Public Consultation Open for Feedback on Conditional Fee Agreements in Singapore

27 AUG 2019

27 Aug 2019 Posted in Press releases

  1. The Ministry of Law (MinLaw) launched a public consultation today to gather feedback on the proposed amendments to the Civil Law Act and the Legal Profession Act to allow for conditional fee agreements (CFAs) for prescribed categories of proceedings. The public consultation will run for 6 weeks from 27 August to 8 October 2019.

  2. A CFA is an additional payment option where a lawyer receives payment of his legal fees only where the claim is successful. Such payment may include an “uplift” or “success” fee, in addition to the lawyer’s standard legal fees. Traditional methods of payment will continue to be in place.

  3. CFAs are different from contingency fee arrangements, where in the event that the claim is successful, the lawyer shares in an agreed percentage of the sum successfully recovered by the client, with no direct correlation to the work done.

  4. Singapore law currently prohibits CFAs and contingency fee agreements. The prohibitions stem from our common law originally derived from England and Wales, to protect vulnerable litigants, and to guard against a potential conflict of interest for lawyers in relation to their duty to their clients, and to the Court.

  5. However, the prohibitions against CFA in England and Wales have been removed since 1990, and several other jurisdictions such as Australia, US and China also allow CFAs in various forms.

  6. In line with Singapore’s objectives to be a leading international legal hub, MinLaw proposes to introduce a framework for CFA in certain categories of proceedings.

  7. A separate study will be conducted on whether CFAs will promote access to justice for categories of proceedings that are presently not being considered under the CFA framework.

Key Features under Proposed Framework

  1. The proposed legislative amendments will enact a framework for CFA and is currently being considered for international and domestic arbitration proceedings, as well as certain prescribed proceedings in the Singapore International Commercial Court, including mediation proceedings arising out of or in any way connected with such proceedings.
  1. The proposed framework will be housed under a Civil Law (Amendment) Bill and will:
    1. Provide that in prescribed categories of dispute resolution proceedings, CFAs are not illegal and a solicitor who enters into a CFA with a client will not fall foul of the law.
    2. Provide safeguards which CFAs will be subject to.

Invitation for feedback

  1. Interested parties may view the public consultation paper online at https://www.mlaw.gov.sg/news/public-consultations/public-consultation-on-conditional-fee-agreements-in-singapore and submit feedback in electronic or hard copy form via either of the following:

Ministry of Law

Policy Advisory Division

100 High Street,

#08-02, The Treasury

Singapore 179464

Fax: 6332 8842

Email: MLAW_CFA_Consultation@mlaw.gov.sg (preferred mode)

Last updated on 27 Aug 2019