Legal Costs

 

Q.

What are lawyers entitled to charge?

Lawyers are entitled to receive reasonable fees for work properly done on behalf of their clients. There are 2 types of legal costs:

  • Professional Fees; and
  • Disbursements

Professional fees refer to the fees charged by your lawyer for his professional services rendered to you. Disbursements refer to out of pocket expenditures your lawyer incurred in the course of representing you such as photocopying charges and filing fee with the Courts, etc.

There are non-binding Costs Guidelines issued by the Supreme Court that provide a general indication on the quantum and methodology of Supreme Court litigation costs.

Non-contentious matters – such as Will, Conveyancing and Contract drafting

Under the Legal Profession Act (the 'LPA') and the Legal Profession (Solicitors’ Remuneration) Order ('SRO'), the remuneration of a solicitor for non-contentious matters shall be fair and reasonable having regard to all the circumstances of the case, and in particular the following circumstances:

  • the importance of the matter to the client;
  • the skill, labour, specialised knowledge and responsibility involved on the part of the solicitor;
  • the complexity of the matter and the difficulty or novelty of the question raised;
  • where money or property is involved, the amount or value thereof;
  • the time expended by the solicitor;
  • the number and importance of the documents prepared or perused, without regard to length; and
  • the place where, and the circumstances under which, the services or business or any part thereof are rendered or transacted.

In addition, a solicitor may charge more if he or she is required to perform the work by special exertion on an urgent basis. Alternatively, a solicitor and his client may enter into an agreement for the solicitor's charges for non-contentious work. The agreement may be for:

  • payment of an agreed amount irrespective of the volume of work done (a fixed fee); or
  • a non-refundable retainer (deposit) for work to be undertaken. This deposit should be refunded if the instruction to act is terminated prematurely or if the matter is not proceeded with subsequently; or
  • payment on a time-related basis.

Notwithstanding that the client agreed to the fee charged, such agreements could still be challenged in Court on the ground that they are not fair and reasonable.

Contentious matters - Matters involving litigation

For contentious matters, lawyers are under a fundamental ethical obligation to act in the best interests of his or her client, charge fairly for work done pursuant to the Legal Profession (Professional Conduct) Rules ('Conduct Rules'). A lawyer must give his client an estimate of fees and disbursements. He must also advise if the estimate given had substantially changed and why this had occurred. Legal fees are typically charged based on the actual work done for the client. In determining a fair and reasonable fee, relevant considerations include: 

  • the complexity of the matter;
  • the time spent on the matter including;
  • the amount or value of any money or property involved;
  • the number of documents or correspondence prepared or perused; and
  • the skill and specialised knowledge of the lawyer(s).

These factors are unique to the facts of the matter and vary from case to case. It is prohibited by law for a lawyer to enter into an agreement with you with respect to the legal costs in a contentious matter which provides for payment only in the event of success in the contentious matter or what is known as 'contingency fee'.

If you are successful in a contentious matter, the other party will usually be ordered to pay you a sum as partial reimbursement of your lawyer's charges. Such costs are called 'party and party costs'. This sum will either be fixed by the Court or will be the subject of taxation proceedings. Similarly, if the other party is successful, you may be ordered to pay a portion of their legal costs.

Q.

Is there any recommended guideline for legal fees in Singapore?

There are currently no guidelines or recommended fee structure for lawyers’ fees. This is in line with anti-competition law in Singapore. There are however non-binding Costs Guidelines issued by the Supreme Court that provide a general indication on the quantum and methodology of Supreme Court litigation costs.

Q.

Can my lawyer ask for a deposit even before the work is performed?

Your lawyer may receive a deposit from the client as security for fees to be charged. The money received will be deposited into the law firm's client account. When the lawyer rendered an invoice after performance of work, the lawyer may transfer the amount due under the invoice to the law firm's account if there is no objection from the client on the amount billed.

Q.

Can my lawyer charge interest on his invoice?

A lawyer may charge interest on his disbursements and Bill of Costs from the end of one month of the date of his demand for payment.

Q.

What are 'solicitor and client costs' and 'party and party costs'?

'Solicitor and client costs' refers to the legal costs you are liable to pay to your own lawyer.

