Legal Costs

 

What are Lawyers Entitled to Charge

Lawyers are entitled to receive reasonable fees for work properly done on behalf of their clients.

Non-contentious matters

Under section 108 of the Legal Profession Act (the 'LPA') and the Solicitors' Remuneration Order 2003 ('SRO'), the remuneration of a solicitor for non-contentious matters shall be the sum that is fair and reasonable having regard to all the circumstances of the case, in particular:

  • 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. Such agreements can be challenged in Court on the ground that they are not fair and reasonable.

A solicitor may receive a deposit from the client as security for fees to be charged. A solicitor may also charge interest on his disbursements and costs from the end of one month of the date of his demand for payment.

The agreement may be for:
  • payment of an agreed amount irrespective of the volume of work done (a fixed fee);

  • a non-refundable retainer (deposit) for work to be undertaken. This deposit will 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.

Such agreements can be challenged in Court on the ground that they are not fair and reasonable. The lawyer is, however, prohibited by law 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.

If there is no agreement as to the legal costs, the lawyer can charge according to the nature and complexity of the matter, the skill, labour and responsibility involved on the part of the lawyer, the experience of the lawyer, the length of time taken to complete the matter, and the number and importance of the documents prepared and perused by the lawyer.

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. 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. Such costs are called 'party and party costs'.

What Can I Do if I am Dissatisfied with My Lawyer's Bill of Costs
  • 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 lawyer can quickly and easily clarify for you.

    Sometimes your concerns may be justified and you should give your lawyer an opportunity to rectify the error.

  • 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 of 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 break.

Taxation

The LPA 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 obtain an order for taxation within one year from the delivery of the bill. However, in a case where a lawyer and his client 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.

'Party and party costs' are usually taxed on a standard basis. 'Standard basis' means that the party claiming costs has to show that any particular item was reasonably incurred and therefore allowed.

The legal costs you are liable to pay to your own lawyer are 'solicitor and client costs'. For contentious matters, 'solicitor and client costs' are taxed on an indemnity basis. 'Indemnity basis' means that the party paying costs has to show that any particular item was unreasonably incurred and therefore disallowed.

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.

If you succeed in your contentious matter, you can expect to recover your 'party and costs' which will cover part of your 'solicitor and client costs'.

The procedure of taxation (of the 'solicitor and client costs') if you are dissatisfied with your lawyer's charges is as follows:

  • Filing and service of the bill of costs The bill of costs should be filed and subsequently served on your lawyer (or on you if your lawyer initiated the taxation where you disputed the quantum of the bill). You should note that, for the purposes of taxation, your lawyer is allowed to file a bill of costs for a greater amount than the original bill he sent to you. There is a specific format as to the bill of costs to be submitted for taxation.

  • Objections: P & Q

    You may object to the bill of costs or portions of it on principle or quantum or both principle and quantum.

    If you object to the bill of costs or portions of it on principle, you are saying that the lawyer is not entitled to the costs at all.

    If you object to the quantum, you are saying that the lawyer is entitled to the costs but you disagree to the sum he is entitled to.

    All objections are to be filed and served in a notice of dispute (in the proper form) seven days before the date of the taxation hearing.

  • The taxation hearing

    On the day of the taxation hearing, a list of all the bills of costs fixed for hearing will be posted at the notice board of the Registry.

    The Registrar may, in the discharge of his functions with respect to the taxation of costs:

    • take an account of any dealings in money made in connection with the payment of the cost being taxed, if the court so directs;

    • require any party represented jointly with any party in any proceedings before him to be separately represented;

    • examine any witness in those proceedings; or

    • direct the production of any document which may be relevant in connection with those proceedings.

  • If you fail to turn up for the taxation hearing within a reasonable time after the time appointed for the taxation, the Registrar, if satisfied that you had notice of the date and time appointed, may proceed with the taxation.

  • Review of Registrar's decision by Judge

    If you are dissatisfied with the Registrar's review, you may within 14 days, apply to a Judge in Chambers for an order to review the taxation. The Judge may either increase or decrease the taxed costs. Alternatively, the Judge may dismiss the review.

    Further appeals from the decision of the Judge are also available. You are advised to seek independent legal advice before requesting for taxation.