EPR 12: Professional Fees: Rule 17 PCR

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Questions and Answers

In the framework of Singapore's Professional Conduct Rules (PCR), specifically Rule 17, which of the following scenarios MOST accurately exemplifies a breach of the overarching principle governing professional fees and costs?

  • A legal practitioner, operating under a fixed fee arrangement for conveyancing, encounters unforeseen complexities requiring significantly more time; they absorb the additional cost without altering the agreed fee.
  • A legal practitioner, recognizing a client's precarious financial situation midway through a complex commercial dispute, continues representation but increases hourly rates to mitigate potential non-payment risk. (correct)
  • A legal practitioner, while diligently pursuing a client's case, inadvertently performs some redundant procedural steps that marginally increase billable hours, without materially affecting the case outcome.
  • A legal practitioner, anticipating protracted litigation, requests an upfront retainer fee that is slightly higher than the estimated total cost, with a clear stipulation for refund of any unutilized portion.

Under Rule 17(2) PCR, a legal practitioner's duty to complete work for a client 'as soon as reasonably possible' is interpreted as mandating the prioritization of speed over meticulousness, even if it marginally compromises the quality of legal service.

False (B)

Critically analyze the ethical dilemma faced by a legal practitioner when Rule 17(2) PCR's injunction against 'unnecessarily or improperly increasing costs' potentially conflicts with the practitioner's professional judgment that additional, yet arguably non-essential, procedural steps could significantly bolster the client's case.

The dilemma arises from balancing cost-efficiency against potentially enhanced case strength through additional work. Ethical practice necessitates transparent client communication, explaining the cost-benefit of optional procedures, allowing informed client consent. Unilateral, non-essential cost inflation, even if case-bolstering, breaches Rule 17(2). Justification hinges on demonstrable necessity and client's informed decision, not mere practitioner discretion.

According to Rule 17(3) PCR, information on fees provided to a client must include the ________ on which fees will be charged and the ________ in which those fees are to be paid.

<p>basis, manner</p> Signup and view all the answers

Match the following aspects of fee information disclosure under Rule 17(3) PCR with their corresponding ethical rationale:

<p>Basis of Fee Calculation = Ensures client understanding of how fees are derived, promoting transparency and preventing perceived arbitrariness. Manner of Payment = Clarifies payment expectations, mitigating potential disputes arising from payment methods or schedules. Estimates of Fees and Payments = Provides clients with a financial forecast, enabling informed decisions about pursuing legal action based on anticipated costs. Requirement for Estimates Not to Vary Substantially = Guarantees financial predictability and protects clients from unexpected cost escalations, fostering trust and financial planning.</p> Signup and view all the answers

In the context of contentious matters and Rule 17(4) PCR, which of the following statements MOST accurately reflects the mandatory disclosures a legal practitioner must make to a client at the outset?

<p>The client's ultimate responsibility for their own solicitor and client costs, regardless of any costs order, and the potential liability for adversary costs if unsuccessful. (A)</p> Signup and view all the answers

Rule 17(5) PCR obligates a legal practitioner to inform a client of their right to have a bill taxed only if the client explicitly expresses dissatisfaction with the invoiced amount.

<p>False (B)</p> Signup and view all the answers

Explain the strategic rationale behind the Law Society of Singapore v Andre Ravindran Saravanapavan Arul [2011] 4 SLR 1184 judgment's assertion that a solicitor who proactively offers bill taxation is 'unlikely to have the frame of mind or intention to overcharge'.

<p>Proactive offer of taxation signals solicitor's confidence in bill's fairness and reasonableness, deterring overcharging from outset. It indicates transparency and willingness for independent scrutiny, mitigating suspicion of inflated billing. Conversely, reluctance to offer taxation could imply concealed overcharging concerns, undermining client trust and ethical standing.</p> Signup and view all the answers

According to Rule 17(6) PCR, even if a client consents to or the court orders bill taxation, the legal practitioner must inform the client that the initial bill delivery does not preclude presenting a bill for a ________ amount for taxation.

<p>larger</p> Signup and view all the answers

Rule 17(7) PCR's prohibition against 'overcharging' is absolute, irrespective of any pre-existing fee agreement. Which of the following scenarios would MOST likely be deemed a violation of this rule?

