- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

Lawyers’ price-fixing challenged in EC

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