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Clients may now engage lawyers in Singapore under conditional fee agreements – Part Two

This is the second part of a two-part article on the recent law passed in Singapore on allowing conditional fee agreements. Basic information about CFAs such as what are CFAs and in what situations CFAs can be used in Singapore is contained in part one of this article. 

Ministry of Law in its press release in Nov 2021 which was issued in line with its introduction of the relevant Bill explained the reasons for initiating this change in Singapore law that now permits CFAs in certain situations:

  • CFAs will enhance access to justice especially for businesses and individuals who may otherwise not pursue meritorious claims;
  • CFAs may discourage lawyers from pursuing weak and frivolous claims since they risk receiving no or much lower fees if the claim is unsuccessful;
  • Singapore lawyers will be better able to compete with lawyers in other jurisdictions who are already able to offer CFAs to their clients. 

We must remember that a CFA is just a type of contract between the lawyer and his/her client regarding his/her fees. As such, CFAs must be in writing and signed by the client. 

CFAs are not intended to replace traditional fee structures. Fees charged under CFAs are still subject to professional conduct rules against overcharging.

CFAs also do not absolve a lawyer from his/her professional conduct obligations to the client such as, advising his client if there is a high likelihood of getting a greater sum of damages through litigation rather than accepting the settlement offer on the table. 

There will be safeguards that the Ministry of Law will introduce for the CFA framework via subsidiary legislation such as information that the lawyer must provide to his/her client before entering the CFA with the client, terms and conditions of a CFA etcetera. 

In a recent press article Mr. Tong was quoted as explaining that in Singapore as the CFAs do not apply to indigent litigants for now, there is no need to impose any limits on uplift fees but if the CFA framework is expanded to cover other types of cases beyond what is permissible now, this will be a fresh consideration which the Ministry of Law will review at the appropriate time. 

Read part one of this article which contains basic information about CFAs such as what are CFAs, who can use them and in what types of proceedings. 

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