The Council had published, in the November 2001 issue of the SLG, its first practice direction on the use of credit cards for the payment of solicitors' bills of costs. The Council has received feedback that under the acceptance process as practiced by all merchant banks in Singapore, the merchant discount rate ('MDR') is automatically deducted. The law firm/law corporation will be paid its bill minus the agreed MDR.
In view of this accepting process, the Practice Direction will be modified. The Council will approve of a law firm/law corporation absorbing the MDR. Therefore, if a law firm's bill of costs is $100 and the agreed MDR is 2%, the law firm can be paid $98 for that transaction by the acquiring bank and $2 be retained by the bank. The Council will not view this as sharing of fees by a law firm with the bank.
You may circulate this Practice Direction, and the earlier Practice Direction issued on 1 October 2001 as well, to your bank when communicating with them on the terms of the agreement you wish to enter into with them.
Dated 1 January 2002