El blog de Maria

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Legal tip 261. No win no fee and specialization
Thursday, April 22, 2010 @ 5:46 PM

This issue has been treated before in this blog and I have my particualr opinion that a full no win-no fee is impossible and even unfair towards the lawyer who needs to bear with work and study efforts, staff expenses, office maintenance...

But let me show you again today the " status quo" on the legal character of the "no win-no fee" agreement for Spanish Lawyers.

In 2002 the Court for Fair Competition (TDC) sanctioned with a fine of 180,000 euros to the Spanish Law Society and ordered to amend the prohibition established in its Code of Ethics for lawyers for these professionals to “freely” establish with their customers the prices for their services. The TDC was thus giving the reason to the lawyer José Luis Mazon, who considered that the ban on so-called "contingency fees" or “no win, no fee” was against free competition. Mazon had filed a complaint against the Law Society for a conduct "allegedly prohibited" by the Law on Competition.

The Supreme Court, in November 2008, stated that the prohibition of the “no win, no fee” " is diametrically opposed to the provisions of Article 1.1.a) of the Law on Competition which prohibits direct or indirect fixing of prices as well as other commercial or service conditions." So the Supreme Court declared in 2008 that the no win-no fee agreement is legal for lawyers in Spain.

For those cases of our specialisation, where study for one benefits all the other cases ( Real Estate Consumers Law), we can offer our clients what we consider fair to the two parties: lawyer and client: a partial no win-no fee agreement. This way we charge an intial provision of funds and nothing else is charged to the client till the result is achieved.

I do think that (1) the possibility of legal online services, which is being consolidated by both the coming new rules for lawyers in Spain by the Law Society, and (2) the fact that we can work nationwide, is driving the proffesion to definite specialisation.

And I do think that specialisation is good for the development and accuracy of the legal system. We lawyers are legal solutions providers.

Also.. specialisation and nationwide pratises open the possibilities for more reasonable feeing. That´s is exactly why we can offer the partial no win, no fee.

Anyways... it is a very much a controversial matter.

Best regards,

Maria

"Duna", Beach of Valdevaqueros - Tarifa (Cadiz); by Chodaboy, at flickr.com

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7 Comments

interested said:
Thursday, April 22, 2010 @ 11:28 PM

what percentage would you charge if there is a successful outcome to a litigation matter? if there is an unsuccessful outcome, would you charge anything else other than the initial provision of funds?

Maria said:
Friday, April 23, 2010 @ 8:17 AM

5% is provision of funds.
Fee if success is of around other 5% but that is generally imposed on the loser part, so you will end up being paid back even the provision of funds that. Nothing else if we lose

Danny Carrigan said:
Wednesday, May 5, 2010 @ 1:48 PM

You do not spell out what the initial 5% is.Is it 5% of the deposit if one is looking to recover a deposit for example?i.e.5% of 100thousand euros if that is the deposit one is trying to recover.
One of the major advantages of a no win no fee system is that the lawyer bears the risk/cost of losing and therefore is likely not to pursue a case he/she believes to be unlikely to win.In that sense it gives the customer a strong indication of the strength of the case which I believe to be useful as customers/consumers are often too emotionally involved to see things objectively and are also often encouraged by lawyers who are motivated by the prospect of fees.Legal companies are businesses who are involved in profit-making after all.

Maria said:
Wednesday, May 5, 2010 @ 1:52 PM

Yes, it is 5% of the deposit you are trying to recover. No interests included.
Best,
Maria

Jan said:
Wednesday, May 5, 2010 @ 4:10 PM

Ha!

We were owed 9,000 euros by small developer, he even had issued us with a cheque, that bounced.
We don’t believe in throwing good money after bad, and we have no faith in the Spanish legal system. Somebody gave us the name of “no win no fee lawyers”. They wanted 10% if successful. Fine, they need our paper work and our power of attorney.
They put pressure on the guy and found that he owned land and wanted to take him to court and put a claim on the land. They said that it would cost us 400euros to employ “Procuradora” to go to court
We were very clear that we did not want to take any further and wanted to walk away. They said that they was a good chance that they would be successful, but no! we did not want to go ahead. OK they said they would pay the 400 euro but we had to sign new contract giving them 20% of any recovered money. We were fine with this.
The Procuradora sent us a bill for the 400 and we rang explained our arrangement and said send a bill to them.
A year went by, then out of the blue we had a embargo on our bank account for non payment of the Procuradora. It was for the original 400 plus another 400 for work done that we never knew about.
We went to see the Procuradora, who we had to pay 800euros . She was unsympathetic, but agreed to invoice us directly if she did any work for us in future. We don’t want her to do any more work, but we are not employing her, it is the “no win no fee” lawyers using our power of attorney. We can not stop our power of attorney because then the in “no win, no fee” lawyers can charge us thousands in fees and for breach of contract.

What do we do? We don’t want anything, just want it to stop!

NEVER SIGN OVER POWER OF ATERNORNY, NO MATTER WHAT CONTRACT!

Maria said:
Wednesday, May 5, 2010 @ 4:56 PM

What is the status of the case now?

Jan said:
Wednesday, May 5, 2010 @ 5:31 PM

They want the court to sell the land, we will have to pay Tasador (land valuation ) plus Procuradora and whatever. The land is not worth it, its all a waste of time. The worring thing is that this guy owns hundreds of these bits of land.

The work they are doing is correct, we just do not want them to do it, and can not stop them.

Cheers Jan

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Maria
Lawyer. Director of the Costaluz Lawyers team. Useful legal tips for an easy way in Spain. www.costaluzlawyers.es

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