3 Easy Ways to Be Penny Wise and Pound Foolish in Relation to Legal Services

legal-services

It never ceases to amaze me.

There are 3 simple ways to be “penny wise and pound foolish” I encounter frequently in my solicitor’s practice:

1.      “I don’t want a big long agreement/legal document; I just want something simple”

This potential client is no fool; he recognises that he needs a legally binding contract to protect his interest, but wants something “short” because he doesn’t really want to spend any money.

He even mentions that a “one pager” should suffice as relations with the other party are good.

And I explain that the only time that this document/agreement will be looked at closely will be if there is a dispute between the parties. If there is a row, the agreement will be scrutinised closely, especially by his legal advisor, and will need to stand up to close inspection.

This is the problem with the “one pager”-if there is no dispute the agreement will probably not be referred to again, and it doesn’t matter if it is inadequate.

However, if there is a dispute you don’t want to experience that sinking feeling when you look over your one pager and discover that it is either completely silent on the problem that has arisen, or has dealt with it inadequately and failed to protect your interest.

2.      “I would like you to review my potential employment related case but I am not prepared to pay a small fee for a consultation”

If I am to review the circumstances surrounding, for example, your dismissal from your job, or any other issues you have in your employment, I am going to need to do a few things. These things will require

  • My time
  • My expertise

The things I will probably need to do will be to

  1. take full instructions from you to get your version of events;
  2. review any relevant documentation such as correspondence, contract of employment, and staff handbook;
  3. check any relevant legislation/regulations.

Now, if you also consider that the maximum amount you could be awarded for a successful claim would be two years’ salary you might think that the few bob spent getting your case reviewed would be money well spent, especially if it is less than €100.

Let’s be honest: if you have a good claim the consultation fee will be well spent because of the chance of a successful outcome.

If you don’t have a good claim are you not better off finding this out at the beginning rather than embarking on a costly claim or legal proceedings with little prospect of success.

3.      “I’m buying a house but am not prepared to spend €300 for a structural survey-it’s a waste of money, especially if the sale does not go ahead”

This person sees the spending of €300, or thereabouts, on a structural survey on their target property because the money will be “wasted” if the purchase does not go ahead.

Let’s consider this closely: you are about to make probably the biggest investment of your life with massive money at stake, a decision that will affect you for life, and you don’t want to blow €300 of a survey.

If your survey prevents you from making a bad investment for the rest of your life, for example a pyrite affected house, surely it is a no brainer that the cost of this report is a great investment.

The same principle applies to any property related purchase or lease-there are certain professional fees that come with the territory. If you are not prepared to pay these fees you might be better off steering clear of property investment.

Because the consequences of getting one wrong can be catastrophic.

Conclusion

Think carefully about the consequences of skimping-weight up carefully what can go wrong versus what you are saving.

Solicitors Fees-How Solicitors Fees Are Calculated in Ireland

solicitors-fees

Solicitors’ fees can generate a lot of anger and frustration for people trying to understand how legal fees are calculated.

Section 68 of the Solicitors (Amendment) Act of 1994 sets out how solicitors are permitted to charge for services provided to their clients.

S. 68 compels the solicitor to let the client know, in writing,

  • what are the actual charges he intends charging the client or
  • an estimate of the charges where the solicitor feels that it is not possible to calculate the actual charges or
  • the basis on which charges are to be made.

When the solicitor takes instructions from his client he is obliged to provide the information set out above in writing.

If the matter is a contentious one, then the solicitor is obliged to let his client know the circumstances in which the client may have to discharge the costs of the other party in the proceedings.

S. 68 also stipulates that a solicitor cannot charge a percentage of any damages or money received by the client with one exception-debt collection where the solicitor can charge on a percentage basis.

Generally a solicitor cannot make any deductions from any moneys received on behalf of his client, unless he has an agreement in writing with the client to do so.

This might occur to allow the solicitor to get a payment on account for example in circumstances where he has provided significant legal services and incurred outlays over what sometimes can be a long period of time.

Once the proceedings have concluded a solicitor must let the client have a bill of costs in writing which sets out the legal services provided, the amount of money recovered by way of damages or otherwise and an account of fees and outlays expended on behalf of the client.

If you as a client are unhappy with the bill you receive in respect of solicitors fees you are free to have the matter set down for taxation (this is a process where a Taxing Master will take a look at the bill of costs and decide on it’s fairness).

