What Happens If I Don’t Pay My Legal Fees?
The legal industry is ultimately one of service provision. As a recipient of legal services, you are expected to pay your lawyer for the services they have rendered. However, many events leading up to encounters with lawyers in our everyday life may be occasions of distress (e.g. divorce, personal injuries, business hiccups). As such, you might find it difficult to pay your lawyer under such personal circumstances. This is especially since lawyer fees can be quite high at times if your case is a complex one.
In any case, lawyers are entitled to receive reasonable fees for their work, and there are multiple legal avenues they can explore in order to recover unpaid legal fees from you.
This article will cover:
What Can My Lawyer Do If I Don’t Pay My legal Fees?
Generally, lawyers use two methods to recover unpaid legal fees. First, your lawyer has the right under the common law to retain your original documents and legal files as security for the fees you owe them. This is commonly known as a “solicitor’s lien”.
Second, your lawyer can file an Originating Claim with the courts in order to obtain a court judgement for the debt (i.e. unpaid legal fees) you owe. After that, your lawyer can commence enforcement proceedings in court to recover the debt. These methods are explained in further detail below.
A solicitor’s lien refers to a solicitor’s (i.e. your lawyer’s) right to keep your documents as security until you pay all fees and disbursements (i.e., reasonable expenses incurred by the solicitor in the course of the case, such as transportation fees and printing fees) that you owe them. These documents usually include your own documents which have been entrusted to your lawyer for the purpose of your case, as well as court documents arising out of your case.
Examples of documents which can be retained by a lawyer in the case of non-payment of legal fees, and the consequences of doing so, are summarised in a table below:
|What can a lawyer retain under a solicitor’s lien?
|Consequences of retention
|Business contracts and other corporate papers
|You will be unable to rely on your contracts in ongoing court cases (if your lawyer has withdrawn from representing you due to non-payment) or in future disputes related to these contracts.
|Your legal file, which contains the pleadings, affidavits, and other relevant evidence in your case
|You will be unable to rely on the file in ongoing court cases (if your lawyer has withdrawn from representing you due to non-payment ) or in future disputes.
|Ongoing documents prepared by the lawyer, such as power of attorney and statutory declaration for the sale of flat
|You will be unable to perform property transactions.
Obtaining a court judgement for the legal fees
Your lawyer can file an Originating Claim in court to obtain a court judgement for the debt (i.e., the legal fees) you owe. After this, they can seek various enforcement orders against you in court to recover the debt.
You may wish to read our articles on the process of debt recovery and the methods of enforcing a court judgement in Singapore for a better understanding of the recovery process. These articles relate to the debt recovery process in Singapore in general and are not limited to the recovery of unpaid legal fees.
What are my options if my lawyer claims a lien?
Paying the legal fees
If your lawyer claims a solicitor’s lien over your documents, the fastest way of resolving the matter is to pay your lawyer the fees you owe as soon as possible. Once the legal fees are paid, your lawyer would no longer have any right to retain your documents.
Negotiating for a payment schedule
If you face financial difficulties paying your lawyer, you may wish to negotiate with your lawyer for a payment schedule or a discount. For example, you may propose a scheduled payment plan with your lawyer under which fees can be paid in different tranches in return for the successive release of your documents.
Providing other reasonable forms of security to the lawyer
If you are in urgent need of the relevant documents (e.g., your power of attorney for the sale of flat is retained but you need to proceed with the property sale within an impending timeframe) but you don’t have the money to pay your lawyer upfront, you may provide your lawyer with other reasonable forms of security. For example, if you offer to create a mortgage over a flat that you own in favour of your lawyer and if the value of the flat, subject to other security interests, equals to or exceeds the amount that you owe, your lawyer, upon accepting the mortgage, must release the documents back to you.
Similarly, if you have engaged a new lawyer to handle your case, the relevant documents must be released to the new lawyer if the new lawyer agrees to:
- Hold those documents subject to the lien;
- Return these documents to the original lawyer once the case is over; and
- Provide reasonable security to the original lawyer for the unpaid costs.
Alternatively, your new lawyer may offer to enter into an agreement with you to obtain payment from you for the former lawyer upon completion of the case. If the former lawyer chooses to accept the new lawyer’s offer, they must release the documents back to you.
What Can I Do If I Believe My Lawyer is Overcharging?
The discussions above generally concern situations where you face financial difficulties in paying your lawyer. However, there might also be a scenario where you simply refuse to pay your lawyer because you believe the legal fees billed to you are unreasonably high. If you are wondering what to do in those circumstances, you might wish to take a look at our article discussing your options if your lawyer has overcharged you.
In brief, if you believe your lawyer is overcharging you after careful consideration of the itemised bill sent by your lawyer, you may wish to apply to court to commence assessment proceedings. In assessment proceedings, the court would be responsible for deciding whether the legal fees charged by your lawyer are reasonable.
Alternatively, you may invite your lawyer to participate in mediation/arbitration proceedings under the Law Society of Singapore’s Cost Dispute Resolve (CDR) scheme. Such proceedings can help you settle your legal fee dispute with your lawyer amicably and economically, with the help of a neutral mediator/arbitrator.
As a service provider, your lawyer is entitled to be paid for their work. Therefore, you should try to pay your lawyer promptly as far as possible. Non-payment of your legal fees may result in your documents being retained by your lawyer as security under a solicitor’s lien, or enforcement actions can be taken against you to recover the fees.
If your lawyer is claiming a solicitor’s lien against you and you face genuine financial difficulties with paying your fees, you may wish to negotiate a payment plan with your lawyer to settle the debt. Alternatively, you may consider offering other forms of security to your lawyer.
Finally, if you refuse to pay your legal fees because you believe that your lawyer is overcharging you, you may consider commencing assessment proceedings in court or inviting your lawyer to participate in mediation/ arbitration proceedings, so that your dispute with your lawyer may be amicably resolved.
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