Rain on Spanish plan

An effort by the Spanish Bar Association to hamper the use of contingency or conditional fee agreements has been struck down on competition grounds by a court in Madrid.

The case arose after the General Council of Spanish Advocates approved an article in its ethics code which said fee arrangements dependent on the outcome of a case were allowed so long as they covered the costs if it failed.

It also said that lawyers could agree fixed hourly or periodical sums, but only if the amount constituted a 'fair and worthy compensation for the services rendered'.

The Court for the Defence of Competition ruled that the council had breached the country's Defence of Competition Act 1989 by 'adopting a collective decision to establish minimum lawyers' fees, thereby preventing them from being freely arrived at by negotiation between lawyer and client'.

The court said the minimum fees would prevent young, inexperienced lawyers from breaking into the market, and gave the council three months to modify the article and imposed a fine of 180,000 (113,400).

The Spanish Bar's European representative, Julen Fernandez, said it will appeal.

'We are not happy with this decision and believe it shows lack of understanding of the legal profession by the competition court, which has an economic background,' he said.

The Council of the Bars and Law Societies of the European Union said it would be considering this week whether to intervene, and to determine any possible impact on the rest of Europe.

Paula Rohan