The Consumer Council is strongly opposed to preserving scale fees for conveyancing.

23 June 1997
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The Consumer Council is strongly opposed to preserving scale fees for conveyancing.

The Council points out that the seemingly large reductions in the proposed scale fees for conveyancing clearly demonstrates the arbitrary nature of this pricing process as well as the wide leverage for reduced charges.

The Council is aware of reports in the press that scale fees for conveyancing have been circumvented by the practice of not charging for all transactions associated with a purchase. This practice provides further argument that prices should best be decided by market forces.

In fact, many legal services are not subject to the imposition of scale fees, begging the obvious question of why they should be applied to conveyancing service.

The Law Society's proposal to delete Section 56 of the Legal Practitioners Ordinance (which currently allows a solicitor and a client to make an agreement as to the remuneration of a transaction of non-contentious business) is a retrograde step in fair competition.

The Council is also concerned that once the pressure for reforms on conveyancing charges has dissipated, the consumer interests will be in jeopardy in the long run. Failure to change this pricing mechanism of pegging fees to property price could allow conveyancing fees to reach an unreasonably high level again.

Further, the Council is not convinced of the argument that the abolition of scale fees could jeopardise the quality of legal service. No similar scale fees exist for other professions such as medical practitioners and accountants. The Council believes that quality of legal services should be addressed directly by professional bodies rather than indirectly through setting mandatory minimum fees.

Separately, the Consumer Council supports the Government proposal to invalidate contractual provisions requiring purchasers to pay seller's legal costs if the parties are represented separately. It is difficult for purchasers, who have little bargaining power, to refute the unreasonable request. As a matter of principle, each party to the contract should pay its own share of costs.