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Foreword
The board of the Nederlandse Orde van Advocaten (Order of Advocate) issues to its members
(all lawyers in the Netherlands) a guideline which indicates how a lawyers fees may be
calculated. This official guideline is titled "Official schedule of charges for
lawyers bill of costs". This folder contains a summary of this official guideline.
The use of legal terminology in this folder was limited as much as possible but could not
be avoided in all cases. For that matter, a guideline is not a hard and fast rule;
deviations are always possible. Yet this guideline forms a good starting-point for
discussion with your lawyer about the costs entailed in the handling of a case. Most
important is of course that it is clear to you and your how the fee is calculated. And
this guideline can serve as a basis for the calculation. But, as we have said, you may
come to a different agreement with your lawyer.
This may occur, for instance, if your lawyer is your regular advisor and is not just
handling one case for you. In general you may assume that if no specific agreements have
been made, the note of fees is drawn up on the basis of the official guideline.
- No fixed rates for legal services
The bill of costs- Frequently employed charging methods
- A. On the basis of an hourly rate
B. Identical to a, but dependent on the client's means
C. Identical to a, but dependent on the outcome- A fixed sum
- Yearly contract / framework agreement
- Collection rates
- Other systems
- Payment in advance /"no cure no pay"
- Queries or objections
DUTCH LAWYERS DO NOT CHARGE FIXED RATES FOR THEIR LEGAL SERVICES
The Netherlands Bar Association has made the explicit recommendation to its members (all practising lawyers in Holland) to make prior agreements with their clients concerning the method of charging to be employed and to record this in writing.
This recommendation is in your interest; in
your first dealings with a lawyer you are also at liberty to request such an agreement.
Your lawyer will inform you what his fee is based upon. He will also, insofar as possible,
give you an estimate of the total costs and inform you of the financial consequences of
the handling of your case. Furthermore your lawyer should promptly bring to your notice
any new developments in the case which might require additional work and therefore have an
effect on the total costs of the case.
A lawyer's bill of costs is usually composed of his fees, i.e. the amount charged by the lawyer for his professional services, disbursements and VAT. Disbursements are the expenses incurred by the lawyer for his client, such as court registry fees, bailiff's expenses, travelling and accommodation expenses. For office expenses, such as postage, telephone, fax and photocopying, the lawyer will usually charge a fixed percentage of his fees or a fixed sum. The disbursements can be divided into those taxed with VAT, and those exempt from VAT. Of the untaxed disbursements the most important are the court registry fees (the fees to be paid in a lawsuit to the court before which the case is brought) and certain bailiff's expenses. The lawyer's fees are almost invariably subject to 17.5% VAT.
A NUMBER OF (VERY) FREQUENTLY EMPLOYED CHARGING METHODS
In the business professions sector, thus also the legal profession, there are various ways of charging for services rendered. A summary of the charging methods customary in Holland and abroad is given below. As has already been stated: a lawyer is free to make his own arrangements with his client., and is therefore not obliged to use any of the methods summarised below.
1. ON THE BASIS OF AN HOURLY RATE
A. HOURS X HOURLY RATE
This system is the most commonly used in the business professions. A law firm can charge
either a fixed hourly rate or different hourly rates according to the type of lawyer and
depending on their experience. The hourly rate can also be made dependent on factors such
as urgency the expertise required for the case, the nature of the case, and the interest
at stake.
When fixing the rate a lawyer may take into account the client's financial means.
C. IDENTICAL TO A, BUT DEPENDENT ON THE OUTCOME
With this method a lawyer may agree on two rates with the client: a lower rate if the
objective is not achieved, a higher rate if the objective is achieved.
2. A FIXED SUM
The client agrees beforehand with the lawyer to pay a fixed sum for the services
requested.
3. YEARLY CONTRACT / FRAMEWORK
AGREEMENT
With this type of agreement the client, often an entrepreneur, makes agreements with a law
firm concerning the manner in which the latter will charge for services to be rendered in
future cases. The rates and factors determining these rates may be laid down based on
experience gained in earlier cases. These may also be special factors, for example urgency
, specialist knowledge, the interest at stake, and the nature of the case.
4. COLLECTION RATES
Cases in which the emphasis lies on the collection of sums of money are called "debt
collection cases". It is customary to apply the so called collection rates,
especially when a lawyer handles several debt collection cases simultaneously. In such
cases the client agrees with the lawyer beforehand on a charge equal to a percentage of
the sum collected.
For instance:
5. OTHER METHODS
It is also possible to employ other methods or a combination of the methods summarised
above. It goes without saying that such methods must never be in conflict with the rules
of conduct governing the legal profession.
6. PAYMENT IN ADVANCE
When you discuss the financial aspects of the case with your lawyer, he may ask you to pay
a sum of money into his office account by way of payment in advance.
"NO CURE NO PAY" NOT PERMITTED
In some countries the practice is permitted by which the lawyer is paid if he wins the case and is not paid any consideration at all if he loses the case. This system is known as 'no cure no pay'. With this system, however, the lawyer has a personal financial interest in winning the case, which in turn can impair the essential independence of the lawyer. In addition there is the risk that the lawyer will charge higher rates to compensate for any unpaid hours worked in lost cases. For these reasons the legal profession in Holland is not permitted to apply the 'no cure no pay' principle. The same goes for the lawyer agreeing with the client that his fees will be a percentage of the proceeds from the case. This practice is permitted only in respect of debt collection, see the collection rates discussed above in 5. In all other cases this practice is forbidden.
It may happen that you have queries concerning your lawyer's bill. In such event you can ask him for a detailed account of the charges made for the work done (thus more than a simple statement of fees, disbursements and VAT). Your lawyer is obliged to provide you with this detailed account. He must keep records of the hours worked and the work done on each case.
If you still have objections after having received this detailed account, you are advised to bring this to the attention of your lawyer in writing. If you are unable to arrive at a solution together with your lawyer, he should explain to you the relevant statutory provisions and the procedure which should be followed. This will depend on the type of case which the lawyer has handled for you, what agreements you have made beforehand and the nature of your objections. You are always free to approach the Supervisory Committee in the district where your lawyer practises.
The Supervisory Committee will gladly advise you on the options open to you.
You may also contact the Netherlands Bar Association at :
Or contact Advocare directly at: