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Lawyers’ price-fixing challenge success

The complaint by ‘Fairness in Fees’ to the European Commission challenging price-fixing by the Cyprus Bar Association (CBA) has been successful; their minimum fee regulations will soon be consigned to the bin.

Cyprus lawyers' price-fixing challenge successfulTHE MINIMUM fee regulations for lawyers in Cyprus, which are set by the Cyprus Bar Association (CBA), will soon be a thing of the past thanks to a successful challenge by ‘Fairness in Fees‘, a London-based organisation founded by Greek Cypriot George Lambis, which submitted a formal complaint to the European Commission in 2016.

Fairness in Fees claimed that the rules mandating the minimum lawyers can charge for out-of-court cases were in clear breach of the price-fixing and cartel provisions of Article 101 of the European Treaty and therefore of European law.

The European Commission has upheld their complaint, which has forced the Ministry of Justice to submit a bill to parliament abolishing the power of the CBA to set minimum fees for out of court work.

The soon-to-be-abolished minimum fee regulations set out formulas for calculating lawyers’ fees irrespective of the time spent on the matter or the complexity of the case.

Under the regulations, a straightforward out-of-court execution of a will in which property of €1 million is to be distributed among the beneficiaries would incur €56,000 in legal fees. Similar work in the UK, for example, would likely incur no more than €5,000 in fees.

The bill should be discussed at the next plenary session of parliament; it will replace the minimum fee regulations with the power to regulate the manner and procedure for resolving any disputes arising with regard to lawyers’ fees for out-of-court work.

The changes must be implemented as the Commission will start infringement proceeding against the Republic of Cyprus, which could result in the EU Court of Justice imposing substantial fines on the Cypriot state if it fails to act.

It’s also worth noting that there is no upper limit on the amount lawyers charge for out-of-court work. This enables disreputable lawyers to plunder estates when executing wills. In one case brought to my attention beneficiaries who were left three apartments in their aunt’s will had to give one of the apartments to a lawyer who was appointed to act as the executor of her estate.

Anyone wishing to appoint a lawyer as the executor of their estate MUST AGREE THEIR LAWYER’S FEES beforehand and have these written into their will to avoid the risk of their estate being plundered.

Readers' comments

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  • Nick says:

    Good on George Lambis to undertake such a task.

    I am afraid that there are to many MPs in the Cyprus government that are lawyers and they protect themselves by implimnating laws such as minium fees. As MPs they should be safeguarding the public by implementing maximium fees for lawyers on certain matters.

  • Kate says:

    My recent experience with Estate agents in Cyprus was very much an eye opener. In brief, I was expected to sign an Estate Agents agreement which basically meant I would be handing over complete control of the sale of my house to the agent who would decide what the selling price should be. I would be expected to leave my home when a prospective buyer views, I would not meet a buyer or speak to a buyer, nor would I know who the buyer is. The estate agent contract would be sole agency for a period of one year automatically renewed by the agent for a further three years, unless the agent receives a registered letter from the vendor asking not to renew the contract, not to mention the fact that should I for any reason refuse an offer for the asking price the agent will bill me for his agency fee of 5% …and wait, should I change my mind about selling my house at any time for any reason during the contracted time, with or without a single viewing, I would be expected to pay more than €2000 in costs! All of the above is non negotiable.

    Would I ever know if more than one buyer was interested? Is it unthinkable that a buyer might do a deal with the agent to get the price as low as possible, would the buyer know for sure if the so-called lower price wasn’t the actual price in the beginning, after all, how would anyone know?

    Staff, advertising, vehicles and premises are all part of the costs of running any business and is tax deductible. My Agents fee (if I were to use an agent), of course is tax deductible (CGT) could that be why agents fees are so high?

    More and more Vendors are successfully advertising their properties themselves. They have open house viewings with coffee and cake or Champagne cocktails by invitation. Agents aren’t the only ones who can find worldwide contacts! Vendors can negotiate with prospective buyers with mutually acceptable outcomes. At least then, vendor and buyer know exactly where they stand…

    …sorry, not so brief.

  • scott says:

    Do not use a Cypriot lawyer as the executor of your will simple as that, they are not needed.

  • Peter Davis says:

    @ Cousin Jack,

    You also have to appreciate that Estate Agents in Cyprus and the UK have similar expenses in overhead costs – such as staff, advertising, premises, fixed items such as vehicles, but the UK Estate Agents are way ahead in sales in comparison to his Cyprus cousin.

  • Cousin Jack says:

    Perhaps the obscenely high commissions charged by “estate agents” might also be placed under scrutiny.

    5% (+VAT) in Cyprus compared with 1%, sometimes less, (+VAT) in UK.

    Ed: Estate agent commissions are not regulated and you will find some of them charge less than 5%. And the market for property in Cyprus is vastly lower than the UK.

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