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Legal Costs and Negotiated Settlements

Negotiations


The negotiations leading to a settlement can be really stressful. Make sure you have someone on your team with whom you can discuss it. It might not be your lawyer. Find a level-headed colleague; it should be one who can actually get on top of the detail and think along with you. Make sure s/he is able to be contacted or is present at any negotiation with the other side. If your lawyer doesn’t like it, then insist; tell him/her it is not negotiable.

Most importantly, if you are heavy and tight in the chest and feel like you are being done over, say 'no' and get out of there to fight another day, because you probably are being taken for a fool and you will take a long time to forgive yourself.

Legal Costs

Lawyers are obliged by the Act that governs their practice to inform you
fully about the costs you might incur, what their hourly fees and charges are and how they expect them to be paid or not, and they must get your written consent before they proceed to act for you.  This is generally called a costs agreement.

Things don’t always go according to plan, so keep in mind that even if you haven’t actually got around to signing the costs agreement, it may be held to be legally binding somewhere down the track, because of the amount of discussion that went on around it and because the lawyer went on to represent you.

The best way is to ask your questions and get them sorted out upfront. Don’t leave it to others to decide, when a dispute develops, about how much you owe based on what was or wasn’t said.  Remember, it is not unusual for a lawyer to adapt the terms of the usual costs agreement to suit the particular circumstances.

The word 'Costs' is used to describe or include 'party-party' costs, 'solicitor-client' costs and disbursements (or expenses).  Party-party costs are those that are generated by the letters (etc.) that go back and forth between the lawyers for each side. The solicitor-client costs are those that are incurred every time you deal with your lawyer and/or he/she does something like arranging for an expert's report to be done. Disbursements include the costs that the lawyer incurs on your behalf, like the barrister’s fees, the expert’s costs, the photocopying and postage, etc.

Costs agreements are required to spell out the hourly fees applying, when and who is responsible for paying the party-party costs, the solicitor-client costs and the disbursements and any other conditions applying. If it isn’t clear, get the language changed so that it is clear to you.

'No-win, no-fee' agreements usually mean that you won’t be asked to pay the party-party costs, because the lawyer is expecting to get the other side to cover those costs in any settlement that might eventuate. You would still be liable for the solicitor-client costs and disbursements.

'No-win, no-fee' can mean you won’t be liable for any of the costs, including the solicitor-client costs and disbursements. Make sure you know what is intended before you agree to it. Remember, too, that lawyers who are willing to offer a  'no-win, no-fee' arrangement may ultimately resist your attempt to get them to do something or other, because they are funding the action (not you), and they don’t want it to go on forever. They want to get paid. It’s just a variation on the old theme of he who pays the piper decides the tune etc. So, get it right first up!

Note too, that 
'no-win, no-fee' agreements mostly assume that the case will be settled by agreement, as going on to trial is expensive and, mostly, not viable commercially. You might think your case is a shoe-in, but the lawyer may not and you are asking them to take the risk. Ultimately, getting some understanding of the difficulties your case might impose and what the lawyer is prepared to take on (at the outset) will make the outcome much more palatable for both.

Finally, remain reliable, consistent and diligent in what you do and provide to the project.

Settlements

The terms of settlement are usually set out in the form of a deed. It will start by setting out the parties to the deed, followed with a brief recitation of the basic circumstances; these are often called the 'recitals' and underpin the need for the deed.

The 'operative' clauses usually follow and set out what is to happen, i.e., when and who is to do it, and they include things like how and when the settlement amount is to be paid. They will usually include things like what you’re prepared to give up to get a settlement. For example, you might agree to keep the amount of settlement completely confidential, except for direct family, or you might agree never to sue the other party again in relation to what’s been going on and that they can use the deed to stop you doing that. These demands are common to most deeds, although you might want them to be mutual.

The first draft of a deed is just that - a draft - so feel free to put an alternative and work towards agreeing the final wording. Get independent legal advice.

If the one of the parties fails to do what the deed requires, then the other party can sue for performance of the deed in any court of competent jurisdiction.

'Gag' clauses can create real concern if the demand is that you will never speak publicly again about any of the things that led you to blow the whistle in the first place. Generally 'gag' clauses are not acceptable, particularly if they assume that compliance would require a person to lie. A better way is to be very public about the entire whistleblowing experience from the outset, so that it never becomes an issue.


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Copyright Whistleblowers Australia 2010. (Last update: 19 November 2010.)