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Fixed legal fees off the table for now

THE proposal by the Civil Justice Commission on the use of scale legal costs is off the table for now, lawyers who attended a townhall on Nov 22 have been told.

According to a lawyer who was at the session for further feedback on cost proposals, Law Minister K Shanmugam broke the good news to the practitioners who had been understandably upset about the proposal of fixing legal costs for civil proceedings.

It is understood that the Ministry of Law (MinLaw) could have waited for the consultation period to be over, gather all the feedback, and then decide on how to proceed with the proposal to fix the solicitor and client fees. But it decided to withdraw this particular proposal, without having to wait for the consultation period to conclude because additional time was not going to improve the quality of the decision. And all the points that needed to be made had been made to MinLaw.

The minister told the audience that when the facts are in, it is MinLaw’s duty to think through and decide. And he prefers to be decisive and quick.

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Based on the feedback,  MinLaw was clear about what the Bar’s views were. And the public interest element in going through with this proposal was not clear – some questions had been raised which needed consideration and rethinking. If it was clearly in the public interest, the ministry would proceed. But there were legitimate questions raised on public interest, and what might happen to the Bar.

The minister has spoken with the Chair of the Commission, and he agreed with the approach.

But the recommendation might be revisited in a few years’ time after the litigation process has been streamlined and not before the Bar has been consulted, lawyers were told.

Lawyers were also assured that MinLaw and the Supreme Court, which put up the joint consultation paper on the proposed reforms to the civil justice system, do not intend to weaken the Bar.

Law Society of Singapore’s president Gregory Vijayendran told The Business Times that at the first townhall on Nov 12, there was a substantial amount of robust feedback and sentiment shared by a substantial number of members from the Bar about the costs proposals in the civil justice reforms. 

This included feedback on why the proposal was neither in the public interest nor the profession’s interest. For instance, one point raised was that the proposed scale cost model would entail the client paying his lawyer a full amount of fees even if the case was settled early.

Mr Vijayendran said: “Today’s response by the Minister for Law evidences that the feedback was taken seriously ... The Law Society welcomes the decisive stance taken on this issue. The episode reflects the constructive relationship between the Law Society, Ministry of Law and the Bench.”

The Civil Justice Commission, set up in 2015 by the Supreme Court, has recently recommended fixed legal costs to be introduced for civil proceedings in a move to give litigants pause and to incentivise lawyers to resolve disputes quickly. A public consultation exercise on the reports has been ongoing since Oct 26, and will end on Jan 31, 2019.

Scale legal costs for taking a case to court allow parties to weigh the consequences before deciding whether it is worthwhile to incur the legal costs, said a panel that made the recommendation. It would also encourage lawyers to resolve the dispute quickly and obtain the fixed price for less time and effort so that they can take on more cases.

Under such a regime, solicitor-and-client costs – which a litigant pays his lawyer – should generally be equal to party-and-party costs, which the losing party pays the winning party to defray his legal expenses. “The intended result is that a successful litigant who conducts his case reasonably throughout should recover all his litigation costs,” said the commission. Parties can opt out if they are aware of the consequences.

Close to 1,000, or one in five, practising lawyers had turned up at the Nov 12 townhall to raise their grave concern with the minister about the “most dramatic changes” - the concept of scale legal costs in civil suits and the move to equate solicitor-and-client costs to what the losing party pays the winning party. Scale legal costs could more than halve payouts that lawyers now command.

As indicated in the report, under the multi-tiered scale of costs, maximum sums allowed for professional fees range from S$6,000 for a S$60,000 claim to S$148,000 for a S$10 million claim, and S$723,000 for a S$200 million claim.