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Lawyers minimum fees in the bin

The Cyprus Bar Association has been forced to repeal rules that required lawyers to charge prescribed minimum fees for their out-of-court work rather than competing against each other on price.

Cyprus lawyers minimum fees in the binFOLLOWING a successful complaint to the European Commission by Fairness in Fees, the law requiring Cyprus lawyers to charge clients according to the Minimum Fee Regulations has been revised and the Minimum Fee Regulations abolished.

An extraordinary meeting was held on the 19th June 2018 at which the Cyprus Bar Association (CBA) decided to abolish the Minimum Fee Regulations immediately in their entirety, which included fees relating to the provision of out-of-court-cases.

In addition, Cyprus amended Article 24(1)(k) of the Advocates’ Law that empowered the CBA to “fix lawyers fees for out-of-court cases”.

The amended article now reads observing the principles of free and fair competition, to regulate the way and procedure for resolving disputes arising in relation to lawyer’s remuneration for out-of-court cases.

What the papers said

Although this impending change in the law was reported in the Greek newspaper Phileleftheros and in-Cyprus.com both reports grossly understated/misrepresented it’s significance. I.e:

“The lawyer’s minimum wage is determined according to time spent and the location (in or out of the office) of these meetings. Lawyers may claim travel fees if these meetings take place outside the city where their law office is located.”

The reality

The now defunct Minimum Fee Regulations for out-of-court-cases fixed vast swathes of fees including such things as:

  • Drawing up contracts of any nature including: Wills, Deeds of Gift, Powers of Attorney and bills of exchange. (Based on mathematical formulae relating to their values and bearing no relationship to the work done.)
  • Registering limited companies
  • Trademarks
  • Filing a business name and patent
  • Administration of estates (fees that bore no relationship to the work done as they were effectively a fixed proportion of the value of the estate.)

Any lawyer who failed to charge clients according to the Minimum Fee Regulations faced disciplinary action by the CBA including being struck-off!

Robert O’Donoghue QC of Brick Court Chambers in London, who was instrumental in lodging the Fairness in Fees complaint with the European Commission has published an article on the subject – Cyprus lawyers forced to abandon minimum fees.

Free competition now rules!

Now that the Minimum Fee Regulations have been consigned to the litter bin, anyone wishing to engage the services of a lawyer in Cyprus to draw up their Will, act as their Power of Attorney, administer their estate, etc., etc. can shop around and get competitive written quotations for the work.

It is also vital that if the work involves the administration of the estate the agreed fee is written into the Will.

Fairness in Fees

Fairness in Fees are considering their next steps. For further information contact Fairness in Fees.

Readers' comments

Comments on this article are no longer being accepted.

  • Peter Howard says:

    I am an Estate Agent in the Polis area and would like to reply to the comments made about extortionate fees of 5%. I have also sold property in USA, Spain and Portugal where the standard fees are 5% and in France often 10%.

    In the UK fees are lower and often 1.5%, but house prices in the UK are usually at least twice the price of Cyprus and often more. The normal selling time in the UK is about two months whereas here in Cyprus it is quite common to list a property for two years before a sale is achieved. Therefore over a period of a year the UK estate agent will probably achieve a higher income than here in Cyprus.

    It should also be remembered that the marketing of a property in Cyprus is totally different. Advertise a property in England, and a potential buyer will probably drive up at the weekend and look at the property. Our normal time frame is three months from an inquiry until they visit Cyprus, and all this time wanting more information – once here a potential buyer will want to tour the different areas, take them to meet different Independent Lawyers, and a whole range of other services. Once a property is sold, we are still on call to provide information on electric, property improvements, and a whole host of other services that are not necessary in England. For our commission we provide a great value service.

    Regarding the real estate cartel – I agree with this. Under EU law I can sell property here in Cyprus, but under Cyprus Law I need to be licensed and not normally available to people who are not Cypriot. I have challenged this in the Supreme Court and not made progress – so I now have to work with a Cypriot Licensed agent and pay him 10% of any commission that we receive.

    Regarding commission rates, and marketing – all agents are different. On lower priced properties where the owner lists with many agents we charge 5% however for most of the properties that we list, our charges are 4% and on high priced properties we will negotiate the fees. On marketing, many agents just take a quick photo with a mobile phone – we take professional pictures, prepare floor plans, a video of a property, and a 3D tour – each property that we market takes one day to prepare all the information.

    PLEASE do not package all estate agents together, some of us work very hard on behalf of our clients – and our commission is well earnt.

  • Pippa says:

    Unfortunately as I am having to advertise and (hopefully eventually sell my property) for a lots less than it was bought there will be no capital gains!

    Ed: I know it will be of little comfort but there are many in the same position as yourself. Property prices in some areas are taking a long time to recover after the property bubble burst.

  • Pippa says:

    Having paid recently for probate in both Cyprus, over £6000 and UK, which was much more complicated £2600, this law is well over due to be ditched. Now as the previous comments mention how about estates Agents fees?

    Ed: Estate Agents typically charge 5% (+VAT) of the price achieved at sale. Some agents charge 4% +VAT – and it’s always possible to negotiate a lower figure. Futhermore, if you use a registered estate agent you can use their fees to reduce your Capital Gains Tax liability.

  • Richard Daly says:

    Prior to emigrating to Cyprus we sold our property at an agreed fixed sum with an internet based, who were excellent. Having now sold 2 properties here we feel that the Agents have milked us and done very little and the charge was 15 times more than England based fee!

    The sooner Estate Agents here are forced to abandon Cartel arrangements the better for all concerned and l believe it will create a more buoyant market for everyone.

  • Costas Apacket says:

    Excellent news, well done to fairness in fees.

    Now what about the Estate Agents cartel, charging 5% of the sale price of a property, irrespective of the amount this is.

    Ed: Not all estate agents charge 5% – there’s one who comments here occasionally who charges 4%. But in any event you can negotiate.

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