<p>A legal practitioner renders a bill based on a percentage uplift agreed in a contingency fee agreement for contentious work, despite such agreements being generally prohibited. (D)</p> Signup and view all the answers

Under Rule 17(8) PCR, 'overcharging' is solely determined by comparing the fee against prevailing market rates for similar legal services.

<p>False (B)</p> Signup and view all the answers

Elaborate on the 'reasonable legal practitioner' standard in Rule 17(8) PCR for determining overcharging. How does this subjective test ensure ethical fee billing in diverse legal practices?

<p>The 'reasonable legal practitioner' standard is a contextual benchmark, evaluating if a hypothetical, ethical practitioner, with similar profile and circumstances, would deem the fee justifiable in good faith. Subjectivity allows for nuances of practice areas, complexity, urgency, and expertise to be considered, preventing rigid, market-rate-centric assessments and promoting ethically grounded billing across varied legal services.</p> Signup and view all the answers

Rule 17(9) PCR addresses fee chargeability in conflict situations, stating that if a lawyer recommends alternative representation due to conflict, they may charge only for items that clearly need not be ________ by the alternative lawyer.

<p>duplicated</p> Signup and view all the answers

Practice Direction (PD) 5.2.2 of the Law Society of Singapore addresses 'Non-Refundable Deposit or Retainer'. Which of the following practices is MOST likely to be considered a breach under PD 5.2.2?

<p>Retaining a non-refundable deposit even when minimal or no work has been performed for the client due to early termination of engagement. (B)</p> Signup and view all the answers

PD 5.2.1 explicitly prohibits solicitor and client fee agreements for contentious matters that are dependent on the recovery of Party and Party costs under all circumstances.

<p>False (B)</p> Signup and view all the answers

Analyze the inherent risks associated with solicitor and client fee agreements for contentious matters being 'dependent on the recovery of Party and Party costs', as highlighted in PD 5.2.1. How might these agreements inadvertently contravene ethical and legal principles?

<p>Dependency on Party-Party cost recovery risks creating de facto contingency fees, prohibited in contentious matters. It incentivizes solicitors to pursue cases primarily for cost recovery, potentially compromising independent judgment and client's best interests. If Party-Party costs are minimal, solicitor's remuneration might be unfairly low, or conversely, excessively high if costs are substantial, regardless of actual work.</p> Signup and view all the answers

PD 5.2.3 clarifies that the 'Two-Thirds Rule', an English practice regarding junior counsel fees, ________ been enforced in Singapore.

<p>has never</p> Signup and view all the answers

PD 5.1.1 addresses 'Equity in Lieu of Fees'. While not inherently objectionable, accepting equity raises several concerns. Which of the following is NOT a primary concern explicitly listed under PD 5.1.1?

<p>Breach of client confidentiality due to increased financial entanglement with the client's affairs. (C)</p> Signup and view all the answers

Contingency fees are explicitly permitted in Singapore for all types of legal work, provided they are clearly documented in a written agreement.

<p>False (B)</p> Signup and view all the answers

Explain the rationale behind the prohibition of contingency fees in Singapore, referencing both Section 107 LPA and Rule 18 PCR. How does this prohibition safeguard the integrity of the legal profession and the administration of justice?

<p>Prohibition stems from concerns that contingency fees incentivize lawyers to prioritize personal financial gain over impartial legal advice and duty to court, potentially subverting justice. Section 107 LPA and Rule 18 PCR aim to prevent champerty and maintenance, ensuring lawyers maintain objectivity and act in client's best interests, not driven by a stake in litigation outcome.</p> Signup and view all the answers

The case of Law Society of Singapore v Kurubalan s/o Manickam Rengaraju [2013] 4 SLR 91 centered on a solicitor entering into a ________ agreement, which is a type of contingency fee arrangement.

<p>champertous</p> Signup and view all the answers

In Law Society of Singapore v Kurubalan s/o Manickam Rengaraju [2013] 4 SLR 91], the solicitor's fee arrangement was deemed champertous primarily because it was:

<p>Dependent on a percentage (30% or 40%) of the amount recovered from the client's personal injury claim. (A)</p> Signup and view all the answers

Section 107(1)(b) LPA permits agreements where solicitor payment is contingent on the successful outcome of a contentious proceeding, provided such agreements are approved by the Law Society.

