FEATURES

Letter of Engagement or Warrant to Act of a Law Practice

Letters of engagement and rules of practice

Rules of adequate professional service
The Legal Profession (Professional Conduct) Rules ('the Rules') came into force on 1 June 1998 and had set out in Rules 12 to 21, 35, 36 and 40 specific rules by which advocates and solicitors (lawyers) would be judged to decide whether they had provided adequate professional services to their clients. These Rules are sometimes called the 'client care' Rules of the profession.

Seven principal client care rules are set out in rules 17, 18, 20, 21, 40, 35 and 36 of the Rules and are summarised below.

Rule 17: sets out the duty to keep a client 'reasonably informed on the progress of his matter';

Rule 18: the notification of receipt of client moneys or securities on behalf of the client;

Rule 20: responding to clients' calls and keeping appointments unless there is a good reason why this could not be done;

Rule 21: explain to clients in a clear manner proposals of settlements, offers and positions taken by other parties in a language or dialect the client understands.

Rule 40: in appropriate cases evaluate with the client whether the consequence of a matter justifies the expense or the risk involved;

Rules 35 and 36: explain to the client the basis upon which he will charge for his services, provide estimates of fees and other payments, deliver interim bills in appropriate cases and in litigation matters explain to the client the concept of party and party and solicitor and client costs.
Under s 75B of the Legal Profession Act (Cap 161) ('the Act'), a client can make a complaint to the Council if they have received inadequate professional service. The Second Schedule to the Act sets out remedies the Council can order against a lawyer if a finding of inadequate professional service is made.

Rules to combat money laundering and terrorist financing
On 15 August 2007 these Rules were amended with the insertion of Rules 11D, 11E, 11F, 11G and 11H and directions set by a Council Practice Direction ('PD') that was revised on 15 January 2008.

The amendments made on 15 August 2007 enact practice rules to combat money laundering and terrorist financing by introducing a duty to check on a client's identity before acting in a matter (unless it is permitted by the PD to be waived or simplified and for specific types of transactions described in Rule 11F and the PD to check on the business relationship between the client and other party to the matter at the time of the instruction and on an on going basis.

Under Rule 11E a law practice cannot open and maintain moneys in any client account from an anonymous source or a client with an obviously fictitious name.
Under Rule 11G a law practice and lawyer has a duty to report a suspicious transaction to the police when required under section 39 (1) of the Corruption, Drug Trafficking and other Serious Crimes (Confiscation of Benefits) Act ('CDSA') and under Rule 11H to keep records for 5 years after the end of a matter on client identity and to ascertain the nature and purpose of the client's business relationship.

A breach of Rules 11D to 11H can subject a lawyer to disciplinary proceedings under section 85 of the Act for misconduct.

The Council to ensure the above Rules are met has been granted the power under Rule11I to randomly inspect law practices on its own motion or upon a complaint by a third party.

Rule 11G deals with the duty to report a suspicious transaction by way of a suspicious transaction report to the Commercial Affairs Department as required by section 39(1) of the CDSA and Rule 11H, the duty of every law practice to retain records used to identify a client under Rule11D and documents to ascertain the nature and purpose of the business relationship of a client under Rule11F. These 2 Rules are not addressed in this article which focuses on letters of engagement.

Rules on withdrawal from representing a client
Any discussion on letters of engagement must address the proper terms under which a law practice can terminate their retainer. A law practice cannot without cause or upon merely giving fixed days of notice to a client withdraw from acting for a client.

Members are reminded the grounds for withdrawal permitted by the Rules are found in Rule 42 (1) (a) to (g).Under Rule 42(2) of the Rules a lawyer must due notice to the client of his withdrawal allowing him reasonable time for substitution of a new lawyer and paying over to the client any moneys, papers and property which the client is entitled.

A comprehensive First Letter of Engagement or Warrant to Act

The Law Society reproduces again for members a precedent Letter of Engagement first published in 2003 with modifications when a new client is accepted by a practice to undertake work. This letter has been modified to insert appropriate clauses to explain to clients the anti money laundering and prevention of terrorist financing practice measures lawyers must undertake to comply with the PD and Rule 11D of the Rules.

