My Lawyer is Overcharging Me, What Can I Do?
If you have been presented with a legal bill that seems unreasonably steep for the amount of work carried out, you may be concerned that your lawyer is overcharging you. Alternatively, you may feel that your lawyer has not been transparent about the types of fees that are incurred and how fee payments should be made.
This guide provides an explanation of the types of lawyer fees that you can expect to be charged with and several ways to challenge a legal bill in Singapore if you believe that you have been unfairly charged.
What Do Lawyers Usually Charge for and How Do They Bill?
In order to determine if your lawyer has unfairly charged you, it is helpful to have an understanding of:
- What types of fees lawyers typically charge,
- How lawyers usually bill for work; and
- Practices lawyers must abide by when charging clients.
Types of fees lawyers typically charge
When you hire a lawyer, the legal fees that lawyers typically charge can be split into two categories:
- Professional fees; and
Professional fees are fees charged by a lawyer for providing professional legal services, and they can be structured as flat fees or hourly fees.
Simple and routine work such as drafting a will or facilitating property transactions is usually charged on the basis of a flat fee.
More complex matters such as litigation will usually be charged on an hourly basis. This is because it can be difficult to estimate the effort and time taken to represent a client in a complicated and lengthy trial. In some cases, lawyers may charge an hourly rate, subject to a fee cap.
Disbursements are expenses that are incurred in the course of assisting you with the legal matter. Examples include the costs of photocopying documents, court filing fees, and fees relating to the hiring of expert witnesses and the procurement of expert reports.
You may wish to read our other article for more information on the fees involved in civil litigation proceedings. Alternatively, for an example of how much divorce cases may typically cost, refer to our comprehensive guide on divorce fees.
What Your Lawyer Should Never Charge You For
Under the Legal Profession Act (LPA) and the Legal Profession (Professional Conduct) Rules (LPR), lawyers are not permitted to charge contingency fees. Hence, lawyers are not allowed to accept a “bonus” for winning a case, or peg their fees to the amount awarded to the client in a dispute.
How lawyers usually bill for work
Generally, firms will request a deposit into a client account before work on the case begins. A portion of the deposit sum may be earmarked for disbursements or professional fees.
A bill may be sent to you on a monthly basis for the work undertaken in the previous month. Alternatively, firms may bill for large lump-sum payments at specific junctures in the case.
Practices lawyers must abide by when charging clients
Lawyers are required to charge fairly for work done. The LPR sets out some practices that lawyers must abide by when charging their clients. In particular, a lawyer must:
- Inform the client of the basis on which fees for professional services will be charged, and of the manner in which those fees and disbursements are to be paid by the client;
- Inform the client of any other reasonably foreseeable payments that the client may have to make and of the stages at which those payments are likely to be required;
- To the extent reasonably practicable and if requested by the client, provide the client with estimates of the fees and other payments; and
- Ensure that the actual amounts of the fees and other payments do not vary substantially from the estimates, unless the client has been informed in writing of any changed circumstances.
How to Know If Your Lawyer is Overcharging You
Factors taken into consideration in determining lawyer fees
As mentioned above, the lawyer fees charged must be fair and reasonable. It is important to bear in mind that each set of circumstances is unique. Therefore, whether the fees are fair and reasonable is judged based on several factors which differ depending on whether the fees relate to a contentious or non-contentious matter.
The court will consider the following factors for contentious matters that involve litigation:
- The complexity of the matter;
- The time spent on the matter;
- 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).
In addition to the factors above, non-contentious matters such as drafting a will, contract or conveyancing may also involve the following factors:
- The labour and responsibility required of the lawyer;
- The importance of the documents prepared or reviewed;
- The place and circumstances in which the business concerned was transacted; and
- The urgency and importance of the cause or matter to the client.
What to Do If a Lawyer Overcharges You
If you believe that you have been unfairly charged, there are some actions that you can take to reduce your lawyer fees.
As lawyers are required under the law to charge fair and reasonable fees, you have the right to take action even if you previously agreed to the fees charged and only realised, with hindsight, that you have been overcharged.
1. Contact your lawyer and request an itemised bill
If you suspect that your lawyer is overcharging you, you should first speak to your lawyer about it. The lawyer may be able to address your concerns such that you do not need to spend further time, energy or money pursuing the matter.