“Taxation” in this legal context had nothing to do with what most people think of as taxation-it is the legal term for assessing the bill of costs in terms of fairness and not being excessive.

You as a client also have the opportunity under section 9 of the Solicitors Amendment act 1994 to make a complaint to the Law Society of Ireland. The Law Society can then impose various sanctions if the complaint is upheld such as ordering a refund.

No Win No Fee Solicitors

A ‘no win no fee’ (also referred to as ‘no foal no fee’) solicitor will take on your case on the basis that if your case is unsuccessful, the solicitor will not charge you a fee for his services.

However, bear in mind that you will almost certainly be liable for the costs of the other party in the case.

If your litigation is successful, then your ‘no win no fee’ solicitor will be due his full solicitors fees.

But the good news is that most litigation cases are decided on a ‘winner takes all’ basis which means that the other side will almost certainly be ordered to pay all of your costs, expenses and outlays.

However if there is a deficiency between the costs you have incurred and the costs order made by the Court and you are out of pocket, you will be liable for these.

No win no fee cases are very common in personal injuries actions and legal proceedings for medical negligence. You can obtain a no win no fee arrangement in other types of cases also such as employment claims and general litigation.

However, the Solicitors (Advertising) Regulations 2002 restrict how solicitors can advertise, particularly in relation to personal injuries claims.

So, while it is perfectly acceptable for solicitors to provide legal services in contentious business (such as personal injuries, medical negligence, etc) in Ireland, solicitors are not permitted to advertise that fact.

Solicitors’ Fees

Solicitors’ fees are calculated taking into account a number of factors including

  • The complexity or urgency of the matter
  • The skill, labour, specialised knowledge and responsibility involved
  • The difficulty or novelty of the issues
  • The amount of value of any transaction
  • Time spent on the file
  • Which Court your case is pursued in.

For this reason, a solicitor cannot always give you an exact figure as to his legal fees at the outset.

Section 68 of the Solicitors (Amendment) Act, 1994 sets out how solicitors are permitted to charge for their services.

Prior to acting for a client, a solicitor is obliged to let you know in writing either

  • What his legal fees  will be or
  • An estimate of what his charges will be where he/she is unable to calculate exactly the actual charges or
  • The basis on which he/she will be charging you.

Why would a solicitor offer to act on a no win no fee basis?

Quite frankly, if he does not, perfectly good, reasonable, and just claims will not be pursued because the person who has been wronged simply cannot afford to pay up front for outlays, costs, solicitors’ time, necessary medical reports, professional reports, stamping fees, etc.

No foal no fee arrangements are common in medical negligence and persona injuries cases because some of these cases can be incredibly complex and continue for quite some time. If the plaintiff was funding this on a time/costs incurred basis, he/she would soon throw in the towel.

And with the insurance companies involved on the other side and who have the time and resources to outwait and outspend you, the ordinary citizen is facing a serious imbalance of resources.

And perhaps never take the case to begin with which would ensure a wrong suffered would go unpunished.

But the notion of solicitors working for nothing is, to put it mildly, fanciful.

For this reason, any solicitor willing to take on a case on a no win no fee basis will firstly look at the case very carefully and assess the likelihood of a successful claim. To do this he/she should meet you and go through the circumstances of your case very thoroughly.

He/she may also obtain an opinion from counsel (a barrister).

Then, and only then, will she decide whether to act for you or not.

Injuries Board Claims

If your claim is processed successfully through the Injuries Board and you are satisfied with the award made, then your solicitor’s fees will have to be discharged out of the award as the Injuries Board, unlike a Court, will not award legal costs.

However, they may make a small contribution towards your legal fees. The Injuries Board and/or the insurance company on the other side may also make a contribution towards your costs and outlays such as for medical reports.

If the sum awarded by the Injuries Board is rejected by you or the other party a letter of authorisation will be issued by the Injuries Board. This allows you to pursue your claim through the Courts by way of a personal injuries action.

If you subsequently win your case or it is settled and the sum awarded is greater than the initial assessment amount by the Injuries Board, you will almost certainly get an order for costs of your action against either the defendant or insurance company.

However, this order will not cover the solicitors’ fees and other costs incurred prior to the authorisation.

 

Note: In contentious business a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement.