A legal services contract simply quoting an hourly rate, without any estimate of the cost of the matter, does not satisfy the requirement of being drafted in plain intelligible language, the Court of Justice of the EU has ruled.

The decision, in DV v MA, will not directly affect the regulations covering legal pricing transparency in England and Wales. However Gazette columnist Jonathan Goldsmith points out today that the ruling, on a point of EU consumer law, illustrates some of the difficulties posed by the government's Retained EU Law Bill.

DV originated in Lithuania where a consumer client agreed five contracts over family matters. The client was quoted €100 for each hour of consultation about of provision of legal services. She then challenged a bill for €9,900 in fees and €194.30 in disbursements under legislation covering unfair contract terms. The case eventually reached the Supreme Court of Lithuania, which asked the CJEU to interpret provisions of EU consumer law, in particular with regard to the requirement that a term in a contract be drafted in plain intelligible language.

Finding that a term in a contract for the provision of legal services must be drafted in 'plain intelligible language', the court said that the contract should set out information 'so that that consumer is in a position to evaluate, on the basis of clear, intelligible criteria, the economic consequences for him or her which derive from it'. 

A contract stating merely an hourly rate does not meet this requirement for plain intelligible language because the client does not have enough information to take a 'prudent decision', the court ruled. It ordered national courts to interpret the legislation accordingly. 

Goldsmith notes that, in England and Wales, Solicitors Regulation Authority rules already state that a lawyer should generally provide the best information possible.

 

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