Consequences of a possible increase in the advocate's tariff

In recent months, the change of the Decree of the Ministry of Justice on the remuneration of attorneys and compensation of attorneys for the provision of legal services (the so-called attorney tariff) has become a significant topic. According to the Ministry of Justice, the aim of this amendment is to adjust the remuneration of attorneys so that the amount of remuneration is adjusted to the inflation rate, the increase in the minimum wage, the average wage in the business sphere, the expenses for the remuneration of judges and prosecutors, as well as the professional demand of the activities undertaken and the level of responsibility of the attorney. 


Although at first glance it might seem that this change should not affect clients who have a contractually fixed advocate's fee, in the case of reimbursement of costs, the change would be really significant. In general, there are two ways of determining an advocate's fee. In the first case, the lawyer's remuneration for the provision of legal services is set out in the contract, either by agreeing a fee based on the number of hours or other units of time, or by a so-called success fee, where the lawyer is entitled to a certain proportion of the total financial benefit recovered or saved. 


In the second case, where the lawyer's fee is not fixed in the contract with the client, the fee is determined on the basis of the provisions of the Decree in question. However, this method of determining the advocate's remuneration is not very common, especially in large cities the current amount of the lawyer's tariff does not correspond to the actual costs at all. 


Since the vast majority of advocates' fees are fixed by contract, the greatest significance of any change to this Decree for clients lies in the compensation of the costs of the proceedings, which is calculated in accordance with the advocates' tariff. In general, the party who is fully successful in the proceedings is entitled to the compensation of costs. It is then for the unsuccessful party to reimburse the successful party for the costs necessary for the effective exercise or defence of its right. Given that there has been no change in the level of the advocate's tariff since 2006, the disproportion between the actual costs and the costs awarded by the court has steadily increased. To put this in perspective, the rate of inflation has reached more than 50% between 2006 and 2022. 


So not only is there a certain volatile 'price tag' on litigation for the successful party, but in the case of indigent people who cannot afford to pay any lawyer's fees before litigation, it is a significant barrier to justice and the ability to enforce their rights. In the current situation, it may not be at all unusual that failure to pay the costs of a lawyer in the event of successful litigation can lead to indigent people being denied legal representation even when the law is clearly on their side. 


Similarly, it is possible that a potential change in attorney's fees could help, for example, people who are assigned an advocate ex officio in criminal proceedings or people for whom an advocate is appointed as a guardian.


Although it seems more likely at present (after the inter-ministerial comment procedure) that the change to the decree in question will not take place at least by the planned date of 1 July 2023, when it was supposed to come into force. An attorney's fee in line with economic reality is an absolute necessity, even though it may not be a one-off and sharp increase as in the case of this amendment.