NATIONAL LAW UNIVERSITY, ODISHA

SEM X YEAR V

LAW AND ETHICS PROJECT

LAWYER’S FEE: WHETHER IT FALLS UNDER THE PARADIGM OF

PROFESSIONAL ETHICS

SUBMITTED BY:

Divyanshu Jain (2015/BA LL.B./020)

J Shivam Kumar (2015/BA LL.B./022)

Nikhil (2015/BA LL.B./028)

 TABLE OF CONTENTS

Table of Authorities ..........................................................................................................................2

Research Methodology .....................................................................................................................5

Introduction ......................................................................................................................................6

Lawyer’s fee: Whether it falls under the paradigm of Professional Ethics ......................................7

Chapter I: Indian Law pertaining to it...........................................................................................7

1. Pre- Independence ................................................................................................................7

2. Post- Independence ..............................................................................................................8

Advocate’s Act of 1961 ................................................................................................................8

Bar Council of India Rules: ..........................................................................................................9

Chapter II: Case laws ..................................................................................................................10

Chapter III: Comparison between the laws prevailing in other countries ..................................12

1. In the United States-...........................................................................................................12

2. In the United Kingdom- .....................................................................................................13

Chapter IV: Contingency Fee Agreement and Work on Contingency Basis..............................14

1. Need for standardization ....................................................................................................16

Conclusion ......................................................................................................................................18

PAGE 2
 TABLE OF AUTHORITIES

CASES

Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S.240 (1975). .................................. 12

Bar Council of Maharashtra v. M.V. Dabholkar 1976 AIR 242. ................................................. 10

Ganga Ram v. Devi Das, AIR 1984 Raj 98 .................................................................................. 14

M.P. Vashi v. Union of India W.P.(C) No.632 of 2011 ................................................................ 10

O.P Sharma v. High Court of Punjab and Haryana, (2011) 6 SCC 86. ...................................... 10

Supreme Court Bar Association v. Union of India, (1998) 4 SCC 409. ....................................... 10

Vishakha v. State of Rajasthan, (1997) 6 SCC 24. ....................................................................... 11

STATUTES

ADVOCATES ACT, 1961. .................................................................................................................. 8

Conditional Fee Agreement Regulations Act 2000

http://legislation.data.gov.uk/uksi/2000/692/made/data.htm?wrap=true last accessed on
12.02.2020................................................................................................................................. 13

INDIAN BAR COUNCILS ACT, 1926. ................................................................................................. 8

Inserted by Act 60 of 1973 w.e.f. 31.01.1974................................................................................. 9

LEGAL PRACTITIONERS ACT. ........................................................................................................... 8

Section 27, Access to Justice Act 1999,available at

http://www.legislation.gov.uk/ukpga/1999/22/contents last accessed on 12.02.2020.............. 13

PAGE 3
SECTION 34, ADVOCATES ACT, 1961. .............................................................................................. 9
SECTION 35(1), ADVOCATES ACT, 1961 .......................................................................................... 9

SECTION 49 (1) (C), ADVOCATES ACT, 1961. ................................................................................... 9

SECTION 49 (1) (g), ADVOCATES ACT, 1961. ................................................................................... 9

Section 58, Courts and Legal Services Act 1990, available at

http://www.legislation.gov.uk/ukpga/1990/41/contents last accessed on 12.02.20.................. 13

RULES

BAR COUNCIL OF INDIA RULES ........................................................................................................ 9

Bar Council of India Rules: Part VI, Chapter II, Section II, Rule 20 ........................................... 14

Rule 1.5(d) of the Model Rules of Professional Conduct

http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_
professional_conduct/rule_1_5_fees.html accessed on 12.02.2020. ........................................ 12

CONSTITUTIONAL PROVISIONS

Art. 225, Constitution of India ...................................................................................................... 16

BLOGS

Should Indian Lawyers be Allowed To Work On Contingency Basis, Mowing The Law, (Dec. 9,
2012), available at http://mowingthelaw.blogspot.com/2012/12/should-indian-lawyers-be-
allowed-to.html last accessed on 12.02.2020. ........................................................................... 14

NEWSPAPER ARTICLE

Kaleeswaram Raj, Fair Advocacy as a Right, The Hindu (Mar. 27, 2014), available at
http://www.thehindu.com/opinion/lead/fair-advocacy-as-a-right/article5836221.ece last
accessed on 12.02.2020............................................................................................................. 15

PAGE 4
 RESEARCH METHODOLOGY

RESEARCH QUESTIONS

1. Whether or not Lawyer’s fee falls within the paradigm of professional ethics.
2. Law relating to the same comparing the pre-independence and post-independence era.
3. Essential comparison between the laws in other countries and the law prevailing in India
with respect to the evolution of its interpretation.

