Written by Condon Associates on 15 June 2009

No doubt you’ve heard about the legal predicament that Greens leader Bob Brown found himself in. Brown lost an important court case, and was faced with a legal bill of $240,000, that threatened his political career.

Presumably when Brown launched his legal action, he took some time to estimate the risks, however like many clients I see on a daily basis, probably never thought that his legal costs could ultimately lead to a massive financial hit — for some people, it even results in bankruptcy.

Launching legal action when one is wronged is something that many Australians do. However, this can be a VERY costly exercise which results in the aggrieved party looking for ways to cover their legal costs.

One common method of payment that people consider is the ‘no win / no fee’ option that some legal firms offer. This is where you take your case to court, and if it isn’t successful, you are not liable for payment.

As the average person does not have the funds to fight a legal battle, this may seem like a great way to ensure a preservation of one’s savings. Alas, while this may appear like a good idea, all of the ramifications must be considered.

If you win — fantastic!

If you lose — then what? Over the years I have had many clients who, while they don’t owe their solicitor any money, receive an adverse costs order against them that is so big that it has decimated all of their savings, resulting in bankruptcy.

So my advice is quite simple — always analyse the situation first, and seek out appropriate advice from someone such as your accountant.

Finally, ask yourself one question — is it really worth risking everything for legal action that may cost more than its worth in the long run? If it is, good luck!