Arbiters Inc Law Corp v Arokiasamy Steven Joseph: Legal Costs, Contentious Business Agreements, and Overcharging

The Appellate Division of the High Court of Singapore heard an appeal by Arbiters Inc Law Corporation against Mr. Arokiasamy Steven Joseph and Mdm Tan Kin Tee regarding legal costs. The law firm sought to enforce contentious business agreements to compel payment of legal fees. The court allowed the appeal in part, ordering an uplift of $27,000 for professional fees and disbursements, but concurred that the letters of engagement were unenforceable as contentious business agreements because the claimed legal fees were plainly excessive. The court also ordered Mr. Steven to pay the full invoiced fees of Professor Eleni in pounds sterling. The court expressed grave concerns regarding the conduct of Mr. Rai and referred the matter to the Law Society of Singapore.

1. Case Overview

1.1 Court

Appellate Division of the High Court

1.2 Outcome

Appeal Allowed in Part

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding legal costs. The court found the law firm's claimed fees excessive, voiding the contentious business agreements and ordering an uplift of $27,000.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Arbiters Inc Law CorporationAppellant, ApplicantCorporationAppeal Allowed in PartPartial
Arokiasamy Steven JosephRespondentIndividualAppeal Partially AllowedPartial
Tan Kin TeeRespondentIndividualAppeal Partially AllowedPartial

3. Judges

Judge NameTitleDelivered Judgment
Woo Bih LiJustice of the Appellate DivisionNo
Debbie Ong Siew LingJudge of the Appellate DivisionNo
See Kee OonJudge of the Appellate DivisionYes

4. Counsels

Counsel NameOrganization
Rai Vijay KumarArbiters Inc Law Corporation
Andrew OharaArbiters Inc Law Corporation
Jasleen KaurArbiters Inc Law Corporation

4. Facts

  1. Mr. Salvin, son of the respondents, committed suicide after a history of mental illness.
  2. Respondents engaged Arbiters Law to sue doctors and IMH for negligence leading to Mr. Salvin's suicide.
  3. Two letters of engagement (LOEs) were signed, outlining hourly rates and an estimated total fee.
  4. The respondents settled with the first and third defendants for $330,000.
  5. Arbiters Law claimed $399,000 in fees, exceeding the initial estimate of $150,000.
  6. The Judge fixed Arbiters Law's costs at $60,000, which the appellate court increased to $87,000.
  7. The respondents had agreed to pay Prof Eleni's fees of £12,300.

5. Formal Citations

  1. Arbiters Inc Law Corp v Arokiasamy Steven Joseph and another, Civil Appeal No 10 of 2024, [2024] SGHC(A) 37

6. Timeline

DateEvent
Mr Salvin Foster Steven committed suicide
Respondents contacted Red Lion Circle Advocates and Solicitors for legal advice
Respondents formally engaged Mr Balchandani to sue two doctors and the IMH
HC/S 833/2020 was commenced by Mr Balchandani on behalf of the respondents
Respondents instructed Arbiters Law to assist Mr Balchandani in S 833
Respondents signed a letter of engagement for Arbiters Law to represent them
Mr Steven signed a fresh letter of engagement to be represented by Arbiters Law
Respondents discontinued their claim against the second defendant in S 833
Mr Rai realised his client’s case hinged on proof that Concerta was inappropriate
Arbiters Law contacted Prof Eleni to request an expert report
Mr Rai sought leave to engage Prof Eleni as an expert for the respondents
First and third defendants made an offer to settle with a settlement sum of $200,000
Respondents instructed Arbiters Law and Red Lion Circle to issue an OTS in the sum of $450,000
First and third defendants increased their OTS from $200,000 to $270,000
Mr Rai made a fresh application to file Prof Eleni’s AEIC and the trial was adjourned to 11 September 2023
First and third defendants further increased their OTS to $330,000
Arbiters Law and Red Lion Circle were discharged by the respondents
Respondents contacted the first and third defendants and secured a settlement of $330,000
Arbiters Law filed HC/SUM 2331/2023
Respondents filed notices of their intention to act in person
Judge granted leave for Mr Rai and Mr Balchandani to be discharged
Court recorded the settlement between the respondents and the first and third defendants
Arbiters Law filed OA 1008 against the respondents for payment of its legal costs
Hearing of OA 1008
Mr Balchandani explained that the respondents were separately represented
Red Lion Circle’s letter dated 29 January 2024 at para 11
Hearing of the appeal
Mr Rai alluded to the respondents being on the brink of divorce as the matter that had been subject to privilege
Judgment Date

7. Legal Issues

  1. Enforceability of Contentious Business Agreements
    • Outcome: The court held that the letters of engagement amounted to contentious business agreements but were unenforceable due to unreasonableness.
    • Category: Substantive
    • Sub-Issues:
      • Certainty of terms
      • Fairness
      • Reasonableness
  2. Excessive Legal Fees
    • Outcome: The court found the fees claimed by Arbiters Law to be excessive and amounting to overcharging, thus rendering the agreements void.
    • Category: Substantive
    • Sub-Issues:
      • Overcharging
      • Disproportionate fees
      • Unreasonable costs
  3. Propriety of Separate Legal Representation
    • Outcome: The court expressed concerns about the justification for separate legal representation, suggesting it unnecessarily expanded costs.
    • Category: Procedural
    • Sub-Issues:
      • Conflict of interest
      • Duplication of work
      • Unnecessary expansion of costs

