Amendments to Ordinance No 1 of 09.07.2004 on the minimum amounts of attorneys’ fees

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On 04.11.2022 amendments to Ordinance No. 1 of 09.07.2004 on the minimum amounts of attorneys’ fees (“the Ordinance”) were published in the State Gazette (“SG”). The amendments are partly determined by a procedural violation during the adoption of the previous version of the Ordinance, which led to its annulment by the Supreme Administrative Court (“SAC”). The Supreme Bar Council (“SBC”) adopted the new texts in the Ordinance based on the following three arguments. Firstly, the changes were justified by the serious increase in the prices of goods and services necessary for the exercise of the activity. Also, the innovations are explained by the assignment to lawyers of additional activities under special laws as well as under the EU regulations applicable to Bulgarian law. Thirdly, the SBC justified the changes by the need to maintain and improve the training of lawyers in order to be able to continue to provide quality services.

Amendments have been made to a number of aspects of the existing Ordinance, the more significant of which will be discussed here.

To begin with, there is a discretionary option for lawyers to go below the minimum remuneration for low income individuals. This possibility is also dictated by the practice of the Court of Justice of the European Union in Joined Cases C-427/16 and C-428/16: “lawyers are not liable to disciplinary action for negotiating fees below the minimum amounts established in Regulation No 1/09.07.2004 and may, within the limits of freedom of contract, freely agree on the amounts of fees for the legal assistance they provide below the minimum amounts”. Thus, since November 2017, lawyers are not liable to disciplinary action if they fall below the minimum remuneration under the Ordinance and do not have to choose whether to perform services free of charge or to claim at least the minimum fee under the Ordinance. They may instead negotiate some fair payment.

Secondly, the amendments to the Ordinance recognise travel and stay expenses of lawyers when they have to travel outside the locality where their office is located for legal representation, defense and assistance before judicial and administrative institutions.

The amendments to the Ordinance unify the remuneration in civil and administrative cases, with the argument that there is no significant difference between the two types of cases, in terms of complexity and risk carried by the lawyer.  Article 7, par. 2 of the Ordinance also contains a curious new innovation – this provision constitutes the criterion for calculating lawyers’ fees in civil and administrative cases with a material interest.  The sum of BGN 25,000 has been introduced as a step in the scale under Article 7, par. 2 for calculating the attorney’s fees in relation to the material interest in the case. In this way, a clearer distinction is made between the individual cases, taking into account their legal complexity and their specificity in determining the fees. This solution is similar to the rule adopted by the legislator for determining the generic jurisdiction in civil and commercial cases – Article 104, paragraph 1, item 4 of the Civil Procedure Code, where also the amount of BGN 25 000 serves as a quantitative criterion for the jurisdiction of cases. With the amendments to the Ordinance not only the fixed amounts have been increased, but also the percentage of the remuneration in relation to the material interest.

For the first time, double remuneration is provided for legal aid in emergency situations and on non-working days. As an example – verbal advice on a working day is BGN 100 and on a non-working day is BGN 200.

Civil turnover increasingly requires the provision of legal aid in foreign languages, which determines the need for changes in the Ordinance to take this into account. The amendments provide for an increase of the fee by ½ in case of legal assistance and preparation of documents in a language other than Bulgarian.

As a result of the innovations in the Ordinance, in the event of great factual and legal complexity of the case, the fee is calculated at double the usual amount. The complexity shall be assessed by the court in accordance with the provision of Article 78 of the Civil Procedure Code.

There is also a significant increase in the most common services performed by lawyers – drafting of written contracts, notarial deeds, contracts for sale, exchange, donation, mortgage, superficies, easements, etc. It is noteworthy that in addition to the fixed amount for the service, the amount of the fee has been increased in relation to the material interest.

There is a new concept in pricing regarding registration of circumstances and declaration of deeds in the Commercial Register (“CR”). Prior to the current changes, a fixed fee was payable for such work. A distinction is now made with regard to whether or not the attorney who files the particular circumstance or announces the deed in the Commercial Register has drafted the documents submitted to the Commercial Register for registration.

It is stipulated that when the lawyer has not drafted the documents that will be submitted to the Commercial Register, but only files them for registration, the fees shall be half of those specified in Article 6, para. 1, item 9 of Ordinance No. 1 of 09.07.2004.

In summary, with the amendments adopted, the Supreme Bar Council is making a statement that it aims to create a new legal framework for the regulation of the financial relationship between lawyer and client, which will more adequately reflect the changes that have occurred in society in the meantime. It should be pointed out, however, that since in private law relationships, such as those between client and lawyer, the principle of freedom of contract applies with full force, it is possible to agree on a different amount of remuneration payable for the provision of legal services.

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