Kerry Underwood

FIXED FEES AND AGREED FEES

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Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

SRA – Question of ethics – January 2014 – What is the difference between a fixed fee arrangement and agreed fees?

The Solicitors Regulation Authority gives guidance in relation to fixed fees and agreed fees and states that they are two distinct types of arrangement and must be treated differently to comply with the accounts rule.

This is true, but does not tell the whole story in that an agreed fee, which is what most solicitors will want, is also a fixed fee, in the sense that it cannot be varied upwards.

In relation to an agreed fee its terms must be evidenced in writing and the fee must be paid into Office Account and cannot be varied upwards and is payable by the client, whether or not the work is completed.

Clients signing up to an agreed fee must be made aware of the implications of paying it and must consent to it before any payment is made.

The benefit to the client is certainty and the benefit to the solicitor is cash flow.

Agreed fees are particularly useful for such matters as an initial interview and advice, and Wills and Powers of Attorney.

A fixed fee is a fee set at the beginning of a retainer, but only payable on completion of the work, and in those circumstances money received must be paid into Client Account pending completion of the work and the delivery of a final bill.

Examples of where fixed fees, as compared to agreed fees, are used, include conveyancing, and may, for example, include a fixed fee for, say, preparing and issuing an Employment Tribunal application.

I repeat the point that an agreed fee is also fixed, as it cannot be varied upwards.

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Written by kerryunderwood

January 25, 2019 at 1:44 pm

Posted in Uncategorized

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