A comprehensive first 'Letter of Engagement' or 'Warrant to Act' ensures every lawyer meets his practice duties described above.

The sample Letter of Engagement reproduced in this article modifies a Letter of Engagement reproduced with the kind permission of Mr Vinodh Coomaraswamy SC, who had shared a letter of engagement for contentious work at a Law Society seminar held in 2003 on client care for litigators.

Order 64, Rule 7, of the Rules of Court on Warrants to Act

The precedent letter of engagement published in this article makes reference to the above Rule of Court as Order 64 r7(1) makes its mandatory for every solicitor representing any party in any cause or matter to obtain a Warrant to act from that party.

The absence of such a Warrant to act can under Order 64 r7 (2) be taken prima facie evidence of lack of the lawyer's authority to act. See the case of Tung Hui Mannequin Industries v Tent Insurance Co Ltd (2005 3 SLG 69).

Her Honour Justice Judith Prakash in the above case held as follows:

Although a solicitor who files a writ or other pleading on behalf of a client thereby represents that he has the authority to act for a client, he must be aware that from time to time, his authority may be challenged and, if challenged, he must be prepared to disclose his warrant to act or other document establishing his authority……Solicitors therefore should not react with umbrage when asked to produce their warrants to act and especially when opposing counsel explains clearly the reason why there is a doubt regarding their authority.

Letters of Engagement or Warrants to Act left with agents/third parties or referrors of legal services

Letters of Engagements of law firms cannot be typed on the letterhead of a referror of legal services and signed by clients in their presence .Blank letters of Engagement or Warrants to Act cannot be left with third parties or agents of the client to have the client sign the same before them.

A letter of Engagement or Warrant to act is a document which not only evidences the authority of a law firm to act for a client, but also evidences compliance of rules of practice and sets out important terms and conditions of engagement.

Lawyers must when they are aware of the use of their law practices letters of Engagement or Warrants to Act in such improper manner by any third party as described above take immediate steps to stop the same.

A Sample Letter of Engagement

Dear Sirs,

SUBJECT MATTER: SALE/PURCHASE /SUIT NO 123 OF 2002
LETTER OF ENGAGEMENT

1 We refer to the meeting on _____________ between the undersigned and your Mr _________ .

2 Once again we thank you for instructing us in this matter.

(Establish client identity of an individual)

3 From 15 August 2007 law practices in Singapore are required by the Law Society to check the identity of their client
before they act for them.

Thank you for producing your original identity card/passport/driver's licence to the practice to establish your full
name and address

OR

(Establish identity of an individual client who instructs the practice from abroad)

From 15 August 2007 law practices in Singapore are required by the Law Society to check the identity of their
client before they act for them.
As you live abroad the easiest way for the law practice to check your identity is for you to show your original identity
document to establish your full name and address to a lawyer or other professional in your country or a notary public
to have him certify a copy of your identity document as true and forward the same directly to our law practice.

OR

(Establish client identity of a corporate client)

4 From 15 August 2007 law practices in Singapore are required by the Law Society to check the identity of a
client before acting for them. To verify the identity of the company we will conduct a search with the Accounting
and Corporate Regulatory Authority of Singapore to obtain the company's incorporation particulars and the names
and addresses of all directors and shareholders of the company.

As the company is instructing a director to give instructions to us on this matter we will also need to have evidence
of the authority of the director to give us instructions on behalf of the company and have sight of his original identity
document

OR

(Establish client identity of a foreign corporate client)

From 15 August 2007 law practices in Singapore are required by the Law Society to check the identity of a client
before acting for them. To verify the identity of the company in …., we require sight of a true copy or certified copy of
the certificate of incorporation evidenced by an accountant, lawyer or other professional in your country, which shows
the company's registered address, the list of names of and addresses of its directors and principal shareholders( that is
who own more than 25% of the company's shares)

5 We are also required by the Law Society's Rules of Practice to inform you of the principal terms of our engagement as your solicitors/counsel* in Singapore.

