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Lawyers’ price-fixing challenged in EC

A formal complaint concerning price-fixing of lawyers’ fees in Cyprus has been submitted to the European Commission on behalf of George Lambis – a Greek Cypriot and the Financial Director of a national charity in the UK.

Lawyers price-fixing challenged in EC‘FAIRNESS IN FEES’ a London-based organisation founded by Greek Cypriot George Lambis has submitted a formal complaint to the European Commission concerning alleged price-fixing by the Cyprus Bar Association (CBA).

The complaint, which was submitted on behalf of Fairness in Fees by Hugh Barrett of BPE Solicitors LLP and by high level Counsel specialising in EU Competition Law Robert O’Donoghue and Tom Pascoe of Brick Court Chambers, has been accepted by the Commission; we anticipate a ruling on the matter in a few months.

The CBA mandates the minimum fees for out of court work, which includes powers of attorney, property transactions and the administration of estates. Membership of the CBA is mandatory for all lawyers practicing in Cyprus – and if a lawyer fails to comply with the Advocate’s Law they may be stuck off, suspended, or fined.

(It is also worth noting that if the lawyer and client are married or close relatives – or if the lawyer’s client is another lawyer, the lawyer is exempted from charging the ‘minimum fees’.)

In Counsel’s opinion the fee regulations clearly breach European law, and in particular the provisions of Article 101 of the European Treaty, which specifically prohibits “directly or indirectly fix purchase or selling prices or any other trading conditions”.

In response to the price-fixing complaint, the European Union has the power to:

  1. declare excessive fees calculated under the fee regulations to be unlawful,
  2. fine the Cyprus Bar Association up to 10% of its annual income and require it to cease any future action to fix or control fees charged by lawyers.
  3. provide the basis for private recovery actions in the Courts by overcharged clients.

Legal precedents

Commission condemns Belgian architects’ fee system

The scale of lawyers’ minimum fees in Italy constitutes a restriction on the freedom to provide service

Further reading

Legal fees and the free market by Jonathan Goldsmith former Secretary General of the Council of Bars and Law Societies of the European Union 2001-2014

Readers' comments

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  • MARTIN STEPHENS says:

    Hi. I am currently in the process of changing the names on the deeds on my house just outside Larnaca. I have obtained a power of Attorney which I am waiting for its return from the high commission of Cyprus. In the meantime I have been presented with a total bill of 2000 euros plus 19% VAT. and out of pocket expenses of 1000 euros.

    This make a total of 3480 Euros.

    I think this might fall within the term “excessive fees” could you please let me have some more information on this please.

    (Ed: If you consider that your lawyer’s bill is excessive you should complain to the Cyprus Bar Association. See Excessive Fees for more information.

    This complaint to the European Commission contests that the minimum fees dicted by the Cyprus Bar Association is in breach of European Law.)

  • George Lambis says:

    After obtaining expert legal advice and top level Counsel Opinion a document (called a Complaint) was submitted to the European Commission on 24th February 2016.

    At the moment it is almost impossible to mount a legal case challenging the practice of lawyers’ minimum fees in the Cyprus district courts. This is because local legislation allows such a practice. So it looks as if one has to challenge the Republic’s constitution, potentially in the Supreme Court. This is a very expensive process.

    However, European legislation does not allow such anti-competitive practices and Cyprus is a member of the EU. European legislation overrides local legislation. No Supreme Court challenge should therefore be necessary – Cyprus simply needs to apply EU legislation. A favourable decision to the lodged Complaint will potentially allow anyone who has been overcharged to claim reimbursement of overcharged legal fees.

    Fairness In Fees Limited has lodged the Complaint. Further details can be found on http://www.fairnessinfeescyprus.com

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

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