Buying legal services is no different than purchasing any other type of service, or even a consumer product. Before making a choice you will have identified the best, or most affordable, option in the market place and will then have made a contract with the seller of those services.

Unlike the purchase of other services, however, attorneys and clients often find it difficult to discuss legal fees. Today's column will set out the general basis of charging by attorneys in Bermuda for contentious and non-contentious business, and will also address the typical requirements of an attorney when accepting a client's instructions.

Clients often seem intimidated at the prospect of dealing with an attorney, and rarely address the issue of cost. My view is that an attorney has a duty to properly advise his clients what his charging rate is at the outset of instructions. Often, he will be in a position to give an estimate of the likely cost of the transaction and whether there is anything which would affect the amount of the attorney's charges. Once retained, attorneys will generally provide their client with a letter setting out the terms of their engagement. That letter should identify the attorney and any staff member who will assist in handling the matter on behalf of the client. It should also outline the action to be taken by the attorney on the client's behalf, as well as what steps the client has to take with regard to further information. Finally, it should, if possible, estimate the likely duration and cost of the matter.

The attorney will generally require a retainer before commencing work. An attorney may subsequently bill a client, deducting the amount of the bill from his trust account that will house the retainer. The retainer might instead be used for the payment of disbursements as and when they arise, or the attorney could ask for a retainer and continue to bill the client on a regular basis and at the end of the matter return the retainer as appropriate.

The purpose of the retainer is not just to benefit the attorney. The retainer also focuses the client on the matter at hand. It is advisable for a client to understand at an early stage that certain actions are costly and will require an ongoing commitment.

Legal aid is available in Bermuda, but only in certain circumstances - for example, it is available for any person charged with an indictable offence. The applicant for legal aid is means tested. If the applicant has a disposable income of less than $12,000 a year and a disposal capital of no more than $10,000, that person shall qualify for legal aid. Legal Aid will discharge the attorney fees of the attorney subject to an approved scale. Any application for legal aid will be considered not only by the Legal Aid Officer but also by the Legal Aid Committee. Legal aid may also be available subject to a contribution by the assisted person. Legal Aid is available for civil matters, mainly claims for damages arising out of personal injury or "family" matters including but not limited to child custody, access, care orders, divorce, child support, spousal support and property adjustment.

The Legal Aid Committee may also continue legal aid in the Courts of Civil Jurisdiction (the Supreme Court and the Court of Appeal) and in respect of appeals to HM Privy Council, subject to review and assessment. In civil proceedings, the legal aid authority is entitled to a charge upon all or any monies recovered in excess of $5,000. For example, if a client wins a judgement in the amount of $15,000 and the case had actually cost the Legal Aid Fund $10,000, the Legal Aid Fund would be entitled to repayment of its actual costs. The successful litigant would also be entitled to an order for costs against the losing party. At critical stages, both in relation to private fee paying clients and legally aided clients, there is a review process. With a private fee paying client this is an ongoing process, and is assessed on a monthly basis whenever the attorney renders his account. With regard to legal aid, the Legal Aid Officer and Committee receive reports after a set number of hours work have been incurred by the attorney.

There is a different process of charging in relation to the sale and purchase of property. Attorneys' fees and charges in sale and purchase transactions are generally the subject of scale fees recommended and approved by the Bermuda Bar Association. Where there is no recommended scale fee in respect of a certain part of a transaction then, generally, charges will accrue on a time-spent basis at the attorney's general charging out rate.

Next week, I will deal with the costs recoverable from a losing party in litigation and what to do if the relationship between attorney and client breaks down as a result of the costs being charged by the attorney.

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Attorney Kelvin Hastings-Smith is Manager of the Litigation Department at Appleby Spurling & Kempe. Copies of Mr. Hastings-Smith's columns can be obtained on the Appleby Spurling & Kempe web site at www.ask.bm. This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.