'Party and party' costs refers to legal costs that a losing party in a court matter has to pay to the winning party:

  • If you succeed in your contentious matter, you can expect to recover your 'party and party costs' which will cover part of your 'solicitor and client costs'.
  • If you are unhappy with the legal costs you have to pay the other party's lawyers (in the situation that you have lost your case and have been asked to pay for the other party's costs), you should consult your lawyer as to the taxation procedure of the 'party and party costs’. The 'party and party costs' is in addition to the 'solicitor and client costs' you have to pay your own lawyer.

Q.

What can I do if I am dissatisfied with my lawyer's Bill of Costs?

1. Contact your lawyer

You should first try to contact your lawyer if you have any grievance concerning your legal fees. Your concerns may be due to a misunderstanding which your lawyer can quickly and easily clarify for you. Sometimes your concerns may be justified and you should give your lawyer an opportunity to explain.

2. Request an itemized bill

You may also request that your lawyer provide you with a detailed bill of costs if you do not already have one. A detailed bill of costs is an itemized bill describing the nature of work done by the lawyer since he began to act for you. The itemized bill should describe such items as time spent on research, drafting correspondence, attending court, attendance with you and other persons including telephone attendance and perusing documents. You may not be aware of all the steps taken by your lawyer on your behalf. One of the purposes of a detailed bill of costs is to tell you exactly what work has been done on your matter.

3. Resolve the dispute by either taxation or mediation.

Q.

What is taxation?

Taxation is a judicial process to determine the reasonableness of the legal fee. The Legal Profession Act gives you and the lawyer the option to apply to the Court for a formal assessment or 'taxation' of the bill of costs. However, either you or your lawyer must file an application within one year from the delivery of the bill. However, in a case where you and your lawyer consent to taxation of the bill, the Registrar may proceed to tax the bill notwithstanding that there is no order.

Your lawyer can proceed to tax his own bill of costs if you dispute the quantum of the bill. Your lawyer can only present the bill for taxation one month from the delivery of the bill. Consequently, your lawyer can proceed to sue you on the taxed costs, if you still refuse to pay. After one year from the delivery of the bill, no order shall be made for taxation, except under special circumstances.

Taxation Procedure
There are two types of basis for taxation of legal costs, namely taxation on a standard basis and taxation on an indemnity basis.

  • 'Standard basis' means that the party claiming costs has to show that any particular item was reasonably incurred and therefore allowed. 'Party and party costs' are usually taxed on a standard basis.
  • 'Indemnity basis' means that the party paying costs has to show that any particular item was unreasonably incurred and therefore disallowed. For contentious matters, 'solicitor and client costs' are taxed on an indemnity basis.

In the event that the amount of costs payable under the bill of costs is reduced on taxation, it does not in and of itself suggest professional misconduct.

Please refer to Supreme Court’s website on the taxation procedure.

Q.

How do I mediate a dispute on legal costs?

The Law Society administers a mediation scheme for clients and their lawyers to resolve dispute on legal costs by way of mediation. As this is a mediation scheme, consent from both parties are required. For more information on the scheme, please click here.

Q.

Can I complain against my lawyer for 'overcharging'?

While overcharging is prohibited under the Conduct Rules, it is not professional misconduct merely because a client disagrees with his lawyer about the amount of fees chargeable. It is also recommended to get the bill of costs taxed by the Court before filing a complaint with the Law Society against a lawyer for 'overcharging'.

Q.

Can my lawyer go to Court to file a suit to recover his legal fee?

Yes, a legal fee owing is treated as a debt and your lawyer may choose to file a Writ of Summons in court to recover the outstanding amount. There could be additional cost involved once a Writ is filed. To avoid such action, it is important that you and your lawyer should try to settle any dispute on legal fees as early as possible.

Q.

Does my lawyer has the right to hold on to my document if I refused to pay his fee?

Under common law, your lawyer has the right to retain your original document as security, or what is commonly known as a 'lien', if you do not pay his legal fee. Your lawyer must however release the document if suitable arrangements to protect his lien are made in accordance with the Conduct Rules. It is important that you and your lawyer should try to settle any dispute on legal fees as early as possible.