NOR AKMAR BT YAKUB (2012425876)NUR DIANA BT RAMLAN (2012852036)NUR ELISSA BAHARUDIN (2012890172)UMAR FAIZ B. ABDUL KOHAR (2012409916)MUHAMAD RAHIMI B. RADUAN (2012456414)MUHAMMAD SYAFIQ B. AHMAD (2012427396)

DISCUSS ON FEES FOR LITIGIOUS OR CONTENTIOUS MATTERS. QUESTION

What is ethics?The word ethics is derived from the Greek word ethos, which means "character," and from the Latin word mores, which means "customs.“

Legal ethics is the minimum standards of appropriate conduct within the legal profession. It is the behavioural norms and morals which govern judges and lawyers.

It involves duties that the members owe one another, their clients, and the courts.

introduction

One of the debated ethical issue is on the point of legal fees for litigious matters.

legal fees for non-litigious matters are fixed as per the Legal Profession Act 1976. The Solicitors’ Remuneration Order 2005.

no similar provision which stipulates the scale of fees in contentious matters. (no fixed guideline)

However, it is not absolute discretion as there are some guidelines stated so to shed some light on what are the headings to be taken into consideration

Fees for Litigious or Contentious Matters

Rule 11In determining the amount of fee for litigious or contentious matters

involving representation of a client in Court, it is proper to take into consideration:-

(a) the time, labour and skill required(b) the novelty and difficulty of the question involved(c) whether acceptance of the particular employment will preclude his

appearance for others of which he has a reasonable expectation(d) the customary charges of the profession for similar services;(e) the amount in controversy(f) the benefit resulting to the client for the services;(g) the character of the employment- whether casual or for an established

client; and(h) the special position or seniority of the particular advocate and solicitor.”as guidelines for lawyers to come up with a proper amount of legal fees to

impose on their clients.`

the Legal Profession (Practice and Etiquette) Rules 1978

TimePreviously, cases have to be completed within two yearsDue to several implementations by the court to speed up trials,

lawyers were required to be more efficient so as to ensure that the disposal of cases could be done within the time prescribed.

LabourWhen a client hires a law office staff to work on his behalf, it means

hiring a team of law office staffs to work on the client's behalfthe court has also introduced the recording and transcription (CRT)

system in conjunction with the implementation of the e-court system.

In 2012, the court fees were revised and incorporated under the Rules of Court 2012. Prior to this, the last fee increase was in 1980. Surprisingly, the new fees are between 100% and 300% higher than the old fees

(a) THE TIME, LABOUR AND SKILL REQUIRED

Skills

it is normal for a lawyer who has a reputation of being an expert or devotes most of his time to a particular field of law to charge more than someone less skilled.

However, circumstances sometimes require a more skilled practitioner be employed for a difficult case.

A client should expect to pay a higher rate to expert lawyers, especially where such expertise in a specific area of the law is much in demand

It is a fact that lawyer's fees are determined by market forces, especially in contentious matters which involve going to the courts.

the lawyer should also receive fair remuneration for the services rendered by the client. It must be noted that a lawyer runs a commercial business.

continue

John F. Knight, Jr. v The state of Alabama

the plaintiffs brought an action against the defendant, the State of Alabama, alleging that vestiges of discrimination remained in the public higher education system

The plaintiffs were successful at trial and brought a motion for attorneys' fee.

The court in this case awarded the plaintiffs' attorneys interim fees and plaintiffs requested additional attorneys' fees and expenses.

Plaintiff also requested enhanced fees based on the novelty and complexity of the issues in the case and the results obtained

(b) THE NOVELTY AND DIFFICULTY OF THE QUESTION INVOLVED

the question is whether a lawyer can impose a certain sum of fees if a particular employment he accepts preclude him to appear for others of which he has a reasonable expectation

Where a lawyer is attached to a particular brief and is unable to accept future briefs which falls under the category of reasonable expectation, then it may well be justified for him to charge a certain fee for that particular brief he is attached too.

As a lawyer, if he is attached to a very important case for instance, he obviously cannot take on another case simultaneously

However, he can also not be expected to have only that particular brief until it is disposed before he could take on another brief.

where a lawyer faces a conflict of choosing between two cases, and he chooses one of the two which causes him to lose a reasonable profit from the other, he is entitled to impose a higher fee.

(c)WHETHER ACCEPTANCE OF THE PARTICULAR EMPLOYMENT WILL PRECLUDE HIS APPEARANCE FOR OTHERS OF WHICH HE HAS A REASONABLE EXPECTATION

In determining the customary charges of the profession for similar services, it is proper for a lawyer to consider what the customary charges for a similar case are

no lawyer should permit himself to be controlled thereby or to follow it as his sole guide in determining the amount of his fee.