HYPOTHESIS

That Lawyer’s fee falls within the paradigm of professional ethics.

PAGE 5
 INTRODUCTION

Access to justice basically implies access to a lawyer. The legitimate profession has an open
character. A lawyer is put between the state and the citizen; consequently, he plays out a just,
libertarian and emancipatory capacity. In spite of the fact that there is a lawyer between the state
and the citizen, there is frequently the genuine snag of extravagant professional fees which in itself
shapes the significant lump of the cost of litigation. Litigation in the Supreme Court is regularly a
huge money issue. It is so in huge numbers of the High Courts also. This is the incongruity
predominant in the constitutional courts, regardless of the nation's socialist characteristic in the
preamble to the Constitution. It is misleading to consider promoting the legal foundations or lawful
profession so far as that is concerned. The fact of the matter is about democratizing them. The
privilege to pick among the proficient is ‘democracy’. Like in whatever other occupation, a lawyer's
employment too is entirely normal and earthbound. The opportunity has already come and gone
that the atmosphere encompassing it is evacuated and the profession demystified. Defendants,
similar to patients, make for a chaotic parcel. Reconstruction in the lawful profession is a condition
point of reference for legal changes which again is basic for popularity based changes. The
misguided admiration inside the bar is adverse to most of the individuals from the profession, who
don't have any part in the underhandedness. It additionally refutes open great. The state ought to,
in this way, meddle with the "legitimate business sector" in the nation. This project focuses on some
aspects of this topic of “Lawyers’ fees” and goes deep into the heart of this topic by exploring
foreign laws, Indian case laws, criticisms and suggestions.

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 LAWYER’S FEE: WHETHER IT FALLS UNDER THE PARADIGM OF
PROFESSIONAL ETHICS

CHAPTER I: INDIAN LAW PERTAINING TO IT

1. PRE- INDEPENDENCE

The history of the legal profession in India can be traced back to the establishment of the First
British Court in Bombay in 1672 by Governor Aungier. The admission of attorneys was placed in
the hands of the Governor-in-Council and not with the Court. Prior to the establishment of the
Mayor’s Courts in 1726 in Madras and Calcutta, there were no legal practitioners.

The behavior of the advocates was highly influenced by the English Bar. To govern the behavior
of advocates, the Legal Practitioners Act1 and the Letters Patent of the High Courts was formed
and also the chief legislative governance of legal practitioners in the subordinate Courts in the
country were established until the Advocates Act, 1961 was enacted.

The Indian Bar Councils Act, 19262 was passed to unify the various grades of legal practice and to
provide self-government to the Bars attached to various Courts. The duties of the Bar Council were
to decide all matters concerning legal education, qualification for enrolment, discipline and control
of the profession. It was favourable to the advocates as it gave them authority previously held by
the judiciary to regulate the membership and discipline of their profession.

The Advocates Act, 19613 was a step to further this very initiative. As a result of the Advocates
Act, admission, practice, ethics, privileges, regulations, discipline and improvement of the
profession as well as law reform are now significantly in the hands of the profession itself.

1
LEGAL PRACTITIONERS ACT.
2
INDIAN BAR COUNCILS ACT, 1926.
3
ADVOCATES ACT, 1961.

PAGE 7
 2. POST- INDEPENDENCE

Post-Independence, it was mainly the Advocates act of 1961 and the Bar Council of India Rules4
which governed the conduct of the advocates.

ADVOCATE’S ACT OF 1961

Section 49: It gives powers to the Bar Council of India to make rules. To be more specific, Section
49 (1) (c)5 gives them the power to draft rules regarding the standard of professional conduct and
etiquette to be observed by advocates or the restrictions in the matter of practice to which senior
advocates shall be subject as mentioned in the Section 49 (1) (g)6.

Section 34: This talks about power of High Courts to make Rules, in exact words, Section 347 (1A)
reads as under

[(1A) The High Court shall make rules for fixing and regulating by taxation or otherwise the fees
payable as costs by any party in respect of the fees of his adversary’s advocate upon all proceedings
in the High Court or in any Court subordinate thereto.]8

Section 35: This entails punishment of advocates for misconduct. Section 35 (1)9 reads

“Where on receipt of a complaint or otherwise a State Bar Council has reason to believe that any
advocate on its roll has been guilty of professional or other misconduct, it shall refer the case for
disposal to its disciplinary committee.”

