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Saturday, Oct 18, 2014

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Don't equate reduction of costs with overcharging

The Straits Times | Saturday, Oct 18, 2014

Much ink has been spilt following recent claims of overcharging by lawyers representing the Singapore Medical Council ("Medical, legal professions need to clear the air" by Dr Jeremy Lim Fung Yen, Oct 3; and "Legal profession's unregulated pricing structure" by Mr Philip Williams, last Saturday).

Without commenting on specific cases before the court and the inquiry committee, it appears necessary to explain the process to the public.

There are two typical situations - when one reviews one's lawyer's bill, and when one reviews the opponent's lawyer's bill.

In Singapore, the general rule is that the losing party has to pay costs to the winning party. Parties can agree on the quantum to be paid, or if they disagree, the court will decide the amount payable after hearing arguments from both sets of lawyers.

This is known as taxation.

The winning party's lawyers submit an itemised bill of costs for taxation, which sets out the work done, time spent, lawyers involved and quantum claimed. This bill of costs is subject to the court's detailed scrutiny, and the losing party is entitled to challenge both the overall quantum claimed as well as specific items.

The winning party is entitled to a reasonable amount of all costs reasonably incurred. Any doubts about reasonableness are resolved in favour of the losing party.

The quantum determined by the court is an amount that the losing party ought reasonably to pay, and not what a lawyer may reasonably charge the client.

The law actually intends that there will be an appreciable margin between what a losing party pays in taxed costs, and what a winning party has to pay its lawyers.

It is an attempt to reach a fair balance between the victor and the vanquished.

In practice, most bills of costs submitted for taxation are reduced. The winning party's lawyers have a duty to seek the highest quantum reasonably arguable, and the losing party's lawyers have a duty to seek the highest possible reduction of those claimed costs.

The court will balance both views and decide. That a winning party's bill of costs was reduced on taxation should not automatically be construed as overcharging.

Indeed, if a client is dissatisfied with his lawyer's bill, he can also tax that bill in court.

The Law Society does not condone overcharging by lawyers, and complaints about overcharging are subject to a statutory regime. Complaints made to the Law Society are referred to independent committees for investigation.

These committees are not appointed by the Law Society, and it has no control over them.

The public can have every confidence that there are long-established safeguards in place to address overcharging, whether by one's own lawyer or by an opposing lawyer.


This article was first published on October 16, 2014.
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