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Thursday 22nd October 2020
Home Legal Matters Corrupt lawyers continue to plunder estates

Corrupt lawyers continue to plunder estates

CORRUPT lawyers continue to plunder the estates of their deceased clients by calculating their fees for administering estates on the Cyprus Bar Association’s ‘Minimum Fee Regulations’, which were abolished in 2018.

My suspicions were raised when I received a number of emails from co-executors and beneficiaries of deceased family members whose corrupt lawyers had asked them to obtain valuations of the deceased’s estate.

For readers who may be unaware of this change in the law, lawyers used to face penalties, including being struck of the register, if they failed to charge the minimum fees dictated by the Cyprus Bar Association for out-of-court work.

The typical minimum fee for administering an estate would be 7% or more of the value of the estate. This was a huge amount in cases where the estate comprised one or more properties.

Legal challenge to the European Commission

Following a successful challenge by ‘Fairness in Fees‘ to the European Commission, infringement proceedings were started against Cyprus for failing to comply with their obligations under EU law.

In November 2018, the Commission closed infringement proceedings against Cyprus, announcing that:

“The European Commission decided today to close infringement proceedings against Cyprus concerning a minimum fee scale for out-of-court legal work, such as the drawing up of wills, contracts, the administration of estates and the registration of companies.

“EU law requires Member States to refrain from encouraging undertakings or associations of undertakings to favour or encourage anti-competitive behaviour that would breach Article 101 of the Treaty on the functioning of the European Union.

“In April 2018, the Commission raised concerns with the Cypriot authorities that certain legislative provisions, by empowering the Cyprus Bar Association to adopt a minimum fee scale for out-of-court work, encouraged behaviour that could prevent, restrict or distort competition within the EU’s Single Market.

“In response to the concerns raised, Cyprus has amended its law. The Commission welcomes the new legislation, which removes the specific provision empowering the Cyprus Bar Association to set these fees.

“In parallel, the Commission today also closed an antitrust investigation into the minimum fee scale adopted by the Cyprus Bar Association, based on the empowerment contained in the national legislation.

“The Commission welcomes the decision of the Cyprus Bar Association to abrogate this minimum fee scale after the Commission raised concerns that these rules were not compatible with Article 101 of the Treaty on the Functioning of the EU.

“The Commission’s intervention means that lawyers can now freely determine their fees when providing out-of-court legal services and that citizens will benefit from more competitive prices in this sector.”

However, despite the European Commission’s infringement proceedings, a change in the law and the repeal of the minimum fees, corrupt lawyers continue to plunder the estates of their deceased clients.

Recommendations

It is essential that 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. 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 for undertaking this task is written into their Will.

8 COMMENTS

  1. Hi all

    Fairness In Fees is pursuing this matter vigorously, having initiated a formal submission to the EC. As Nigel explained, following that submission, the Republic of Cyprus Parliament abrogated the Minimum Fee Regulations. Robert O’Donoghue QC of Brick Court Chambers in London has issued legal opinion on this matter – he is a top Competition QC. In his legal opinion such fees are unlawful, null and void and such fees are reimbursable. We also have such legal opinion from a top Cypriot legal firm. Claiming reimbursement is practically difficult – but our campaign for damages is actually just about now entering stage 2. In addition, we are now challenging in court fees. Please have a look at the website. Any assistance and evidence is appreciated. We have to stop this practice. Cyprus is a member of the EU and must abide by Article 101 of the EU. Please note we do not provide legal advice as you will appreciate.

  2. Geoffrey,

    If depends on what you mean by a divorce case.

    The regulations posted by Nigel refer to out of court work (non litigation) which have now been revoked.

    If the fees charged are based on out of court work – eg review / negotiation of a matrimonial property settlement agreement – then the lawyer is not entitled to claim fees based on the revoked minimum fee charges. He is however entitled to claim fees which have been agreed fees or failing this reasonable fees.

    If however the legal fees relate to litigation matters then the situation is different. From the information provided it appears to be the former.

  3. A neighbour in Cyprus has just passed but 3 weeks prior to that they sold their Cyprus property with a view to purchasing a smaller one. Does she have to use a Cyprus solicitor to handle things regarding her estate. Their will was written in the UK and was simple. If one goes before the other everything would be passed onto the remaining person. That person would also be appointed executor. The banks allowed her to pay for the funeral but will only allow her €30 per day out of the €280.000 that is in the joint account. She needs pointing in the right direction. They were classed as residential. Can anybody help

    • She will hve to use a lawyer in Cyprus to submit an application for grant of probate. As the will was written in the UK it has to go through a process known as resealing, which means it could take a year before a grant of probate is issued.

      It would be easier to look into this if the widow contacts me directly. Do you know the executors are?

    • She doesn’t have to use a Cypriot lawyer to sort the estate, but since the process is entirley in Greek, it’s likley that it would be approriate to do so. Talk to at least 3 lawyers, ask them for a fixed price to do the work, tell them that you are visiting other lawyers for quotes. Walk away from anyone who says that what you are asking for is too difficult.

      The fact that the Will was witten in the UK is good news and bad news. The good news is that it won’t have appointed a Cypriot lawyer as the executor, enabling him/her to plunder the estate with limitless fees. The bad news is that the Will is unlikely to contain an opt out of Cypriot inheritance laws which determine that certain relatives are entitled to a share of the estate along with the beneficiary of the Will. This is not unresolvable but can get messy.

      If the deceased had little or no UK estate, then the UK Will can be presented for Probate in Cyprus without the resealing process.

  4. Do I take it this applies in Divorce cases too? Logically it must. Im just looking at a case where a Cypriot Solicitor has asked for a “standard fee” based on an equation whereby the couple divorcing agreed a division of some properties. The Lawyer simply approved the agreement drawn up by the opposing Solicitor, but wants 5000 euros for this as the property values in the agreement are of a value that his “Standard Fee” equation shows this sum as due. 5000 for maybe an hours work seems excessive.

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