5 -
New entrants to the solicitors' profession cannot compete for conveyancing work with existing solicitors by offering more cost- effective services;
The system encourages some solicitors to act unethically, by undercutting scale fees in order to get business;
The artificial level of conveyancing fees distorts the market for other legal services that are subsidised by conveyancing fees;
There is no satisfactory way to fix the fees scales; and
There is no reason why the profit levels of conveyancers should be artificially maintained by statutory rules.
Another report, entitled "The Abolition of Scale Fees for Conveyancing in England" demonstrates the fallacy of using the English experience of abolition to support retention of scale fees in Hong Kong. At the same time, myths and misconceptions on scale fees that have circulated have been identified and they are refuted as follows:
Arguments of Principle
Myth 1
Fact 1
Myth 2
Fact 2
Statutory scale fees are long-established and work well.
Statutory scale fees were only introduced in Hong Kong in 1970, just two years before they were abolished in England.
Scale fees have prevented consumers of conveyancing services from enjoying price competition, and are unfairly charged on the basis of the price of the property, not the value of the work done.
Scale fees prevent overcharging.
A mechanism for preventing lawyers from overcharging is already in place for other types of legal work and would apply to conveyancing if scale fees were abolished.
If the true purpose of scale fees was to prevent overcharging, this could be achieved by setting maximum fees, instead of compulsory fees.