Scope of our services

6 The lawyer/Director /Partner in charge of your matter will be Mr/Ms/Dr/Mrs ____. She/He will be assisted by Mr and
Ms _____ who are secretaries/legal executives/ paralegal staff in our law practice.

7(1) During the course of the matter, we shall keep you advised on the progress of your matter on a regular basis either by
telephone, electronic mail or fax or letter enclosing copies of relevant correspondence. You can of course contact
us for a progress report at any time. The respective lawyers you can contact are __________ at (65) __________ and
paralegal staff are __________ at (65) _________ and their e-mail addresses are ___________ and _____________.

7(2) During the course of the matter where applicable we will explain to you any proposals of settlement or other offers
made or positions taken by other parties which affect your case. We will also where appropriate evaluate with you if
a course of action requested by you justifies the risk or expense involved.

8 The scope of our services which we foresee following our first meeting will extend to the following:
8.1 Advising you on matters of Singapore law related to the dispute which has arisen between you and XYZ Pte Ltd.
or acting for you in the purchase and mortgage of the property known as __________
Or
8.2 Representing you in legal proceedings brought in Singapore (if it is determined to be the appropriate jurisdiction)
in connection with the foregoing.
8.3 Doing all things as may be required or necessary and/or incidental in connection with the foregoing.

9 This letter countersigned by you constitutes your Warrant to Act in favour of us with respect to representing you generally in Singapore in connection with the above matter and no further warrant to act will be necessary for compliance with Order 64 Rule 7 of the Rules of Court.

Information on our professional fees

10 Our legal fees will be based on the actual time spent in connection with this matter by the lawyers having conduct of your matter, including the time spent in meetings with you, including any telephone conversations, emails to or from you, letters and others; preparing, reviewing and working on matter, preparing papers including correspondence; making and receiving telephone calls and others on your behalf ; preparing for and attending court on your behalf; travelling and waiting; and the overall management of this matter.

Hourly rate
The hourly rates of the lawyers who will be handling your matter are as follows:
The hourly rate of the partner/director is S$_______________ per hour; our junior partners/director is S$_____________ per hour and that of our associates is S$_______________ per hour. We are mindful of the need to keep your costs under control, and will endeavour to do so by ensuring that all work is done at the appropriate levels of seniority with the requisite degree of supervision.

We keep our hourly rates constantly under review and will notify you of any changes to them.

Or

11 Our fixed fee for acting for you to complete the purchase of your property and mortgage as agreed shall be _______________ The sum will be paid_______________ days before completion of your purchase after we issue you our bill of costs. As we have agreed to undertake your work on a fixed fee basis the bill will be rendered to you with a list of disbursements incurred or to be incurred by the practice before completion of your sale/purchase which is fixed under your contract of sale and purchase on_______________ or redemption of your mortgage by _______________

Please note this fixed fee agreed excludes disbursements and GST. We anticipate disbursements for the stamping of documents and all necessary legal searches to be about $_______________If there is a substantial increase in the estimate of our disbursements our practice will advice you of the same.

These disbursements include postage charges, telephone charges, photocopying charges, court fees and the costs of airfare and/or hotel accommodation for any travel outside Singapore relating to this matter by our lawyers. A list of disbursements will be provided in bill and a further itemised list of disbursements can be provided upon request.

Payment of deposit of fees

12 It is normal practice for law firms to require clients to pay sums of money from time to time on account of anticipated professional fees and disbursements. We will therefore require an initial deposit of S$_______________ (approximately Singapore Dollars ______________________) before we can start work on your matter. As you have advised the deposit will be remitted via telegraphic transfer in Singapore Dollars to our bank account, the details of which are as follows :

Please quote our file reference in your instructions to your bankers to assist us in tracing your remittance.

