The 50/50 rule is a safety net for a claimant. It is a rule that must be followed by a lawyer who handles a personal injury claim on a “No Win No Fee” basis.
In simple terms, the rule requires the lawyer to reduce professional fees in circumstances where his fees would otherwise exceed what the injured claimant would receive after payment of legal fees and refunds.
By way of simple example, assume a claim settled for $30,000 and if after payment of out of pocket expenses and refunds, there was $26,000 left. If the total amount of professional work done by the lawyer was $20,000, he or she will have to reduce the fees to $13,000. That is, $4,000 is paid to the third parties for out of pocket expenses, $13,000 is received by the injured claimant and $13,000 is received by the law firm, even though the law firm has done $20,000 worth of work