. Hulse v The Honorable Van Wifvatreferred to the case of Parrish v Denatostating that the court adapted to criminal cases most of the

criteria which are listed in the Iowa Code of Professional Responsibility as general guides for setting reasonable attorney fees, and that includes taking into consideration the customary charges for similar services.

(d) THE CUSTOMARY CHARGES OF THE PROFESSION FOR SIMILAR SERVICES

Amount in controversy” which is sometimes called “jurisdictional amount” is a term used to indicate the amount at stake in a lawsuit.

The amount in controversy determines the court’s authority to hear a particular case. It is also called the jurisdictional amount

The claim he charges should be of a reasonable amount that is proportionate to that of the amount in controversy

(e) THE AMOUNT IN CONTROVERSY

Having a lawyer brings a lot of benefit to the client, especially to the lay person who does not have any knowledge about the law itself

In criminal matters, the legal fees usually depend on the seriousness of the charge that the client facing.

the higher the fees that the lawyer will be imposes on the client. In a case of a serious charge, it is natural for the client to not mind about the fees since they will do everything in order to save themselves from the punishment.

In civil matters, legal practitioner is likely to help the client in reducing the amount of losses or damage.

(f) THE BENEFIT RESULTING TO THE CLIENT FOR THE SERVICES

In some civil situations also, arrangements are made which could result in benefit to the client

The fee would then be decided according to the result. Contingent fee arrangement is an example of a situation where

the result itself may decide the fee.This type of fee arrangement is usually seen in personal injury

cases. It is where the lawyer receives no fee if less money is recovered for the client.

In Malaysia, a pure contingency fee arrangement is prohibited under Section 112 of the Legal Profession Act 1976

Yee Kang And Sons & Anor v Chim Yiam, Lee, Tan & Associatesthe court held that the contingency fee claim by the defendant

was illegal and therefore, in the interest of justice, a declaration was ordered that the plaintiffs owed no such sum to the defendants.

‘established clients’ mean clients which have a higher degree of reputation and status, clients which carry a known name in public.

the more you are known in the eyes of the public, the greater stake and risk it is for you in a litigious matter.

Example: Apple against Samnsung the amount of legal fees both parties invested upon respective

counsels representing them is of a staggering massive sumMorrison Foerster partners (Apple) and of counsel billed a

median rate of $582 an hour for work on portions of the case, while some Quinn Emanuel partners (Samsung) billed on average $821 per hour.

(g) THE CHARACTER OF THE EMPLOYMENT – WHETHER CASUAL OR FOR AN ESTABLISHED CLIENT

Seniority is the length of time that an individual has served in a job or worked for an organization.

in legal profession, someone who has practiced for a period of time is assumed to have more experience compared to others who have lesser experience

Kaufman v Kaufman-the court was held that in order to calculate the fees, the seniority and history matters should be taking into consideration. In this case, since the lawyer was a senior lawyer who had more experience in the legal profession, the court instructed for the fees to fixed at a higher amount.

(h) THE SPECIAL POSITION OR SENIORITY OF THE PARTICULAR ADVOCATE AND SOLICITOR

FactorsSize of the firm

-it is common that, the bigger and more reputable a firm is, the higher the legal fees are imposed. The explanation and rational behind this theory is that the bigger and more reputable a firm is, the higher in demand they are amongst potential clients as they carry a known name in the fieldGeographical

-This theory works as such: where it is more of a city-like place, for example in the Klang Valley, where it is denser in population, the more packed the place is with development in the sense of sprouting of major head-quarters offices, the higher the legal fees would be. This is due to the next factor which relates to both stated factors.

Discrepancy of Legal Fees in Malaysia

Market Forces

-It is a simple cycle whereby it acts together. All of these factors co-relate with each other. The market forces are obviously more active in the city as compared to the villages or rural areas. The market is driven by demand. The higher demand, the higher market force there is. Hence why geographical factor affects the market

demand and thus, leading to increase in the legal fees.

The common knowledge is that lawyers are always entitled to legal fees if the service has been carried out for the client either in contentious or non-contentious matters.

There are circumstances where the lawyers are not entitled to legal fees. (legal aid program)

Bar Council Legal Aid Centre (BCLAC)was founded by the Malaysian Bar Council.It is one of the two organisations in Malaysia which provide free

legal advice & representation, and it has branches to represent each state in Malaysia.

Centre provides a representative in contentious legal matters such as criminal and civil suits. It was funded by the sole contribution of members of the Bar and cases are taken on a voluntary basis by dedicated lawyers.

