Feedback sought on conditional fees for lawyers

The Law Ministry (MinLaw) is seeking public feedback on a proposed payment option in which a lawyer is paid only when the claim is successful.

The proposed Conditional Fee Agreements (CFAs) is an additional payment method being considered for international and domestic arbitration cases, as well as specified proceedings in the Singapore International Commercial Court and mediation cases connected to them.

The move is in line with Singapore's aim to be a leading international legal hub, said MinLaw yesterday, adding that the views sought are on the proposal to introduce CFAs and the stated categories of proceedings for which they are intended.

A separate study will be done on whether CFAs will promote access to justice for categories of proceedings not being considered currently, it added.

Payment under the CFA may include an "uplift" or "success" fee, in addition to the lawyer's standard legal fees.

Existing payment methods will continue alongside the proposed CFA. The traditional methods involve fixed fees or time-based arrangements.

Currently, Singapore law prohibits CFAs and contingency fee agreements for lawyers.

 
 

The ban is rooted in common law derived from England and Wales to protect vulnerable litigants and guard against potential lawyer misconduct. But the two countries have done away with the prohibitions.

Several countries, such as Australia, the United States and China, allow such conditional fee agreements in various forms.

The proposed framework will contain safeguards such as defining what constitutes a "successful outcome" by the parties.

Withers KhattarWong managing partner Deborah Barker, a senior counsel, welcomes the "exciting development", saying: "In conditional fee arrangements, the lawyer and law firm will have to decide how much of the agreed risk they are prepared to bear that would otherwise fall on the litigant, and to what extent they are prepared to act on their assessment of the chances of success of the litigation.

"The effect of the conditional fee arrangements on legal practice will depend on the precise scope of the permitted use."

The Law Society's president, Senior Counsel Gregory Vijayendran, said the society will study the proposals and make submissions in due course.

The public consultation will continue till Oct 8 and the paper on it may be viewed online at: https://www.mlaw.gov.sg/content/minlaw/en/news/public-consultations/Public-Consultation-on-Conditional-Fee-Agreements-in-Singapore.html

People may e-mail feedback to MLAW_CFA_Consultation@mlaw.gov.sg

A version of this article appeared in the print edition of The Straits Times on August 28, 2019, with the headline 'Feedback sought on conditional fees for lawyers'. Print Edition | Subscribe