8. Remedies Sought

  1. Payment of Legal Costs
  2. Declaration that the LOEs were valid and binding CBAs

9. Cause of Actions

  • Breach of Duty
  • Negligence

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Legal Services

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Arokiasamy Steven Joseph (administrator of the estate of Salvin Foster Steven, deceased) and another v Lee Boon Chuan Nelson and others and other mattersHigh CourtYes[2023] SGHC 230SingaporeCited regarding the respondents filing notices of their intention to act in person and the Judge granting leave for Mr. Rai and Mr. Balchandani to be discharged.
Arbiters Inc Law Corporation v Arokiasamy Steven Joseph and anotherHigh CourtYes[2024] SGHC 26SingaporeThe decision of the Judge in OA 1008, out of which the present appeal arose, is set out in this case.
Sports Connection Pte Ltd v Asia Law Corp and anotherSingapore Law ReportsYes[2010] 4 SLR 590SingaporeCited for the requirements of a valid CBA under s 111 of the LPA and that the solicitor is entitled to enter into an agreement on costs with the client at a higher rate than what he would normally charge.
Re Nirumalan Kanapathi PillaiSingapore Law Reports (R)Yes[1999] 3 SLR(R) 1037SingaporeCited for the requirement that the agreement must be signed by the client to constitute a valid CBA under s 111 of the LPA.
Chancery Law Corp v Management Corporation Strata Title Plan No 1024Singapore Law ReportsYes[2016] 4 SLR 480SingaporeCited for the requirement that there must be sufficient certainty or specificity of the terms governing the fees to constitute a valid CBA under s 111 of the LPA.
Shamsudin bin Embun v P T Seah & CoSingapore Law Reports (R)Yes[1985-1986] SLR(R) 1108SingaporeCited for the requirement that there must be sufficient certainty or specificity of the terms governing the fees to constitute a valid CBA under s 111 of the LPA.
Chamberlain v Boodle & King (a firm)WLRYes[1982] 1 WLR 1443England and WalesCited for the requirement that the agreement must be sufficiently specific to tell the client what he is letting himself in for by way of costs.
Ho Seow Wan v Morgan Lewis Stamford LLC (formerly known as Stamford Law Corporation)High CourtYes[2018] SGHC 31SingaporeCited for the requirement that the agreement must be specified in sufficiently clear terms so that the client would be in a position to make a reasoned calculation based on the agreement as to what his legal fees would eventually be upon completion of the contentious legal matter.
Wilson v The Specter Partnership and OthersCosts LRYes[2007] 6 Costs LR 802England and WalesCited for the essence of a CBA and its benefit to both parties is certainty – the parties to the CBA define how the client will be charged.
Lin Jian Wei and another v Lim Eng Hock PeterSingapore Law ReportsYes[2011] 3 SLR 1052SingaporeCited for the court being conferred a broad supervisory role in assessing legal costs notwithstanding any prior agreement between the solicitor and the client.
Wong Foong Chai v Lin Kuo HaoSingapore Law Reports (R)Yes[2005] 3 SLR(R) 74SingaporeCited for the principle that no agreement is sacrosanct in the sense of being conclusive and immune to any investigation by the court itself.
In re Stuart, ex parte CathcartQBYes[1893] 2 QB 201England and WalesCited for the principle that whether an agreement was reasonable was to be determined by the court having regard to the kind of work which the solicitor has to do under the agreement.
Law Society of Singapore v Andre Ravindran Saravanapavan ArulSingapore Law ReportsYes[2011] 4 SLR 1184SingaporeCited for the principle that overcharging may occur if the number of hours billed for has been inflated, or where the solicitor enlarged the size of the total bill by deliberately engaging in work unnecessary to achieve the purpose of the retainer.
Allison v ClayhillsLTYesAllison v Clayhills (1907) 97 LT 709England and WalesCited for the principle that a solicitor may by virtue of his employment acquire a personal ascendancy over a client and this ascendancy may last long after the employment has ceased.
Marisol Llenos Foley v Harry Elias Partnership LLPSingapore Law ReportsYes[2022] 3 SLR 585SingaporeCited for the principle that even where a client is well-educated and fluent in English, the court recognises that, more likely than not, he or she would not be accustomed to litigation or dealing with lawyers when engaging a solicitor.
In re BaylisChYes[1896] 2 Ch 107England and WalesCited for the principle that in every case of an agreement between a solicitor and client the court has always recognised that a solicitor can exercise great influence over his client.
Mah Kiat Seng v Attorney-General and othersHigh CourtYes[2023] SGHC 52SingaporeCited regarding solicitor-and-client fees being higher than party-and-party costs.

13. Applicable Rules

Rule Name
O 21 r 2(2)(b) of the Rules of Court 2021

14. Applicable Statutes

Statute NameJurisdiction
Legal Profession ActSingapore
s 111 of the Legal Profession ActSingapore
s 113 of the Legal Profession ActSingapore
s 2 of the Legal Profession ActSingapore
s 112(4) of the Legal Profession ActSingapore
s 113(3) of the Legal Profession ActSingapore
s 113(5) of the Legal Profession ActSingapore
s 113(2) of the Legal Profession ActSingapore
s 85(3)(a) of the Legal Profession ActSingapore
s 120(3) of the Legal Profession ActSingapore
s 120(1) of the Legal Profession ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Contentious Business Agreement
  • Legal Costs
  • Overcharging
  • Letter of Engagement
  • Professional Fees
  • Disbursements
  • Settlement Sum
  • Expert Fees
  • Solicitor-and-Client Costs
  • Separate Legal Representation

15.2 Keywords

  • legal costs
  • contentious business agreements
  • overcharging
  • legal profession
  • Singapore
  • negligence
  • medical malpractice

17. Areas of Law

Area NameRelevance Score
Assessment of Legal Costs90
Overcharging80
Legal Ethics and Professional Responsibility75
Contentious Business Agreements70
Civil Litigation60
Corporate Law20
Family Law10

16. Subjects

  • Legal Costs
  • Professional Misconduct
  • Contentious Business Agreements
  • Solicitor-Client Relationship