4
BAR COUNCIL OF INDIA RULES
5
SECTION 49 (1) (C), ADVOCATES ACT, 1961.
6
SECTION 49 (1) (g), ADVOCATES ACT, 1961.
7
SECTION 34, ADVOCATES ACT, 1961.
8
Inserted by Act 60 of 1973 w.e.f. 31.01.1974. 9
SECTION 35(1), ADVOCATES ACT, 1961

PAGE 8
 BAR COUNCIL OF INDIA RULES:

The Part VI i.e. the “Rules Governing Advocates”, in that the Chapter II deals with Standards of
Professional Conduct and Etiquette. The Section II under Chapter II, from Point 22 to 26 discusses
the charging and treatment of the “advocate’s fee”.

PAGE 9
 CHAPTER II: CASE LAWS

The Advocate’s Act of 1961 was enacted to govern the conduct of the advocates and penalties in
case of any misconduct. One major way which can lead to misconduct is charging of the exorbitant
fees by the lawyers. So the essential question over here is whether or not the Lawyer’s fee will be
considered within the ambit of professional ethics, however, more importantly what is the position
taken by the courts on the same.

1. M.P. Vashi v. Union of India (W.P.(C) No.632 of 2011)9

In a Maharashtra case, the levy of exorbitant fees by senior lawyers was the matter in issue. Vashi
argued that most of the designated lawyers, by making use of their star value and face value, charge
unfair fees. He submitted that a kind of monopoly is being created in the business, detrimental to
the interest of the common man at “the other side” who is unable to afford such highly priced
lawyers. Unfortunately, the Bombay High Court was not inclined to accept the contention and a
historical opportunity for institutional introspection was lost.

Even in decisions dealing with the professional conduct of lawyers, the Supreme Court has not
focused on the question of lawyers’ fees (O.P Sharma v. High Court of Punjab and Haryana
(2011)10 and Supreme Court Bar Association v. Union of India (1998)11.

2. Bar Council of Maharashtra v. M.V. Dabholkar (1975)12

However, in this earlier judgment in, the court indicated that misconduct is “not restricted to
technical interpretations of Rules of conduct.” The Supreme Court added,

9
M.P. Vashi v. Union of India W.P.(C) No.632 of 2011
10
O.P Sharma v. High Court of Punjab and Haryana, (2011) 6 SCC 86.
11
Supreme Court Bar Association v. Union of India, (1998) 4 SCC 409.
12
Bar Council of Maharashtra v. M.V. Dabholkar 1976 AIR 242.

PAGE 10
“Professional ethics cannot be contained in a Bar Council rule nor in traditional cant in the books
but in new canons of conscience which will command the members of the calling of justice to obey
rules or morality and utility.”

This principle should apply to the instances of excess charges by lawyers, whether they are seniors
or juniors. Since there is a clear deficit in the legislations, which has the effect of infringing on the
common man’s right, the Supreme Court needs to lay down the law even by way of judicial
legislation as done in Vishaka (1997)13 and Vineet Narain (1998).

13
Vishakha v. State of Rajasthan, (1997) 6 SCC 24.

PAGE 11
 CHAPTER III: COMPARISON BETWEEN THE LAWS PREVAILING IN OTHER COUNTRIES.

1. IN THE UNITED STATES-

The American rule says that each party, the plaintiff and the defendant have to pay their own
attorney’s fees unless it is permitted by any contract or statute which mentions that only one party
will be responsible for the payment of the attorney’s fees as given in the case of Alyeska Pipeline
Service Co. v. Wilderness Society14. Rule 1.5 of the Model Rules of Professional Conduct sets the
guidelines for the lawyer fees in the United States.

Contingent fees in the United States-

Traditionally, in the United States, the legal profession has always served as an obligation to serve
the clients who are poor without compensation. In the United States, Contingent fees is a widely
used method. Contingent fee means that the litigation fees are paid to the lawyer only after the
successful outcome of the litigation or settlement. In the United States, Contingent fees are used
in cases like vehicle accident or various other negligence cases and those fees are considered to be
ethical by the US legal profession. These contingent fees are usually 20-40% of the recovery or
settlement amount. This system of payment of fees is very much justifiable because it lets the poor
who otherwise cannot pay their legal fees have access to justice. However most jurisdictions in the
United States do not allow lawyers to work for a contingent fee in cases like that of criminal ad
family law cases (Rule 1.5(d) of the Model Rules of Professional Conduct15 of the American Bar
Association.

