When fee guidelines were introduced in 2003, they pointed to legal payments of up to approximately 30 percent less for the transfer of title in property transactions. Some attorneys then began undercutting each other as they looked for business.
However, lawyers will soon no longer be compelled by the conveyancing guidelines. The Law Society stated yesterday that it would scrap the said guidelines for all transactions that were entered on or after 1 October. According to the society, the move is part of its ongoing review.
In a statement, it said, "As the Council (of the Law Society) believes that all fees should be freely negotiated between solicitors and their clients without guidelines from the Council (other than statutory guidelines); there is no reason to treat fees for conveyancing transactions differently".
The said fee guidelines for the conveyance of property titles were introduced last February of 2003 after the scale fees were abolished. These guidelines involved agreement on a set fee, which is based on the value of the transaction made.
With these guidelines, a property worth $1 million would incur a conveyancing fee of $4,700 during that time, if the lawyer also acted on behalf of the buyer, mortgagor, mortgagee, and the CPF board and members.
The Law Society stated that even though the guidelines were removed, the public must be aware that any lawyer has a ‘fundamental ethical obligation’, which means that lawyers must be charged fairly for their work.
The society is not the first professional organisation to scrap these fee guidelines. The Singapore Medical Association (SMA) also removed, last 2007, its 20-year-old fee guidelines after concerns came up that it could possibly violate the Competition Act. The act was enforced a year before.
Since then, several professional bodies, like the Singapore Institute of Architects (SIA), also made a review of their rules.
A study by the Competition Commission of Singapore about doctors’ fee guidelines is now in progress after concern arises that it is not realistic for patients to be expected to shop around and to compare prices.