<p>False (B)</p> Signup and view all the answers

Explain the interplay between Section 107(3) LPA and the common law doctrines of 'maintenance' and 'champerty'. How does this relationship reinforce the prohibition of contingency fees for solicitors in Singapore?

<p>Section 107(3) LPA subjects solicitors to maintenance and champerty laws like any citizen. These doctrines, historically aimed at preventing frivolous litigation and unethical financial interests in lawsuits, directly underpin the contingency fee prohibition. By being subject to these laws, solicitors are legally barred from champertous arrangements, reinforcing ethical and legal boundaries.</p> Signup and view all the answers

Rule 37 PCR (r 18 of PCR 2015) states that a solicitor shall not enter into negotiations with a client for an interest in the ________ of litigation, or for remuneration proportionate to the amount which may be recovered by the client in proceedings, except to the extent permitted by any scale of costs.

<p>subject matter</p> Signup and view all the answers

The Court of Three Judges in Law Society of Singapore v Kurubalan s/o Manickam Rengaraju [2013] 4 SLR 91] observed that Rule 37 PCR (r 18 of PCR 2015) had been breached because the agreement was deemed champertous. What was the core characteristic that rendered the agreement 'champertous' in this context?

<p>The agreement stipulated that the solicitor would receive a share of what might be recovered in the client's action. (C)</p> Signup and view all the answers

The rationale behind Section 107 and Rule 37 is primarily to prevent clients from entering into potentially exploitative fee arrangements with their solicitors.

<p>False (B)</p> Signup and view all the answers

Explain how contingency fee arrangements could 'tempt the champertous maintainer to subvert the course of justice', as articulated in the rationale behind Section 107 and Rule 37. Provide a hypothetical scenario illustrating this risk.

<p>Contingency fees create a direct financial incentive for lawyers to win at all costs, potentially leading to unethical tactics, misrepresentation of facts, or pressuring clients to settle disadvantageously to secure fees. Scenario: Lawyer with contingency fee agreement, facing weak case, fabricates evidence or withholds crucial information to court to improve success chances and fee realization, subverting justice.</p> Signup and view all the answers

An exception to the rule against champerty exists for ________ clients, where it may be permissible and even honourable for a solicitor to act knowing fees might only be recovered upon successful claim outcome.

<p>impecunious</p> Signup and view all the answers

The 'impecunious client exception' to the rule against champerty is conditional upon several factors. Which of the following is NOT a stipulated condition for this exception to apply?

<p>The solicitor's fees must be capped at a pre-determined percentage of the potential recovery amount, ensuring proportionality. (A)</p> Signup and view all the answers

The 'impecunious client exception' is primarily justified by English and Australian legal authorities but lacks explicit support within Singaporean jurisprudence.

<p>False (B)</p> Signup and view all the answers

Critically evaluate the ethical tightrope walked by solicitors invoking the 'impecunious client exception'. What inherent risks and potential abuses must be rigorously guarded against to maintain the integrity of this exception?

<p>Risk of disguised champerty if 'impecuniosity' is loosely defined or exploited for profit. Potential for reduced solicitor objectivity if fees still contingent on success, even for impecunious clients. Abuse risk if exception becomes a loophole for circumventing contingency fee prohibition. Safeguards: Stringent impecuniosity verification, robust 'good cause' assessment, transparency, and Law Society oversight are crucial.</p> Signup and view all the answers

In Law Society of Singapore v Lau See Jin Jeffrey [2017] SGHC 30, the complainant alleged a contingency fee agreement where the respondent would be paid ________ of damages awarded, potentially increasing to 25%.

<p>20%</p> Signup and view all the answers

In Law Society of Singapore v Lau See Jin Jeffrey [2017] SGHC 30], the respondent solicitor argued that the percentage-based figures were merely used to 'estimate his fees' and not a contingency arrangement. Why did the Court of Three Judges reject this argument?

<p>Because the percentage figures were explicitly linked to the damages awarded, inherently making it a contingency-based fee structure. (C)</p> Signup and view all the answers

The Court in Law Society of Singapore v Lau See Jin Jeffrey [2017] SGHC 30] explicitly stated that small law firms are held to a lower standard of acceptable conduct in relation to fee charging practices compared to larger firms.