13 As your matter progresses, we reserve the right to ask for further deposits from you of a quantum commensurate with the anticipated professional fees and disbursements at that stage of the matter. If such a further deposit is requested, remittance of that deposit will be a condition of our continuing to act for you.

14 Please note that these sums are deposits only, and the total amount of professional fees and disbursements payable to
us may exceed or fall below the total amount of deposits remitted to us.

15 We will hold all deposits remitted to us in our client account for your benefit. Unless you give us specific instructions, it shall be in our discretion whether or not to place such monies on interest-bearing deposit. We are entitled to set off the monies standing to your credit in our client account and any interest accrued thereon against legal fees and disbursements due to us. We will not, however, effect any set-off against our legal fees and disbursements unless we have rendered a bill to you or other written note of costs and notified you in writing to your last known address of our intention to effect the set-off and carry out the set off with 2 days of our bill or note to you. For the purpose of exercising such set-off, we shall have the right to uplift any of your monies placed on interest-bearing deposit by us, whether at or prior to the time of maturity of the deposit and regardless of any penalty which may be imposed for early withdrawal.

Further information on costs for a litigation matter

16 A dispute such as the present one, if it proceeds to trial, can take up to _____days in open court at a total cost, exclusive of disbursements, of between S$_________ and S$_________. If the matter is settled before trial, as happens in many
litigious matters, our fees will be correspondingly lower. Please note that this estimate of likely fees is provided for your guidance only, and that our invoiced charges will in any event be based on the actual time spent by the lawyers handling this matter.

Information on party and party and solicitor and client costs

17 You will be personally responsible for the payment to us of our legal fees, disbursements and GST in full whether or not you succeed and whether or not the Court makes an order that your opponent pay your legal fees.

In the event that you are unsuccessful, you are likely to be ordered to pay your opponent's legal fees, and you will have to pay these legal fees in addition to the legal fees due to us.

Even if you succeed in the litigation the Court may not order your opponent to pay your legal fees or not order your opponent pay the full amount of the legal fees actually payable by you to us or your opponent may not in fact be capable of paying what has been ordered against him.

Fees of experts or third parties ( if applicable)

18 If we instruct experts, translators or other third parties on your behalf and with your approval, you will be responsible for paying their fees directly to them upon presentation of their invoices.

If GST is payable

19 As we are a business registered under Singapore's Goods and Services Tax Act, our legal fees and certain disbursements will be subject to a 7% Goods and Services Tax ('GST') to be borne by you.

Ceasing to act for you

20 We are entitled to terminate our engagement to act for you on the grounds set out in Rule 42 of the Law Society's Professional Conduct Rules and this includes where you have been in breach of our agreement on payment of fees set out in this agreement.

At the time of termination, we are entitled to exercise a lien (a right of possession) over all documents and monies held on your account until full payment is received. In the event if you decide to appoint new law practice, we will as required by the Law Society's Rules release all documents to them only upon receipt of an undertaking from your new lawyers to protect our right over your documents handed over to them for outstanding legal costs.

21 Please sign and return to us the attached copy of this letter and the enclosed Warrant to Act.

22 Please do not hesitate to contact our Mr ____________ or Mr ____________ if you require any clarification on any of the above matters or for any other purpose as this matter progresses.

Yours faithfully,

WARRANT TO ACT

I, ______________________ (NRIC No _______________) hereby agree to engage the services of M/s_________________
on the terms and conditions set out above and hereby grant that firm my Warrant to Act for me in Singapore in connection with legal proceedings relating to ___________________________.

Signed on the day of 2003.
________________________________

Name :
NRIC No

Note
This is merely a sample Letter of Engagement and not a Law Society approved format. It is to help law practices to develop their first engagement letter. You may adapt this letter as may be appropriate to suit the manner in which you practise or how you wish to charge your client. What is important is that you do not insert any terms in your Warrant to Act or Letter of Engagement in breach of the Rules, the Legal Profession (Solicitors' Accounts) and the Legal Profession (Deposit Interest) Rules.

Yasho Dhoraisingam
The Law Society of Singapore
Yasho@lawsoc.org.sg