Calculation of a lawyer's fees

This is a question that many clients and professionals ask us about. Lawyers' fees are free and must be agreed by mutual agreement with the client in what is called the Professional Order Form, which our Law Firm always has as a rule.

However, in the case of an order for costs, and when this has been agreed, or when nothing has been said, the different Professional Associations, such as the one in Madrid, have established rules for Minimum Fees which will be applied in these cases and which basically take into account the amount of the procedure or the legal interest debated. For this purpose there is a scale of application published by each Bar Association.

With regard to the application of these rules, a question has recently arisen regarding their application, and the Civil Chamber of the Supreme Court in its recent ORDER of 15 September 2020 (rec. 1467/2017) has recalled that, "according to the reiterated doctrine of this Chamber, in order to fix the legal fees, it is not only the amount in dispute or the economic interest of the case that must be taken into account".

Specifically, the Chamber mentions that the fee included in the valuation must be a weighted and reasonable average within the parameters of the profession, not only calculated in accordance with criteria of amount, but also appropriate to the amount of the case:

• - the circumstances of the case,
• - the degree of complexity of the case
• - the stage of the proceedings
• - the grounds of appeal
• - the length and development of the pleading contesting the appeal,
• - the intervention of other professionals in the same procedural position,
• - and the fees they submitted for the purposes of their inclusion in the assessment of costs.

Likewise, the Supreme Court goes on to say that "neither the amount of the proceedings nor the mandatory report of the Bar Association is binding in itself for the setting of that reasonable average to be included in the assessment of costs, nor does this mean that the lawyer who is making the minutes cannot invoice his client for the full amount of the fees agreed with his client for his professional services, The LAJ of the Chamber is responsible for examining in the first place the specific circumstances of the case and its adaptation to the parameters or criteria governing the matter, the review function of this Chamber being limited to cases in which the decree issued by the LAJ infringes procedural rules or incurs in arbitrariness, unreasonableness or lack of proportion".

Limit of one third vs. complexity of the case

The losing party contested the assessment of costs on the grounds that the fees of the lawyer had been excessive, considering that the procedure had been followed for a specific amount (744 euros) and that the limit of one third of article 394.3 LEC had not been respected in the assessment, as well as having infringed the ninth criterion of the ICAM's fee rules. Therefore, the lawyer's fees should be set at 248 euros plus VAT (300.08 euros in total) and not the total of 3,872.00 euros demanded by the lawyer in his fees.

On the other hand, the lawyer for the minute party understands that the rule of one third of the amount is not applicable when "the rent is significantly lower than the market rent and in old rents, as in this case", in addition to the fact that this rule is not imperative, and that the judicial body may not apply it "due to the complexity of the case".

The Civil Chamber, responding to this problem and as some Provincial Courts have understood (SSAP Baleares, 4th , of 18 March 2003, Baleares, 4th , of 11 October 2001, and Vizcaya, 5th , of 26 February 2001), "the limit of one third of art. 394. 3 LEC, does not apply in those cases in which, as occurs in lease proceedings for old rental housing, the amount is minimal - as it is set at the amount of one year's rent - and, nevertheless, the intervention of the lawyer is, in addition to being mandatory, complex". Thus, in these cases, "it is not appropriate to apply this rule in all its rigour in order to avoid only ridiculous fees being declared due, absolutely disproportionate to the professional work carried out according to the complexity of the case and its incidences".

In short, the Court argues that "an automatic application of art. 394.3 LEC would lead to setting the lawyer's fees at a ridiculous figure (248 euros plus VAT), which would not correspond to the real effort of dedication and study carried out according to the complexity of the case".

Remember to consult our Law Firm for any question related to this and other consultations.