<p>False (B)</p> Signup and view all the answers

Analyze the significance of the Court's rejection of the 'small law firm lower standard' argument in Law Society of Singapore v Lau See Jin Jeffrey [2017] SGHC 30]. What message does this send to the legal profession regarding ethical fee practices?

<p>Rejection underscores uniform ethical standards across legal practices, irrespective of size. It emphasizes that fee charging ethics are not scalable or negotiable based on firm structure. Message: Ethical conduct is paramount and consistently expected from all practitioners, reinforcing public trust and professional integrity across the board.</p> Signup and view all the answers

In C.f. Legis Point LLC v Tay Choon Ai [2017] SGHC 325, the firm agreed to 'cap any charges... at the level of ________ costs'.

<p>party and party</p> Signup and view all the answers

In C.f. Legis Point LLC v Tay Choon Ai [2017] SGHC 325], the client interpreted the 'cap at party and party costs' to mean that her total legal fees would be limited to the fixed party-and-party costs. Why did the Court ultimately disagree with this interpretation?

<p>Because the firm clarified that the 'cap' meant billing on a standard basis (party-and-party), not an indemnity basis, not a total fee limit. (C)</p> Signup and view all the answers

The Court in C.f. Legis Point LLC v Tay Choon Ai [2017] SGHC 325] held that a fee agreement capped at 'party and party costs' is inherently illegal and unenforceable in Singapore.

<p>False (B)</p> Signup and view all the answers

Explain the critical distinction drawn by the Court in C.f. Legis Point LLC v Tay Choon Ai [2017] SGHC 325] between a permissible 'billing standard capped at party and party costs' and an impermissible 'contingent fee arrangement'. How does this distinction impact fee agreement drafting?

<p>Permissible 'cap' is about billing <em>basis</em>, not total fee limit. Fees are still payable regardless of success but billed at party-party cost scale. Impermissible contingency is fee payment <em>conditional</em> on success. Drafting must clearly articulate billing basis, payment obligations regardless of outcome, and avoid any language suggesting fee contingency on litigation success to remain compliant.</p> Signup and view all the answers

Sharing fees with ________ persons is not allowed under Rule 19 PCR and Section 32(2) LPA.

<p>unauthorised</p> Signup and view all the answers

In Law Society of Singapore v Tan See Leh Jonathan [2020] SGHC 102], the respondent solicitor was disciplined for sharing fees with a paralegal. What was the primary reason the paralegal was considered an 'unauthorised person' in this context?

<p>The paralegal's practising certificate had lapsed, rendering him unable to practice as an advocate and solicitor. (B)</p> Signup and view all the answers

Sharing fees with an 'unauthorised person' is permissible if the unauthorised person is a lawyer qualified in another jurisdiction but not admitted in Singapore.

<p>False (B)</p> Signup and view all the answers

Explain why the Court in Law Society of Singapore v Tan See Leh Jonathan [2020] SGHC 102] deemed the respondent's fee sharing arrangement with the paralegal as 'serious misconduct', even though the paralegal was a qualified lawyer whose practicing certificate had merely lapsed.

<p>Serious misconduct because fee sharing facilitated paralegal's unauthorized practice (holding out as advocate). It's offense for unauthorized person to practice; fee agreement enabled this. Law makes no distinction between 'types' of unauthorized persons; lapsed certificate = unauthorized. Respondent's failure to supervise and sharing fees both contributed to misconduct.</p> Signup and view all the answers

PD 5.4.1 prohibits the use of ________ for the recovery of legal fees and expenses.

<p>debt collectors</p> Signup and view all the answers

PD 5.4.1 lists several concerns regarding the use of debt collectors for legal fee recovery. Which of the following is NOT a primary concern explicitly mentioned in PD 5.4.1?

<p>Risk of incurring additional legal costs associated with engaging debt collectors. (C)</p> Signup and view all the answers

PD 5.4.1 absolutely prohibits any form of external assistance in recovering outstanding legal fees under all circumstances.

<p>False (B)</p> Signup and view all the answers

Explain the rationale behind PD 5.4.1's discouragement of using debt collectors for legal fee recovery. How does this direction uphold the ethical standards and public perception of the legal profession?

