SLS exposes bank's 'illegal' scale of fees

Kota Kinabalu: A prominent national financial institution has been accused of committing an unlawful practice of implementing its own standardised scale of fees for its panel of lawyers at a discount.Revealing this, Sabah Law Society (SLS) said the bank's own scale is unlawful as it is grossly below the prescribed scale of fees under the Advocates' Remuneration (Amendment) Rules 2010 ("the Advocates' Remuneration Rules").

"It has come to the knowledge of the Sabah Law Society that there is a prominent national financial institution implementing its own standardised scale of fees ("the bank's own scale") for its panel of lawyers in respect of litigation matters, specifically auction cases and execution proceedings."

"The SLS has come into possession of documentary evidence which indicates that the bank's own scale is grossly below the prescribed scale of fees under the Advocates' Remuneration (Amendment) Rules 2010 ("the Advocates' Remuneration Rules"). The Bank's own scale is therefore unlawful," SLS said in a statement.

The SLS said it is of the firm belief that the primary purpose of the Advocates' Remuneration Rules is to set a benchmark to establish a reasonable level of remuneration, commensurate with the provision of professional services of an acceptable and recognised standard.

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The SLS called for attention from all financial institutions in Sabah that the imposition of a bank's own scale which imposes a "discount" from the Advocates Remuneration Rules is a violation of the statutory rules.

As a precedent, it said it should be noted that in 2012, Khairil Azmi Bin Mohd Hasbie (suing on behalf of himself as member and as President on behalf of all other members of the Advocates' Association of Sarawak), "the Association" took legal action against another prominent financial institution for imposing their own discounted scale of fees.

The High Court judge, Ravinthran Paramaguru, had granted a declaration in favour of the Association that the bank's standardised scale of fees contravened the Advocates Remuneration Rules 1988 of Sarawak and was thus illegal, null and void and had also granted costs against the financial institution concerned.

The High Court in Sarawak had found that as the Advocates Remuneration Rules were made by the Chief Judge of Sabah and Sarawak pursuant to section 17 (c) of the Advocates Ordinance which said provision provides for the fixing of costs between a lawyer and his client. SLS pointed out that the Chief Judge of Sabah and Sarawak was empowered under the Sarawak Advocates Ordinance to do so, and thus the Advocates Remuneration Rules have the force of law.

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"Such rationale applies equally to Sabah," it said. The SLS will be writing to the financial institution concerned requesting it to cease imposing the bank's own scale which results in a payment of fees which is less than the scale fees as prescribed by the Advocates' Remuneration Rules.

"In the event that any financial institution continues to impose the bank's own scale, the SLS on behalf of its members will not hesitate to commence legal action to declare the bank's own scale as illegal, null and void accordingly," it warned.

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