14
Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S.240 (1975).
15
Rule 1.5(d) of the Model Rules of Professional Conduct
http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/
rule_1_5_fees.html accessed on 12.02.2020.

PAGE 12
 2. IN THE UNITED KINGDOM-

The English law in the United Kingdom states that the losing party has the obligation to pay the
winning party’s lawyer’s fees. The English rule contends that it is the right of a party for legal
representation whether filing or defending the case, if he is successful should not be allowed to
face problem for paying his own lawyer fees. Damages are merely compensatory in almost all
English civil litigation cases.

Contingent fees or conditional fees in the United Kingdom-

In the United Kingdom, contingent fees have been the reason for much controversy during the
initial stages. They were introduced by the Courts and Legal Services Act 1990 (section 58)16.
Initially, the success fees was not allowed to be recovered from the clients but after the section 27
of the Access to Justice Act 199917 amended the Courts and Legal Services Act 1990, the courts
allowed the attorneys to recover the success fees from the losing party. The regulations of the
Conditional Fee Agreement Regulations Act 200018 were not very clear till 1 November 2005
when these regulations were set aside and after that, conditional agreements were much easier to
enter into.

However, in Scotland, things are different. There it is lawful to pay a lawyer his litigation fees only
if he wins the case for the client. But it is not lawful for the client or lawyer to fix a percentage
from the client’s winnings as the lawyer’s fee. Since 1990 it is legal for a lawyer to increase their
fee percentage after winning a case for the client provided the initial fee has been agreed both by
the lawyer and client beforehand.

16
Section 58, Courts and Legal Services Act 1990, available at
http://www.legislation.gov.uk/ukpga/1990/41/contents last accessed on 12.02.2020.
17
Section 27, Access to Justice Act 1999, available at http://www.legislation.gov.uk/ukpga/1999/22/contents last
accessed on 12.02.2020.
18
Conditional Fee Agreement Regulations Act 2000
http://legislation.data.gov.uk/uksi/2000/692/made/data.htm?wrap=true last accessed on 12.02.2020.

PAGE 13
 CHAPTER IV: CONTINGENCY FEE AGREEMENT AND WORK ON CONTINGENCY BASIS

The Bar Council of India forbids advocates from charging fees to their clients dependent upon the
outcome of litigation or pay a rate or share of the claims granted by the Court. Bar Council of India
Rules which peruses as under:

“20. An advocate shall not stipulate for a fee contingent on the results of litigation or agree to
share the proceeds thereof.”19

Numerous have the misguided judgment that the motivation behind why lawyers don't take a shot
at a contingency basis is that such an agreement between the attorney and client would be a betting
one, and thus are void. Aside from the Bar Council Rules which have explicitly denied it, in the
point of interest in the case of Ganga Ram v. Devi Das20, such an agreement was held to be void
for being against public policy, and furthermore, against professional ethics.21 Notwithstanding,
albeit denied, in a few cases, particularly those under the watchful eye of the lower Courts, clients
are charged on the percentage of case amount claimed that the lawyer can recoup. Notwithstanding,
the practice however common, has barely prompted question and can at times be demonstrated.
Reason being that the contingency agreement is constantly oral and profoundly casual.22 It must
be recollected that such an agreement is void as well as would prompt the lawyer confronting
disciplinary activity by the Bar Council and a shot of losing one's permit to practice at the Bar.23

In any case, perceiving how Contingency Fee framework has functioned in nations like the U.S.,
it is maybe time to re-examine whether it can be connected. The principle explanation behind the
express forbiddance in the Bar Council of India Rules is likely in light of the fact that lawyers must
not be permitted to have ulterior interests in the result of the case.25 They are thought to be of a
'noble profession', and are officers of the Court. Their primary target must be to obtain justice and

19
Bar Council of India Rules: Part VI, Chapter II, Section II, Rule 20
20
Ganga Ram v. Devi Das, AIR 1984 Raj 98
21
Ibid.
22
Should Indian Lawyers be Allowed To Work On Contingency Basis, Mowing The Law, (Dec. 9, 2012), available
at http://mowingthelaw.blogspot.com/2012/12/should-indian-lawyers-be-allowed-to.html last accessed on
12.02.2020.
23
Ibid.