<p>Rationale: Debt collector tactics (often aggressive, undignified) clash with profession's dignity, potentially breaching confidentiality and eroding public trust. PD 5.4.1 reinforces that legal fee disputes are ultimately for Courts to arbitrate, not debt collectors. Upholds ethical standards by promoting dignified, legally-sound recovery methods, preserving profession's image.</p> Signup and view all the answers

Flashcards

Principle of Professional Fees

A legal practitioner must act in the best interests of his or her client and must charge the client fairly for work done.

Duty to client: Cost increases

A legal practitioner must not undertake work in a manner that unnecessarily or improperly increases the costs payable to the legal practitioner.

Duty to client: Completion of Work

A legal practitioner must use best endeavors to complete any work for the client as soon as reasonably possible.

Duty to client: Proposals

A legal practitioner must explain to client a proposal of settlement, or any other offer or position taken by any other party.

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Duty to client: Language

A legal practitioner must ensure offer or proposal of settlement is explained in a language or dialect that the client understands.

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Duty to client: Justified expense

A legal practitioner must evaluate with client whether any consequence justifies the expense of, or the risk involved, in pursuing the matter.

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Duty to client: Dispute Resolution

A legal practitioner must evaluate with the client, the use of alternative dispute resolution processes

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Duty to client: Legal Advice

A legal practitioner must advise client on the relevant legal issues to enable the client to make an informed decision about how to act in the matter.

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Ensuring Risk-Benefit Evaluation

Professional obligation to ensure that a proper risk-benefit evaluation is undertaken at each stage of legal proceedings.

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Information on Fees: Basis

Basis on which fees will be charged, and the manner in which those fees are to be paid.

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Information on Fees: Payments

Other reasonably foreseeable payments either to the legal practitioner or to any other party, and of the stages of which those payments are likely to be required.

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Information on Fees: Estimates

Estimates of the fees and other payments.

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Information on Fees: Estimates vs Actual

The legal practitioner must ensure that the actual amounts of the fees and other payments do not vary substantially from the estimates.

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Fees: Client Responsibility

Personal responsibility for paying the client's own solicitor and client costs in full, regardless of any order for costs made against any other party.

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Client right to have bill taxed

If a client disputes or raises a query about a bill, the legal practitioner must inform the client in writing of the client's right to apply to the court to have the bill taxed or to review any fee arrangement

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Client Consent to Bill Taxation

If the client consents to taxation of a bill issued to the client, or the court orders the taxation of a bill issued to the client, the legal practitioner must inform the client that the delivery of a bill by the legal practitioner to the client doesn't preclude the legal practitioner from presenting a bill for a larger amount for taxation; and Upon such a taxation, the legal practitioner is entitled to any amount allowed by the Registrar even if that amount is more than the amount claimed in any bill.

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No Overcharging

A legal practitioner must not render a bill which constitutes overcharging, even if there is a fee agreement that permits the charging of that amount

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Constitutes overcharging

There is overcharging if a reasonable legal practitioner cannot in good faith charge the fee, disbursement or amount, taking into account: The legal practitioner's standing and experience, The nature of the legal work concerned, The time necessary to undertake the legal work, The instructions and requirements of the client, and Any other relevant circumstances

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Fees in conflict situation

Where, through a conflict of interest, a lawyer has recommended to a client that the client seek alternative legal representation, the lawyer may charge only for those items which clearly need not be duplicated by the alternative lawyer.

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Non-Refundable Deposit

The collection of an unreasonable non-refundable deposit or retainer for contentious work; or the retention of a non-refundable deposit irrespective of work done, may constitute overcharging and professional misconduct.

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Dependent on Recovery of Costs

Solicitor and Client fee agreements for contentious matters that are dependent on the recovery of Party and Party costs can amount to a breach of Section 107 of the LPA and r 18 PCR.

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Contingency fees allowed?

Contingency fees not allowed: See section 107 LPA and rule 18 PCR

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Sole charge

An agreement by which he is retained or employed to prosecute any suit or action or other contentious proceeding which stipulates for or contemplates payment only in the event of success in that suit, action or proceeding.

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Rationale against

The traditional rationale was that such arrangements would tempt the champertous maintainer to subvert the course of justice

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Unauthorised legal work

It is an offence for an unauthorised person to hold himself out as an advocate and solicitor; he cannot recover any fees for any legal work he performed.

