Written by: David Cossalter Opening a cost agreement is often the moment when clarity starts to come into focus. At first glance, the figures at the bottom can feel significant, but they serve an important purpose: to set out a clear and transparent framework for how your matter will be handled from the very beginning. It’s about creating certainty early, so you can move forward with confidence and a clear understanding of what to expect.
You’re not alone. At GMP Law, this is one of the most common concerns we hear from clients in the first few weeks after signing. That’s why we’ve created this guide: to walk you through the three stages, explain when each one applies, and show why the “worst case” number rarely reflects what happens. We’ll also cover how our No Win No Fee (NWNF) service protects you, the difference between legal fees and disbursements, and the answer to the questions you’re probably asking right now.
What is a cost agreement?
A cost agreement is a clear, written outline of the legal costs that may apply if you choose to move forward with the matter. It’s provided early in the process, once we’ve had the opportunity to understand and assess your situation and the likely steps involved.
Rather than being a final or fixed bill, it sets out an expected framework of costs so you can make informed decisions from the outset. It gives you visibility over how your matter will be managed financially, so there are no surprises later on.
Our goal is simple: give you clarity, reassurance, and confidence that we’re fighting for the best possible outcome, while you focus on your recovery.
Why cost agreements exist and why they matter
Before your lawyer can start working on your claim, you’ll need to sign a cost agreement. This is a legal requirement and makes sure you understand what’s involved before your claim gets underway.
Your agreement explains:
- The work required to run your claim
- How your legal fees are calculated
- Any expenses that may be needed to build your claim
- When payments are due.
It gives you a clear picture of what to expect, including how your claim will be managed and what it may cost. It also makes sure both you and your lawyer are clear about what has been agreed.
GMP Law cannot start work on your claim until the agreement has been signed. However, you’re not locked in once you sign. GMP Law gives you a five-day cooling-off period, so you have time to reconsider and withdraw if you decide you no longer want to proceed.
Key takeaway
You’re always in control. The cost agreement gives you clarity from the start, and GMP Law’s five-day cooling-off period gives you extra time to make sure you’re comfortable with your decision.
The three stages
Your cost agreement doesn’t quote one single fee. Instead, it breaks the work into three clear stages with estimated costs for each.
These estimates are based on our hourly rate (not a percentage of your settlement) and reflect the time our team expects to spend. Here’s what each stage means.
Stage one: Preparation and negotiation
At this stage, your legal team will:
- Review your claim and documentation
- Obtain medical records and evidence
- Engage experts for initial opinions
- Assess liability and the strength of your claim
- Begin building your case strategy.
The strength of your case depends on the quality of the evidence. Thorough medical assessments and supporting documents help prove both liability and the full extent of your losses (past and future medical costs, lost earnings, pain and suffering).
Stage two: Litigation
Once your case is prepared, the focus moves to resolving your claim without going to court.
This involves:
- Filing documents
- Exchanging more detailed evidence
- Attending a compulsory conference or mediation
- Continuing negotiations under court supervision.
Additional costs may come from more formal steps, further reports, barrister involvement in conferences, and increased correspondence.
Stage three: Trial or hearing
Stage three is the final step if your matter cannot be resolved through negotiation or mediation. While it is included in your cost agreement, reaching a full hearing or trial is uncommon.
If a hearing is required, witnesses may give evidence, barristers may present arguments, and a judge will determine the outcome. The additional work involved at this stage is why the potential costs can appear significantly higher in your cost agreement.
At GMP Law, approximately 98% of cases are resolved without going to court, often during stages one and two. This means that, for most clients, the higher stage three costs are not incurred.
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How our No Win No Fee service protects you
Our No Win No Fee structure is designed to reduce financial risk and make legal representation accessible.
Scenario | What you pay |
If your claim is successful | Legal fees + uplift fee + disbursements will be payable in line with your agreement. |
If your claim is unsuccessful | You do not pay professional legal fees or disbursements. |
If the firm discontinues your case | You will not be charged professional legal fees for work carried out up to that point, in accordance with the conditions of the agreement. |
If you choose to withdraw | You may be responsible for costs already incurred up to the date of the withdrawal. The exact position will depend on the stage reached and the terms of your agreement. |
If a decision is required on whether to proceed to court | You will be advised if your matter has reached that stage. The decision to continue is discussed with you, and your instructions are taken into account before any next steps are confirmed. If it does proceed, costs will be explained in advance so you can make an informed decision. |
Key takeaway
Clear communication is maintained through each stage so that there is no uncertainty about progress or next steps. You receive written updates at key stages of the matter, prompt notification when stages are reached, and direct contact details for your lawyer and Client Liaison Officer handling your file, so questions can be addressed without delay. Where decisions are required, you are informed in advance with a clear explanation of options and likely outcomes.
Understanding the numbers: What you’re paying for
Your legal costs generally fall into three categories: professional costs (your lawyer’s fees), an uplift fee (a success fee), and disbursements (the external costs of running your claim). We explain each below so you can see what the numbers in your cost agreement mean.
Cost | What it covers |
Professional costs | Your lawyer’s time and work on your claim, including preparing your case, reviewing evidence, negotiating and communicating with you and the other side. |
25% uplift fee | An additional fee that applies if your claim is successful. It reflects the risk we take in running your claim on a No Win No Fee basis. |
Disbursements | Also known as out-of-pocket expenses. These are external costs required to run your case, such as medical reports, expert opinions, court fees and barrister fees. Unlike many personal injury firms, GMP Law covers these costs upfront, so you don’t need to pay them yourself while your claim is progressing. You only repay them if your claim is successful. |
Why is the Stage Three figure so large?
The Stage Three figure is there to give you complete transparency from the beginning. It reflects the potential costs of taking your matter through all the steps that may be required if it progresses to a hearing or trial.
This does not mean we expect your matter to reach this stage or that you will necessarily incur the full amount. The figure is included so you can understand the potential cost of your matter upfront, rather than being faced with unexpected costs later.
In many matters, a claim resolves before reaching a full hearing or trial. Depending on your circumstances, some legal costs may also be recoverable from the other party, which may reduce your overall out-of-pocket costs.
The important thing is that you will know where your matter stands and what costs may apply as it progresses. We will keep you informed and explain any significant changes before additional work is undertaken.
The GMP Law difference
Satisfaction first, fees second. If our service does not meet the high standards we set, we’ll reduce our fees. We’re the only Australian firm to back our service with a written cost reduction promise, giving you added confidence that you’re in safe hands throughout your claim.
Keeping you informed about costs
The figures in your cost agreement are estimates based on what we know about your claim at the time. They are not fixed amounts, because every claim is different and circumstances can change as your matter progresses.
For example, costs may change if new evidence comes to light, additional experts are needed, the other party disputes liability, or your matter becomes more complex than expected.
You won’t be left guessing about your costs or where your case stands. Your dedicated solicitor and our Client Liaison Officers will keep you informed throughout your claim:
- At the beginning: Within five days of signing, your lawyer will call you to explain what to expect and answer your questions.
- As your case progresses: We’ll keep you updated by phone and email as evidence is received and reviewed.
- Before moving stages: You’ll receive clear written advice before your matter moves from one stage to the next.
- When an offer is made: We’ll explain the proposed outcome and associated costs before you’re asked to make a decision.
If we expect a significant change to your estimated costs, we’ll explain what has changed, why it is needed and what it is likely to mean for you before proceeding with the additional work.
Our aim is to make your costs and your case as clear and predictable as possible, so you can focus on your recovery while we focus on your claim.
