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
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.