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Engaging Debt Collectors

Not to engage, directly or indirectly, the services of debt collectors to recover outstanding legal fees and expenses.

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Study Notes

Professional Fees and Costs

  • Rule 17 PCR dictates that a legal practitioner must act in the best interests of their client.
  • A legal practitioner must charge the client fairly for work done.
  • Imagine a scenario where a lawyer inflates the hours spent on a case to increase the bill. This could be considered a breach of Rule 17 PCR.

Duties to Client - Rule 17(2) PCR

  • It is critical that legal practitioners avoid unnecessary costs for the client.
  • Work should be completed in a timely manner.
  • An example would be if a lawyer delays filing court documents to prolong billing hours.
  • The client must be clearly informed about positions taken by other parties.
  • Offers and proposals of settlement must be explained to the client.
  • If the client is not proficient in English, ensure explanations are provided in a language or dialect they understand.
  • It is vital to evaluate with the client whether the potential outcome justifies the expense and risks involved in pursuing the matter.
  • Alternative dispute resolution processes should be considered and discussed with the client.
  • A lawyer is obligated to advise clients on relevant legal issues.
  • The purpose is to enable the client to make informed decisions about their case.

Risk-Benefit Evaluation

  • A professional obligation exists to ensure the proper risk-benefit evaluation at each legal proceeding stage, per Singapore Shooting Association and others v Singapore Rifle Association [2019] SGCA 83.
  • Factors include the merits of the claim, potential expenses, risks involved, possible outcomes, and the quantum of the claim. Example: Legal counsel should not encourage a client to pursue a case with minimal chances of success and high costs.

Informing Clients About Fees - Rule 17(3)

  • Clients must be informed about the basis on which fees are charged and the manner in which these fees are to be paid.
  • The client should be made aware of other reasonably foreseeable payment to other parties.
  • Clients should know the stages at which payments are likely to be required.
  • Estimates of the fees and other payments should be provided.
  • Actual amounts shouldn't substantially differ from estimates.
  • For example, providing a range (e.g., $5,000-$7,000) and explaining factors that could influence the final cost.

Fees in Contentious Matters - Rule 17(4) PCR

  • At the beginning of a contentious matter, the client must understand they're personally responsible for solicitor and client costs, regardless of any cost order.
  • The client may have to pay their costs if they lose
  • The court may order them to pay costs of other parties.
  • Fictitious scenario: A client should understand they may be responsible for the other's legal fees, even if they lose, to make an informed decision.

Right to Have Bill Taxed - Rule 17(5)

  • Legal professionals must inform clients in writing of their right to have the bill taxed or to review any fee arrangement if a dispute arises over a bill,
  • Taxing a bill means having an independent third party, like a court officer, assess its reasonableness.

Duty to Advise on Taxation

  • A solicitor who fails to advise a client of right to have bill taxed does so at his peril.
  • Law Society of Singapore v Andre Ravindran Saravanapavan Arul [2011] 4 SLR 1184 supports this contention.
  • The case suggests that offering to have a bill taxed indicates a lack of intent to overcharge.

Consequences of Taxation - Rule 17(6)

  • If a client agrees to taxation or the court orders it, lawyers must inform client that delivering a bill doesn't preclude presenting a larger bill for taxation.
  • Upon taxation, a legal practitioner can be entitled to any amount the Registrar allows, even if it exceeds what was initially claimed. A fictitious example is a lawyer initially billing $10,000, but the Registrar allows $12,000 post-taxation.

No Overcharging - Rule 17(7) PCR

  • Even if there's a fee agreement, a legal practitioner must not render a bill that constitutes overcharging.
  • A fee schedule must be fair.

Acts Constituting Overcharging - Rule 17(8) PCR

  • Overcharging occurs if a reasonable legal practitioner cannot, in good faith, charge the fee, taking into account the lawyer's experience, nature of work, amount of work, client's instructions, and relevant circumstances, per Rule 17(8) PCR.
  • A new lawyer billing at the same rate as a senior partner for routine work

Fees In Conflict Situations - Rule 17(9) PCR

  • Lawyers recommending alternative legal representation because of conflict of interest may only charge those items that new lawyers would not duplicate.
  • It would be unethical if a lawyer charged for a full suite of advice and charges, when parts of it would be used as is by the other lawyer.