Legal Aid: An Exception

there are certain qualifications to be met before a person can engage a lawyer under this scheme :- a person must fall within the category provided under the ‘Means Test’ the applicant’s monthly income after deduction of monthly expenses

should be RM 650 for a single person and RM 900 for a married couple. a person shall not have; firstly, a house more than a value of RM 25,000 or a car more than a value of RM 7,000 and thirdly, a motorcycle more

than a value of RM 4,500 respectively A person who possesses cash or securities such as savings account with a

value more than RM 5,000 shall not qualify for the legal aid program.Thus, in these circumstances, a person who is qualified for legal aid

program would not have to pay legal fees for the advice and legal representative

As a consequence, a lawyer who represents a person under legal aid program would not be entitled to fees.

Therefore, it can be deduced that legal fees are not an absolute privilege to lawyers. There are always situations where fees are not payable even though a service has been given to the particular person.

Order 59 of the Rules of Court 1996the complexity and novelty of the matter, the skill, the

knowledge and responsibility required, the time and labour expended, the number of and importance of the documents, and the circumstances under which the work was done for instance, at night, or in primitive surroundings.

A Singapore legal fee is based on hourly and fixed rate. In addition, in Singapore legal fees, taxation imposed on it and this was decided by way of applying it to the court (LPA)

This apply for both contentious and non-contentious matters>This gives less risk on part of the client in paying to their lawyer if the cases have no chance to win

Position in Singapore

Singapore introduces hearing fees which was introduced by Singapore Supreme Court

It is introduced in for the justice for less fortunate people. A litigant’s legal costs include solicitor-client costs; the litigant’s

own costs as well as the litigant’s own disbursementsThe Singapore courts also have power to supervise the legal

cost of the litigants so that the fees are not exceeded. The purpose is to uphold justice for the client who would not able to pay the excessive fees

Hearing Fees

the term “legal costs” refers to both attorney’s fees and out-of-pocket expenses which is also called disbursement.

The Australian Civil Liability Act 2002 had set out to achieve in making more changes in respect of civil action for damages.

State’s Legal Profession Act 1987> imposed limitations on the legal cost recoverable in cases of small claims

For example, where personal injury claims do not exceed $100,000, the maximum amount of costs recoverable for legal services provided for either plaintiff or defendant is 20 percent of the amount recovered or $10000, whichever is greater

POSITION IN AUSTRALIA

There is so much difference compared to the situation in Malaysia in terms of personal injury claims, whereby there is no limitation whatsoever that is imposed in terms of legal fees.

This shows that the situation in Malaysia is not very much fair to the client because there is no limitation to the lawyers in imposing scale fees for personal injury claims

Australia limits the scale of legal fees via the Civil Liability Act 2002, whereas Malaysia does not have any provision in any statute that limits the amount of legal fees which a lawyer can impose on the client in contentious matters.

Australia limits the scale of legal fees via the Civil Liability Act 2002, whereas Malaysia does not have any provision in any statute that limits the amount of legal fees which a lawyer can impose on the client in contentious matters

in United Kingdom, the contentious costs are defined as monies payable for legal services in connection with contentious business

there are various options in charging the client in the contentious matters : hourly rate, fixed costs, contingency fee agreements, conditional fee agreements, contentious business agreements and public funding.

The usual method of charging is to charge an hourly rate for time spent

There are two ways of charging under hourly rate method:First, the clients have to pay the cost per hour spent by a solicitor on

a matter with regard to the overhead expenses of the solictor’s firmSecond, the client also has to pay for the conduct and care of the

solicitor on the matter. Usually, the charges are 50 per cent of the rate of the overhead expenses

Position in United Kingdom

Usually, the charges are 50 per cent of the rate of the overhead expenses. The Senior Court Costs Office (SCCO) has set Guideline Hourly Rates (GHR) for different levels of fee for the guidelines of the solicitor to assess the fees.

the fees are calculated based on the overhead expenses, the conduct and care and hour taken to settle the matter

there are various methods charging to client but not common among legal practitioner in United Kingdom

a) Contigency Fee Agreement- agreements where the fee is calculated as a percentage of damages recovered- the contingency fees were expressly prohibited for use in contentious matters in the 2007 Code of Conduct- Tel-ka Takl Ltd v HMRC

b) conditional fee agreementMust meet the requirement contained in section 58 of the

Courts and Legal Services Act 1990 (CLSA 1990)These requirements give some leeway for a solicitor to fix a

certain amount of fees in the contract for the contentious matter

c) contentious business agreementsgoverned by Section 59-63 Solicitors Act 1974The effect this section makes a client loses the right to a

detailed assessment of his costs

The common practice was the legal fees were charged based on the hourly rate. However, solicitors may also opt other methods such as conditional fee agreements, contentious business agreements and public funding.

The scale of legal fees relating to contentious matter was not provided by the statue unlike non-contentious matter

However ,the guideline is provided under Rule 11 of the Malaysian Legal Profession (Practice & Etiquette) Rules 1978

there are merely guidelines, lawyers still have to bear in mind that they owe a duty to the client with regards to the charging of professional fees.

conclusion

THANK YOU FOR YOUR ATTENTION !!!