Fixed legal fees off the table for now

Singapore

PROPOSED changes to have civil litigation costs fixed to a scale have been dramatically withdrawn - for now - following a townhall held last evening.

At the session meant for lawyers to give further feedback on the cost proposals, they were instead told the news by Law Minister K Shanmugam - and greeted the decision with rounds of applause.

The Civil Justice Commission set up in 2015 to review the civil justice system had 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 suggestion of scale legal costs and other proposed reforms has been ongoing since Oct 26, and will end on Jan 31, 2019.

However, the "most dramatic changes" that drew broad-based concern among lawyers - 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 - are off the table now.

Close to 600 practitioners were present at last evening's townhall when they learned in the hour-long session that the Ministry of Law (MinLaw) would not be proceeding with the consultation on fixing legal costs that lawyers could charge their clients.

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.

It is understood that the ministry 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 the ministry.

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

Based on the feedback, the ministry was clear about what the Bar's views were. And the public interest element in going through with this proposal wasn't 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 to the Chair of the Commission, and he agreed with the approach.

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 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."

Senior Counsel Thio Shen Yi, who has penned an opinion piece in BT on the cost proposals, said: "The minister genuinely considered our concerns and made a decisive, and right decision."

About 1,000, or one in five, practising lawyers had turned up with frayed nerves at the earlier townhall on Nov 12 to raise their grave concern about the cost proposals - and apparently have put their advocacy skills to good use and made a convincing case for it.

Under the regime suggested by the Civil Justice Commission, 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.

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.

Parties can opt out if they are aware of the consequences.