Legal Fees question. Is the solicitor taking too much?

obviousTroll

First of all, this is an inquiry for a friend who is not in the country. He injured himself a few years ago at work, and made a claim to the company.

His solicitor paid for medical consultancy fees, as well as barrister fees. The case is now attempted to be settled out of court, and is offered €50,000 for the injury.

His solicitor told him that he would be taking €5,000 for his fees. Fair enough he thought, until we had a discussion about it and asked him if the fee offered was €50,000 plus legal fees. It turns out that this is the case. When my friend asked how much the solicitor was charging for the claim, the solicitor declined to give that information.

Using my google-fu, I read the information from the citizens information:
http://www.citizensinformation.ie/en/justice/civil_law/cost_of_the_case.html

The solicitor's fee can consist of the professional fee, miscellaneous charges (for example, phone calls) and charges from third parties, (for example, government agencies).Solicitors are not allowed to charge you on the basis of a percentage of any award or settlement of your case.

And

Usually if you win your case, most or all of your costs (including legal fees) will be paid for by the other party.

Now, I'm giving the benefit of the doubt, but isn't this a bit dodgy? Do these rules not apply due to it being an out of court settlement, even though the solicitors fees are being paid?

I'd be happy to clarify any questions that can help this. Many thanks.

Farcear

Usually if you win your case, most or all of your costs (including legal fees) will be paid for by the other party.

This happens because a judge, in court, makes an order saying you won and telling the other people to pay (most of) your legal fees.

However, in this case, the matter didn't go to court. The parties likely met on the steps of court and said: "Listen, I'll give you 50,000 and everyone will just pay their own solicitor."

Settlement figures usually include costs because it brings finality to the matter.

When my friend asked how much the solicitor was charging for the claim

I'm not sure what you mean by this.

obviousTroll

I'm not sure what you mean by this.

Thanks for responding Farcear.

What I meant was, my friend (we will call J) was told that the settlement would be the €50,000, plus the cost of legal fees. When J asked his solicitor what he would be adding to the claim as his legal fee, the solicitor declined to give the information. In other words, the payment will be €50k + X, where X is the solcitor's legal fees. J does not know what the figure X is, and why he has to pay €5,000 in fees from his settlement.

It might also be worth mentioning that the claim has not been processed yet. The defendant has just made this offer. It has not been agreed upon yet. He also has the option of going to court if he wishes, but neither side wants that.

If the solicitor deserves the money, then fair play, and job well done, but the secrecy of the matter is the problem. J was originally told that the defendant was only going to pay the €50k, so the €5k fee was acceptable. It wasn't until he asked yesterday why the defendant was not paying the legal fees of J, the solicitor replied that the defendant was actually paying the legal fees, but he was still to pay the €5k cost also.


Hope I made myself a little clearer.

johnnyskeleton

My advice is don't go messing with your friends business he/she won't thank you. Let them sort it out with the solicitor or speak to the law society or whatever if they are not happy with the answers.

JD Dublin

If I am settling a case like this, I have a budget. Lets say the budget is 70,000. Do I care who gets the 70,000 the solicitor or the person who suffers the injury? Not really.

Now OP if the injured party your friend does not know how much the solicitor is getting paid, then he does not know the overall budget and whether he as the injured party is getting a large share or a slightly smaller share.

This is why the solicitor is being coy about telling the injured party his fees.

Bearing in mind that the injured party's solicitor is doing all the negotiating, on the settlement, you can be bloody sure that the solicitor for the injured party is not getting 1,000 from the settlement, plus 5,000 from the injured party. He's possibly getting 10,000.

Your friend should get the inside track on the negotiations to find out what the person settling thi claim has in their budget, and basically try to grab more of it for himself. I'm making the assumption that the solicitor is grabbing a good slice of the pie, as he is being shy about telling the injured party the actual fees.

Maybe one of our legal boardies will tell us what principle is involved in keeping the injured party in the dark ( if there is a reason to keep the fees secret).