PAGE 14
not monetary profit. In the event that they were keen on the matter, they subject to unfair means
or permit their emotions to bamboozle them. 24 Some of the time, the Court may concede an
alternative remedy then the one paid for, which the contingency agreement does not cover. In such
case it is hard to decide the lawyers' fee. This may prompt incomprehensible measure of debate
between lawyer and client.25 Albeit hypothetically this may appear like a decent reasoning, yet
practically speaking the Contingency Fee framework is a fortune for poor clients. There must be a
few people in India, who despite the fact that they have been wronged, don't make lawful move to
the court as a result of the legitimate expenses and the apprehension that even after in some way
or another having the capacity to meet those expenses, as yet losing the suit.26 In the event that the
old law is expelled from the Bar Council of India Rules, then this agreement can be adopted.
Written formal documents can appear with obvious clauses for each conceivable result, and
additionally whether out-of-pocket expenses are likewise to be paid are additionally unexpected.29

24
Ibid.
25
Ibid.
26
Ibid.

PAGE 15
 1. NEED FOR STANDARDIZATION

The trouble experienced in an assessment of fees with respect to a lawyer's fees does not legitimize
the robbery. The extent amongst work and cost is not entirely superfluous. Corporatism ought not
to destroy routine qualities. Experience, specialization, estimation of time and power of endeavors
might be essential in deciding fees.27 Likewise, there are general monetary criteria like demand
and availability, material cost, deserting of other work, and so forth. The arrangement of settling
fees taking into account the "star quality" of the lawyer is, notwithstanding, an unsafe pattern for
the legal and in addition for our majority rules system.
The levy of “bombastic fees” ought to lead to disciplinary action.31 It should be taken as a
demonstration of offense that "tends to bring reproach to the profession" adding up to professional
unfortunate behavior as characterized under the Bar Council Rules.28 There are state legislations
directing the lawyer's fees in the subordinate courts and even in the High Court in common and
criminal matters. Frequently, those are encircled by the High Court by conjuring power under
Articles 22529 and Article 227(3)30. The principles in regards to fees payable to advocates in Kerala
composed by the Kerala High Court after approval by the Governor is a fine illustration (Kerala
Gazette dated 22.7.1969).31 It is a misfortune that the practice of law in the constitutional courts is

27
Kaleeswaram Raj, Fair Advocacy as a Right, The Hindu (Mar. 27, 2014), available at
http://www.thehindu.com/opinion/lead/fair-advocacy-as-a-right/article5836221.ece last accessed on 12.02.2020.
28
Ibid.
29
Art. 225, Constitution of India
“Jurisdiction of existing High Courts Subject to the provisions of this Constitution and to the provisions of any law of
the appropriate Legislature made by virtue of powers conferred on that Legislature by this Constitution, the jurisdiction
of, and the law administered in, any existing High Court, and the respective powers of the Judges thereof in relation
to the administration of justice in the Court, including any power to make rules of Court and to regulate the sittings of
the Court and of members thereof sitting alone or in Division Courts, shall be the same as immediately before the
commencement of this Constitution: Provided that any restriction to which the exercise of original jurisdiction by any
of the High Courts with respect to any matter concerning the revenue or concerning any act ordered or done in the
collection thereof was subject immediately before the commencement of this Constitution shall no longer apply to the
exercise of such jurisdiction”
30
Art. 227 (3), Constitution of India
“The High Court may also settle tables of fees to be allowed to the sheriff and all clerks and officers of such courts
and to attorneys, advocates and pleaders practising therein: Provided that any rules made, forms prescribed or tables
settled under clause (2) or clause (3) shall not be inconsistent with the provision of any law for the time being in force,
and shall require the previous approval of the Governor”
31
Kaleeswaram Raj, Fair Advocacy as a Right, The Hindu (Mar. 27, 2014), available at
http://www.thehindu.com/opinion/lead/fair-advocacy-as-a-right/article5836221.ece last accessed on 12.02.2020.

PAGE 16
not controlled by any law at all. There is a genuine need to develop a culture in Indian constitutional
courts, where individuals ought to have the capacity to request reasonable advocacy as a
privilege.36

PAGE 17
 CONCLUSION

It is fallacious to think about popularising the judicial institutions or legal profession for that
matter. The point is about democratising them. The right to choose among the capable is the
touchstone of democracy. Like in any other occupation, a lawyer’s job too is quite ordinary and
terrestrial. It is high time that the aura surrounding it is removed and the profession demystified.
Litigants, like patients, make for an unorganised lot. Reformation in the legal profession is a
condition precedent for judicial reforms which again is indispensable for democratic reforms. The
idolatry within the bar is detrimental to the majority of the members of the profession, who do not
have any role in the mischief. It also negates public good. The state should, therefore, interfere
with the “legal market” in the country.

PAGE 18