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Every lawyer is entitled to be paid for work done for their clients but very often clients have no idea how lawyers bill or understand the bills once they have been received.

Like anyone providing a service such as a doctor, a carpenter or an electrician a bill will either be provided before the work starts or at the end of the job representing work done for you. It is no different with a lawyer. You may have heard words like “hourly fee” or “contingency fee” or “retainer fee” or “flat fee” and had no idea what any of these meant.

The “hourly fee”is a sum of money a lawyer will charge his client for work done on an hourly basis. This is the most common type of billing in Vanuatu for lawyers. A lawyer charging per hour will keep a manual or digital record of the time spent on your case and will usually give you a summary in your bill, e.g. drafting of claim 3 hours at VT15, 000 per hour totalling VT45, 000. You are entitled to ask your lawyer for an itemized bill if you feel it is necessary.

A “retainer fee”is a sum of money paid by a client towards legal fees. It acts like a down payment as it is paid at the time of hiring the lawyer. A retainer fee is usually taken when a lawyer charges on an hourly basis so that as the lawyer does work the costs for that work is subtracted from the retainer amount. The retainer fee may have to be replenished from time to time depending on the arrangement with your lawyer or else, once it has been used, you will have to continue payments to the lawyer as work is done. Paying your lawyer an initial retainer does not mean you are not still entitled to bills for work done so that you can follow exactly what is happening in your case and how much it is costing.

A “contingency fee”arrangement is where the lawyer agrees to take a percentage of the damages or monies you receive in the case. With this type of fee arrangement you will have no upfront costs and the lawyer’s fee is based solely on his winning the case. This type of fee arrangement is usual in personal injury matters, e.g. a car accident. IT IS NOT A CONTINGENCY FEE IF THE LAWYER AGREES TO TAKE A PERCENTAGE OF THE WINNINGS BUT IF HE LOSES PRESENTS YOU WITH AN ITEMISED BILL FOR PAYMENT.

With contingency fees please be cautious as a lawyer working on a contingency fee places himself in a potentially conflicting situation. This means that he may not always act in your best interest such as settling a matter at the earliest stage for you and going instead to trail because he is trying to get as much money for you so that the percentage he receives as payment will be higher.

A “flat fee”is a single, one-time payment to a lawyer usually for preparation of a Will, an agreement or one court appearance.

No matter the fee arrangement agreed between you and your lawyer it is very important that this agreement is put in writing and it specifies when bills will be given to you, e.g. every 3 months or as work is done and completed.

It is important to know that for any bill given to you by a lawyer it should clearly show what work was done for you and how much was charged based on the fee arrangement agreed between you and your lawyer. DO NOTbe afraid to ask questions about your bill or to challenge what you consider to be incorrect billing. You wouldn’t go into a restaurant and order a bowl of soup and then be asked to pay for a steak without querying the bill so don’t do it with your lawyer. ALWAYSget a bill from your lawyer. MAKE SUREthe bill you receive has all the information you need. MAKE SUREto verify that the work charged for in the bill has in fact been done before handing over payment or that there is a scheduled time to complete that work that would justify payment in advance. If a payment is made in advance of work done you want to follow up to be sure that the work has in fact been done. If you have paid and the work is not done then you are entitled to request a refund.

You should be very weary of a lawyer working for you who is charging fees without agreeing with you first what those fees will be and how they will be charged, provides you with no bills or few bills, does not provide detailed bills when you ask for it and avoids putting any information regarding payment of fees on paper for you. This is usually a bad sign and may mean that the lawyer is either overcharging for work done or is in fact charging for work he has not done.

DISCLAIMER – This is a legal column to provide basic information on the law and court procedure. It is not to be used as a substitute for legal advice but to be used only as a starting point in understanding what you might need and what you might need to do.     

If you have any questions or require clarification on the above please contact the writers at vanuatulaw@gmail.comor contact us at website www.pawthelaw.info