of past benefits: $5,600
  • Health fund: $1,900
  • Refunds: $7,500

4. Take-home

$240,000 - $55,440 - $21,000 - $7,500 = $156,060

That is $156,060 / $240,000 = 65% of the gross figure. Enter your own numbers in the settlement take-home calculator: the settlement as the amount, $55,440 as professional fees and $28,500 ($21,000 + $7,500) as disbursements and refunds.

"All-in" or "plus costs"?

How the offer is framed changes the maths:

  • All-in (inclusive of costs): one sum covers damages and costs. Every deduction comes out of it, as above.
  • Damages plus costs: the defendant pays damages and, separately, your costs on the ordinary basis as agreed or assessed. Those costs reduce what you owe your lawyer, but there is usually a gap you still pay from the damages.

Illustrative: an offer of $190,000 plus costs, where your ordinary-basis costs are agreed at $50,000 and your solicitor-client costs (fees plus disbursements) are $76,440. Gap = $76,440 - $50,000 = $26,440. After refunds of $7,500, take-home = $190,000 - $26,440 - $7,500 = $156,060: the same as the all-in offer above. Comparing offers on take-home is the only reliable way.

State caps on personal injury costs

  • Queensland: under section 347 of the Legal Profession Act 2007, claim-related legal costs in a speculative personal injury claim are capped by a formula based on what you are entitled to after refunds and disbursements, commonly called the 50/50 rule. A firm can apply to charge more.
  • NSW: where the amount recovered in a personal injury damages claim is $100,000 or less, costs are generally capped (commonly described as 20% of the amount recovered or $10,000, whichever is greater), with exceptions. Check the current rule with the regulator.
  • Statutory schemes (workers compensation, CTP motor accident schemes) have their own costs rules and sometimes their own caps.

If your lawyer's bill seems to exceed a cap, ask how it was calculated and see how to dispute a legal bill.

Checks before you accept an offer

  1. Ask for a settlement statement showing every deduction.
  2. Check the uplift matches the costs agreement and is calculated on fees, not on the settlement.
  3. Check disbursements against invoices; ask for copies of large ones.
  4. Confirm refund amounts with Medicare, Centrelink or the insurer's notice, not an estimate.
  5. Ask whether any costs from the defendant are included or additional.
  6. Consider tax: compensation for personal injury is generally not income, but some components, such as interest, can be taxable. Check with the ATO or an adviser.

For how no win no fee agreements are structured, read no win no fee and uplift fees. For weighing an offer against going to trial, read offers of compromise.

Frequently asked questions

Can my lawyer take their fees before I see the settlement?

The settlement is usually paid into the firm's trust account, and the firm can pay its bill from trust money only in line with the costs agreement and trust rules, which generally require a bill to be given first. You can ask for the bill and statement before money is transferred.

Does the uplift apply to disbursements?

No. In litigious matters the uplift is calculated on legal costs excluding disbursements.

What if my take-home is much less than I expected?

Ask the firm to explain each line in writing. If you still disagree, you can raise a costs dispute or seek assessment. Act quickly because time limits are short.

Sources

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