Also, request for an itemised bill from your lawyer if you haven’t already received one. An itemised bill will provide a detailed breakdown of the lawyer fees so that you have a clearer picture of how the fees were computed. For example, the itemised bill may bring to light the fees charged for “behind the scenes” work that the lawyer had undertaken for your benefit.
The itemised bill will record the amount of time that has been expended on doing research for your case, communicating with you or third-parties, and representing you in court.
In some cases, after looking at the itemised bill, you may conclude that the total lawyer fees charged are reasonable. However, if you still believe that your lawyer is overcharging you, you should raise this concern with your lawyer. Your lawyer is required under the LPR to inform you in writing of your right to apply to the court to have the bill assessed (explained below).
2. Assessment proceedings
If you and your lawyer are not able to settle the dispute over legal fees on your own, you can bring assessment proceedings against your lawyer. Assessment (of costs) – previously known as “taxation (of costs)” – is a process where the courts will determine the reasonableness of the legal fees charged by your lawyer, taking into account the factors listed above. The court can exercise its discretion to reduce the quantum of the lawyer fees.
The legal costs will be assessed on an “indemnity basis”, which means that you will have to show that a particular item in the bill was unreasonably incurred and should be removed from the bill.
Who can apply for an order of assessment and how much does it cost?
Either you or your lawyer can apply for an order for an assessment by filing a Bill of Costs by way of an originating application within 1 year from the delivery of the bill. However, if both parties agree to an assessment, the court may proceed to assess the bill even if no order has been applied for and obtained.
The cost of filing a Bill of Costs is $300 for claims of up to $1 million and $500 for claims above $1 million. If the bill when assessed is less than a 6th part of the delivered bill, your lawyer will pay the costs for assessment. Otherwise, you will have to bear the costs, should you have either been the one to apply for an assessment, or attended the assessment hearing.
What happens after the Bill of Costs has been filed?
After the Bill of Costs has been filed by either party, the court will fix a hearing date for the assessment proceedings. This is usually at least 14 days after the filing date. The party that applies for the order must serve a copy of the Bill of Costs on the other party within 2 days after the court issues a hearing date.
If the Bill of Costs is filed by your lawyer, and you wish to object to the quantum and number of items claimed in the Bill of Costs, you must file a Notice of Dispute using Form 19 in Appendix A of the Supreme Court Practice Directions. This notice must be filed at least 7 days before the hearing date.
The hearing will take place before the assessing Registrar. In deciding the appropriate amount of costs (to be paid by you), the assessing Registrar will consider circumstances such as:
- The payment of money to the courts and the amount paid;
- The parties’ conduct before and during the proceedings;
- The parties’ conduct in relation to any efforts to resolve the matter through dispute resolution methods such as mediation;
- Whether the parties followed the relevant pre-action protocol or practice directions issued by the assessing Registrar; and
- The complexity and difficulty of the matter handled by the lawyer.
If you are not satisfied with the amount of costs granted by the assessing Registrar, you can file an application for a review by a judge from the General Division of the High Court within 14 days of receiving the decision.
3. Mediation/arbitration proceedings under the CDR scheme
Alternatively, you may wish to participate in the Law Society’s “Cost Dispute Resolve” (CDR) scheme. It is important to note that participation under the scheme requires the consent of both you and your lawyer.
The CDR scheme is an attractive dispute resolution method because its objective is to resolve the dispute amicably, and as swiftly and cost-effectively as possible.
The scheme has two stages of dispute resolution:
- Meditation; and
- If mediation is unsuccessful, arbitration.
What is the difference between mediation and arbitration?
Mediation is essentially a negotiation process between the two parties, but with the supervision and facilitation of a neutral third-party called the mediator. The focus is on reaching an outcome that is beneficial to both sides.
As the mediator himself is not empowered to make a decision on the outcome of the dispute, any settlement that is brokered through mediation would require the acceptance of both parties.
Arbitration, on the other hand, is a more formal process whereby the neutral third-party, an arbitrator, will first review the evidence submitted by both sides. In an overcharging case, such evidence could include timesheets that detail the work undertaken by your lawyer.
The arbitrator will then come to a final decision that is legally binding on both parties. The decision cannot be appealed or reviewed. Arbitration is useful when the parties are unable to come to a mutually agreeable compromise under mediation.
Applying for the CDR scheme
To apply to be part of the CDR, you and your lawyer must jointly submit a form which is available here. The cost of the proceedings starts from $500 and is to be equally shared by the parties.
Generally, the Law Society recommends that parties try to complete the mediation or arbitration process in 1 session (not exceeding 3 hours) to keep the costs of participating in the scheme down.
4. Lodge a complaint with the Law Society
The Law Society is a body that regulates the conduct of all registered lawyers in Singapore. Members of the legal profession are expected to uphold certain professional standards. The Law Society has procedures in place to investigate complaints made by the public and has the power to take disciplinary action against the lawyer in question.
Hence, if you believe that you have been unfairly charged, you can lodge a complaint against your lawyer with the Law Society at no cost.
There are two main heads of complaint that are related to lawyer fees:
- Inadequate professional service under section 75B of the LPA for a failure to explain how services will be charged, how payments should be made, to provide an estimate of fees and to send the client regular invoices; and
- Professional misconduct under section 85(1) of the LPA for gross overcharging for work done.
For example, if you feel that your lawyer’s fee structure and payment instructions lack transparency, you can consider bringing a complaint under both sections 75B and 85(1) of the LPA. However, if your complaint relates solely to an overcharging of fees by your lawyer, the relevant provision for bringing your complaint under is section 85(1) for professional misconduct.
In general, the Law Society recommends that you undergo the assessment proceedings first prior to filing a complaint. This is because it can be rather difficult to meet the threshold of showing that any overcharging amounts to a breach of professional standards.
If you do wish to lodge a complaint, please note that there are different time limits for the making of complaints. Complaints under section 75B must be made within 3 years of the conduct complained of, while complaints under section 85(1) have a longer time limit of 6 years.
To lodge a complaint, you must submit a letter (emails are not accepted) addressed to the Head, Conduct Department, Law Society of Singapore. The header of your letter must indicate whether your complaint relates to section 75B or section 85(1) of the LPA. The letter should contain the following information:
- Your full name;
- Your full address;
- Your occupation;
- Details of the incident or behaviour which you think amounts to professional misconduct; and
- Attach and highlight any relevant documents or other evidence in support of complaint.
A template of a complaint letter is available here for section 75B and section 85(1) respectively. If you wish to lodge a complaint against your lawyer under both sections, you can use both templates.
Please note that if your complaint relates to gross overcharging under section 85(1) of the LPA, you must additionally append a Statutory Declaration form in your letter. A Statutory Declaration is a legal document which states that the statements contained in your complaint are accurate. False statements may result in penalties under the Oaths and Declarations Act.
The letter should be mailed to the following address: ”The Law Society of Singapore 39 South Bridge Road Singapore 058673”. For more information on how to lodge a complaint with the Law Society, click here.
Investigation process for section 75B complaints
- The Law Society will consider your complaint. It may dismiss your complaint or refer it for an inquiry.
- If your complaint is referred for an inquiry, you can choose to undergo mediation, which is provided free of charge. If the parties come to a settlement during mediation, the case will be closed.
- If you refuse mediation or if the mediation is unsuccessful, the matter will then be referred to the Investigative Tribunal (IT). The IT is headed by 2 practising lawyers and they will obtain an explanation from your lawyer, and where necessary, may request for further evidence to be provided by either party. This will take between 2 to 6 months to complete.
- The IT will provide a report and recommendations to the Law Society. The Law Society may choose to accept or reject these recommendations, and take appropriate actions against the lawyer as necessary.
Investigation process for section 85(1) complaints
- The complaint will be reviewed by 2 bodies that are separate and independent from the Law Society. The Review Committee will first determine if your complaint has merit, and where appropriate, will refer it to the Inquiry Committee (IC) for investigation.
- The IC will consider whether there should be a formal investigation by the Disciplinary Tribunal (DT).
- If the IC recommends that no formal investigation is required, it can recommend that the Law Society dismiss the complaint or take certain actions against the lawyer.
- Alternatively, the IC may recommend that a formal investigation by the DT is required. The DT can then choose to dismiss the complaint or take certain actions against the lawyer.
What actions can be taken against the lawyer?
If it has been found that the lawyer has provided inadequate professional service or is guilty of professional misconduct, the Law Society can order a penalty to be imposed on the lawyer, a warning or reprimand to be given to the lawyer, or other remedial measures to be taken.
For cases of lawyers who overcharge their clients in particular, it is possible that the Law Society may order that your lawyer fees be:
- Reduced to a particular sum;
- Refunded in whole or in part; or
- (For fees you have yet to pay the lawyer) Waived.
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