(Legal Fees) Solicitors’ Remuneration Order 2023: A Comprehensive Guide
Introduction
The Solicitors’ Remuneration Order 2023 (SRO 2023) is a significant legal framework that governs the remuneration of solicitors for non-contentious matters in Malaysia. Effective July 15, 2023, this order replaces the previous Solicitors’ Remuneration Order 2005 (SRO 2005) and introduces revised fee structures that better reflect the current economic landscape. This article provides an in-depth examination of SRO 2023, its key provisions, changes from the previous order, and its implications for legal practitioners and clients.
Understanding the Solicitors’ Remuneration Order
What is the Solicitors’ Remuneration Order?
The Solicitors’ Remuneration Order (SRO) is a regulation that prescribes the scale of fees that solicitors may charge for specific legal services, particularly in non-contentious matters such as property transactions, loan documentation, and tenancy agreements. The order ensures transparency, standardization, and fairness in legal fees while preventing overcharging and undercutting among solicitors.
Key Changes in the Solicitors’ Remuneration Order 2023
The SRO 2023 introduces updated fees and additional provisions that address contemporary legal and financial challenges. The key changes include:
- Revised Fee Structures: The new order modifies the scale fees for property transactions, tenancies, and financing documentation.
- Clarifications on Discounts and Waivers: It provides clearer guidelines on permissible discounts for legal fees.
- Inclusion of Additional Legal Services: Expanded coverage includes digital transactions and updated tenancy-related provisions.
Breakdown of Fee Schedules
The Solicitors’ Remuneration Order 2023 is divided into several schedules, each governing different types of legal services. Below is a detailed breakdown:
First Schedule: Sale and Transfer of Property
This schedule outlines the fees for property transactions.
Table A: Sale and Transfer (General Transactions)
| Property Value (RM) | Legal Fee (%) |
|---|---|
| First 500,000 | 1.25% (min RM500) |
| Next 7,000,000 | 1.00% |
| Above 7,500,000 | Negotiable (Max 1%) |
Table B: Sale and Transfer (Under Housing Development Act 1966)
| Property Value (RM) | Discounted Legal Fee (%) |
| Up to 50,000 | RM500 |
| 50,001 – 250,000 | 75% of Table A |
| 250,001 – 500,000 | 70% of Table A |
| 500,001 – 1,000,000 | 65% of Table A |
| Above 1,000,000 | 60% of Table A |
Second Schedule: Lease and Tenancy Agreements
The fees for lease and tenancy agreements vary based on monthly rental values.
| Monthly Rental (RM) | Lease Agreement (% of monthly rent) | Tenancy Agreement (% of monthly rent) |
| Up to 10,000 | 60% (Min RM1,000) | 30% (Min RM500) |
| Above 10,000 | 30-50% | 15-25% |
Third Schedule: Loan Documentation and Financing
| Loan Amount (RM) | Legal Fee (%) |
| First 500,000 | 1.25% (Min RM500) |
| Next 7,000,000 | 1.00% |
| Above 7,500,000 | Negotiable (Max 1%) |
The principal instrument is charged at full fee, while subsidiary instruments (as per the Stamp Act 1949) attract 10% of full fee (Min RM500, Max RM2,000).
Fourth Schedule: Discharge of Charge and Deed of Reassignment
| Legal Service | Fee (RM) |
| Discharge of Charge (1st Title) | RM400 |
| Additional Title in Same Instrument | RM100 each |
| Deed of Reassignment (1st Property) | RM500 |
| Additional Property in Same Deed | RM100 each |
| If Property is Charged Again | RM200 |
Maximum Discount Allowed
Under SRO 2023, solicitors can offer discounts, but with limitations. The key provisions include:
- Maximum Discount Cap:
- Solicitors are allowed to offer a maximum discount of 25% on prescribed fees.
- Discounts exceeding this limit are considered non-compliant and subject to penalties.
- Minimum Fee Protection:
- Legal fees cannot be completely waived.
- Discounts must not result in a final fee that falls below the minimum prescribed amount.
- Volume-Based Discounts:
- Law firms handling bulk transactions (e.g., developers, financial institutions) may negotiate structured discounts.
- These discounts must still comply with the 25% limit.
- Documentation and Transparency:
- Any discounts applied must be clearly documented in the solicitor-client agreement.
- Firms must maintain records of all discounts given to ensure accountability and compliance.
Benefits on Clients
- Transparency in Fees: Clear fee structures prevent unexpected charges.
- Fair Pricing for Legal Services: Protects clients from excessive legal fees.
- Encouragement of Legal Representation: Standardized fees make legal services more accessible.
Compliance and Penalties
Solicitors must strictly adhere to the SRO 2023. Non-compliance may result in disciplinary actions under the Legal Profession Act 1976, including:
- Fines
- Suspension or Disbarment
Conclusion
The Solicitors’ Remuneration Order 2023 marks a significant advancement in regulating legal fees for non-contentious matters in Malaysia. By revising fee structures, clarifying discounts, and ensuring transparency, SRO 2023 enhances the accessibility and fairness of legal services. Solicitors and clients alike must familiarize themselves with these updates to ensure compliance and fair legal practice.
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