CORRUPT lawyers continue to plunder the estates of their deceased clients by calculating their fees for administering estates on the Cyprus Bar Association’s ‘Minimum Fee Regulations’, which were abolished in 2018.
My suspicions were raised when I received a number of emails from co-executors and beneficiaries of deceased family members whose corrupt lawyers had asked them to obtain valuations of the deceased’s estate.
For readers who may be unaware of this change in the law, lawyers used to face penalties, including being struck of the register, if they failed to charge the minimum fees dictated by the Cyprus Bar Association for out-of-court work.
The typical minimum fee for administering an estate would be 7% or more of the value of the estate. This was a huge amount in cases where the estate comprised one or more properties.
Legal challenge to the European Commission
Following a successful challenge by ‘Fairness in Fees‘ to the European Commission, infringement proceedings were started against Cyprus for failing to comply with their obligations under EU law.
In November 2018, the Commission closed infringement proceedings against Cyprus, announcing that:
“The European Commission decided today to close infringement proceedings against Cyprus concerning a minimum fee scale for out-of-court legal work, such as the drawing up of wills, contracts, the administration of estates and the registration of companies.
“EU law requires Member States to refrain from encouraging undertakings or associations of undertakings to favour or encourage anti-competitive behaviour that would breach Article 101 of the Treaty on the functioning of the European Union.
“In April 2018, the Commission raised concerns with the Cypriot authorities that certain legislative provisions, by empowering the Cyprus Bar Association to adopt a minimum fee scale for out-of-court work, encouraged behaviour that could prevent, restrict or distort competition within the EU’s Single Market.
“In response to the concerns raised, Cyprus has amended its law. The Commission welcomes the new legislation, which removes the specific provision empowering the Cyprus Bar Association to set these fees.
“In parallel, the Commission today also closed an antitrust investigation into the minimum fee scale adopted by the Cyprus Bar Association, based on the empowerment contained in the national legislation.
“The Commission welcomes the decision of the Cyprus Bar Association to abrogate this minimum fee scale after the Commission raised concerns that these rules were not compatible with Article 101 of the Treaty on the Functioning of the EU.
“The Commission’s intervention means that lawyers can now freely determine their fees when providing out-of-court legal services and that citizens will benefit from more competitive prices in this sector.”
However, despite the European Commission’s infringement proceedings, a change in the law and the repeal of the minimum fees, corrupt lawyers continue to plunder the estates of their deceased clients.
Recommendations
It is essential that anyone wishing to engage the services of a lawyer in Cyprus to draw up their Will, act as their Power of Attorney, administer their estate, etc., etc. shop around and get competitive written quotations for the work.
It is also vital that if the work involves the administration of the estate the agreed fee for undertaking this task is written into their Will.