Law Society Practice Directions

  • PD 5.2.2 states that collecting unreasonable non-refundable deposits for contentious work may constitute overcharging/ professional misconduct.
  • PD 5.2.1 on Fee Arrangements: Solicitor and Client fee agreements dependent on recovery of Party and Party costs can breach Section 107 LPA and r 18 PCR.
  • In any contentious matter, it is improper for solicitors to purchase an interest of a client.
  • PD 5.1.1: Accepting equity in lieu of fees is permissible.
  • Very careful consideration must be given to; prohibition against contingency fee arrangements for noncontention work; overcharging; conflict of interest; secrect profits; sharing of profits with unauthorised persons; and tax matters.

Contingency Fees

  • Not allowed, as per section 107 LPA and rule 18 PCR.
  • The Law Society of Singapore v Kurubalan ruled against payment of lawyers dependent on claim outcomes.
  • A lawyer cannot be paid based on proceeds gained.

Provisions Relating to Sole Charge

  • The sole charge is not permitted
  • Section 107(1)(b) LPA disallows agreements for payment contingent on the success of a suit.
  • Section 107(3) LPA states that a solicitor is subject to law of maintenance/champerty (financing litigation in return for share of proceeds)

Rule 37 Breaches

  • Rule 37 breaches were observed in an agreement where one party agreed to help another bring a claim, in return for a share of recoveries.

Rationale Behind Section 107 and Rule 37

  • Contingency fees may subvert the course of justice, to be avoided in relation to litigation.
  • Lawyers must maintain detachment to discharge duty to the court.
  • Implication: Lawyers agreeing to contingency fee run the risk of conflict between their interests in claim and duty to the court

Exception to Rule Against Champerty

  • An exception exists for impecunious clients.
  • It's permissible for an Advocate and Solicitor to act for an impecunious client, knowing the lawyer can only recover fees if client wins the claim and receives costs order.

Exceptions to Champerty Explained

  • The solicitor is not acquiring an interest in the fruits of the litigation, because they will not be a beneficiary of the legal claim, other than what is owed to them.
  • Supported by English/Australian authorities.
  • Conditionally permissible for client's impecuniosity, because the claim would likely be abandoned otherwise.

Law Society of Singapore v Lau See Jin Jeffrey [2017] SGHC 30

  • Illustrates issues with contingency fees.
  • Lau allegedly had an oral agreement for 20% or 25% in a claim for medical negligence.
  • Law was found to have charged excessive fees.

Law Society of Singapore Case

  • The Court of Three Judges states that complainant would be unlikely to agree, without assurance, given that claim amounted to $5 million,
  • The issue of attendance notes and information should be given in relation to client financial commitment
  • The court rejected suggestion that law firms were practicing with double standards.

C.f. Legis Point LLC v Tay Choon Ai [2017] SGHC 325

  • The client engaged the plaintiff law firm to represent her in a dispute.
  • The firm agreed to cap charges at the level of party + party costs.
  • The client argued that the party fee should be capped at $28,000.
  • The firm argued it would be billed based on stand basis.
  • Court held the client's interpretation meant that she would need to pay costs regardless of success or failure, which did not amount to a fee arrangement.

Sharing Fees with Unauthorised Persons:

  • Sharing fees with unauthorised persons is not allowed.
  • Rule 19 PCR of Legal Profession Act.
  • Section 32(2), LPA stipulates what is an unauthorised person.

LS of Singapore Case Sharing Fees

  • Law Society of Singapore v Tan See Leh Jonathan [2020] SGHC 102 concerned respondents paralegal and his working conditions
  • Key facts: Paralegal's certificate was not valid. The paralegal sent 5 emails, representing that he was the respondent
  • Agreement existed to share 50% fees.

Contravention of Rules

  • The respondent was charged for failure to exercise adequate supervision + sharing fees.
  • The Court of Tree held that serious misconduct occurred.
  • Offence to hold oneself out as advocate/solicitor without qualifications.
  • The court stated facts did not make respondents conduct any less serious. The law did not make any distinction.
  • Per PD 5.4.1, use of debt collectors is not allowed.
  • This encompasses issues relating to abusive practice, breach of client confidentiality/ dignity, sharing fees, commissions, or court rulings.
  • Courts are the ultimate arbiter of legal fees.

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