McCrack

There is no reason to keep professional fees and outlays incurred on a file secret from the client in an all-in settlement or plus-costs settlement, in fact the client is entitled to see the matter ledger showing all transactions on his/her file including agency fees (barristers for example).

It annoys me to hear this carry-on from some practitioners. I would suggest the OP insists on having a breakdown on the fees and charges and if the solicitor refuses, contact the Law Society for advice.

obviousTroll

Sorry that I am researching this for a friend, and he is not doing it himself. As I say, he is no longer in the country, and contacted me as I am a trusted friend. He is not Irish, and was unclear with the normal procedures of Irish law.

McCrack wrote: »

There is no reason to keep professional fees and outlays incurred on a file secret from the client in an all-in settlement or plus-costs settlement, in fact the client is entitled to see the matter ledger showing all transactions on his/her file including agency fees (barristers for example).

It annoys me to hear this carry-on from some practitioners. I would suggest the OP insists on having a breakdown on the fees and charges and if the solicitor refuses, contact the Law Society for advice.

This was my thoughts exactly, but I was wary to suggest that there may be something dodgy afoot, hence the reason for posting here. The law is clear for court settlements, but I could not find as much data for out of court settlements. 24 hours have passed since my first post, so I'll update you.

I told J to demand a breakdown of fees from the solicitor. I have read somewhere online that the solicitor cannot take a cut of the award unless written permission is given by J. If there is any delay with the proceedings, that he is to contact the Law Society without delay.


Thank you everybody for your insights and opinions.

thebiglad

Doubt €50k was accepted as costs inclusive as if so a professional fee of 10% would be extremely light - if it was costs inclusive and your friend is only being asked for €5k (which would include VAT chargeable on fees) then he is doing extremely well.

More likely the Solicitor is also charging the insurance company settling the claim.

At the outset of the dealings with the solicitor he should have set out his expected fees and methods of charging etc - at this point he should have mentioned intention to keep a portion of the settlement.

It is a matter to discuss with the Law Society if he will not disclose whether he is being paid by the responsible parties insurer.

McCrack

I don't know if there is anything untoward going on with this particular solicitor and I would not suggest anybody assumes there is, it's just some solicitors keep file transactions away from the client when in fact it's the client's entitlement to see the matter ledger as it's their file.

To clarify also, there are Law Society audits/spot-checks and there is the necessity for an annual independent accountant's reports on all law firms so solicitors are always under scrutiny with their accounts.

JD Dublin

McCrack wrote: »

I don't know if there is anything untoward going on with this particular solicitor and I would not suggest anybody assumes there is, it's just some solicitors keep file transactions away from the client when in fact it's the client's entitlement to see the matter ledger as it's their file.

To clarify also, there are Law Society audits/spot-checks and there is the necessity for an annual independent accountant's reports on all law firms so solicitors are always under scrutiny with their accounts.

Yes agreed - to be fair most lay people ( including me ) would not know that a client is entitled to see their file. I understand the scrutiny that solicitors are under from all angles. From a previous poster, maybe 5,000 is light in relation to a claim like this, but from what has been posted here up to this, it appears that the injured party is being ( wrongly ) kept in the dark about some aspects of the financial aspects of his case.

obviousTroll

JD Dublin wrote: »

Yes agreed - to be fair most lay people ( including me ) would not know that a client is entitled to see their file. I understand the scrutiny that solicitors are under from all angles. From a previous poster, maybe 5,000 is light in relation to a claim like this, but from what has been posted here up to this, it appears that the injured party is being ( wrongly ) kept in the dark about some aspects of the financial aspects of his case.

Yes, this is the primary reason of the post. The amount awarded to the solicitor isn't a problem. The shadyness of the lack of financial information was the big alarm bell. The second was the cut to be taken from the claim, even though he will be awarded legal fees on top of the €50k. I've gotten some great clarity with the posts. It very well may be an innocent reason as to why he is not handing over the financial info. Time will tell.

I will happily update you all when I hear of any updates. Thanks again.