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Fair remuneration for solicitors

Monday, 12 June 2006 09:30am

©New Straits Times, Letters to Editor (Used by permission)
By Roger Tan, Chairman Conveyancing Practice Committee, Bar Council Malaysia

I REFER to the comments by B.H. Ang ("Hike in legal fees unjustified" - NST, April 4) and C.H. ("Certainly not in public’s interest" - NST, March 14) with regard to the new Solicitors’ Remuneration Order 2005 (SRO 2005).

Their letters contained misleading information and allegations.

Legal fees for property-related transactions are charged in accordance with a scale or fixed sum prescribed by the SRO as agreed by the Solicitors Costs Committee comprising the Chief Justice or a judge of the High Court nominated by the Chief Justice, the Attorney-General or a member of the Attorney-General's Chambers nominated by the Attorney-General, the Chief Registrar or a senior assistant registrar nominated by the Chief Registrar and four advocates and solicitors nominated by the Bar Council.

The fee structure is an accepted method of charging for professional services in Malaysia.

The Bar Council, as with other professional bodies, views professional services as intellectual and creative products and not as commodities.

Therefore, it is not in the interest of the public or the legal profession for legal fees relating to property transactions to be decided by "market forces".

A "free market" will tempt the public to seek the cheapest services. It will also lead to undercutting of legal fees.

When fees do not commensurate with the services provided, it is not uncommon for the quality to be compromised.

Thus, scale fees prevent overcharging and undercutting, and protect consumers by promoting quality services as solicitors will compete based on the quality of their services and not on pricing.

On Jan 1, 2006, the SRO 2005 came into force. The legal fees for property-related transactions are computed this way (see table below).

There are no increases in fees for non-Housing Development Act transactions up to RM100,000 or for HDA transactions up to RM100,000.

Fees have been reduced for HDA transactions above RM100,000.

The old scale fees had been in force for the last 14 years. Since then, the cost of doing business has increased. In that respect, the fee increase for non-HDA transactions is justified.

C.H. had stated that "it is unconscionable for solicitors to seek a bigger percentage in fees for doing mundane work when almost all conveyancing transactions are standard and done by solicitors’ clerks". This is certainly not true.

The responsibilities of a solicitor in conveyancing are extremely onerous, which include searches, draftings and attendances during the pre-contractual, contractual and post-contractual stages.

Many procedural and substantive legal rules need to be considered. The solicitor may have to deal with a number of government agencies.

Conveyancing work is now considered "hazardous", and conveyancing firms have to pay a premium of up to 30 per cent depending on the fee percentage under the Malaysian Bar Professional Indemnity Insurance Scheme.

B.H. Ang, on the other hand, alleged that the monopoly in conveyance has been given to the legal profession, and it is in the hands of the conveyancers to act conscientiously to sustain the concession.

There is nothing to prevent a member of the public who wishes to sell or buy a property from acting for himself.

Each stage of the conveyancing can be done and performed by either the seller or the buyer.

Parties can draw up their contracts and have them attested by any officer or person specified in the National Land Code. The buyer can conduct his own title search, submit his agreement or instrument of transfer for stamping and present it for registration at the land registry or land office.

In this respect, the SRO 2005 has set a fair remuneration for solicitors undertaking non-contentious business.

The SRO 2005 came about as a result of a resolution of the Malaysian Bar passed on March 27, 2004, after which the Bar Council convened a meeting of the Solicitors’ Costs Committee to confirm amendments to the fees.

The rate approved by the Solicitors’ Costs Committee is, in fact, lower than that proposed by the Malaysian Bar.