Carrying legal fees has skyrocketed, MyCC said

PETALING JAYA: The recent increase in conveyancing legal fees has been questioned by the Malaysia Competition Commission (MyCC).

In a statement on Monday (July 17), MyCC chairman Datuk Seri Mohd Hishamudin Yunus (pic) called the increase untimely given the current rising cost of living.

His full statement is below.

The Malaysia Competition Commission (MyCC) is looking into the recent increase in conveyancing legal fees by the Solicitors’ Costs Committee under the newly enacted Solicitors’ Remuneration (Amendment) Order 2023 [P.U. (A) 207/2023] with deep concern. From MyCC’s point of view, this Amendment Order, which will take effect on Saturday, July 15, 2023, is not timely especially when citizens are struggling with the rising cost of living.

Although MyCC recognizes that, strictly speaking, section 13 of the Competition Act 2010 excludes the Amendment Order from the purpose of the Act, however, with respect, MyCC believes that the action taken by the Bar Council against the spirit of competition. This increase is not the first as the Bar Council previously increased their conveyancing fee in 2017 through the Solicitors’ Renumeration (Amendment) Order 2017 [P.U. (A) 67/2017].

MyCC has actively taken positive actions to address the issues of fixed scale fees by professional bodies since 2013. Through the Market Review on Fixing Prices/Fees by Professional Bodies conducted under section 11 of the Competition Act 2010 to 2013, MyCC successfully directed or influenced more than 5 professional bodies to dismantle their fixed professional fees when it was found that they were not empowered by law to do so. However, the same market analysis also recognizes that there are professional bodies that are allowed to fix their scale fees in accordance with the powers granted to them by their governing laws.

Despite the above, MyCC, since 2015, has continued to engage with professional bodies and has decided to focus on the Bar Council with the aim of establishing a precedent, where if the Bar Council agrees to dismantle its fixed conveyancing fees, other professional bodies have also adopted a similar approach. The approach adopted by MyCC is in line with the practices of developed countries such as the United Kingdom, Singapore and Australia, where professional bodies, including their Bar Councils, have moved away from fixing fees. MyCC was further encouraged by the fact that fixed conveyancing fees were discussed at length by the Special Task Force to Facilitate Business (PEMUDAH) in their previous meetings.

The imposition of fixed conveyancing fees appears to be inconsistent, especially when considering that litigation fees in Malaysia, are not subject to fixed rates. Furthermore, MyCC believes that the action taken by the Bar Council seems to contradict the government’s efforts to improve housing affordability for citizens. Initiatives such as Memorandum of Transfer (MOT) and stamp duty exemptions or discounts, Real Property Gains Tax (RPGT) exemption, and Housing Credit Guarantee Scheme (HCGS), while being implemented to specifically stimulate the housing industry, is also intended to mitigate the impact of rising living costs on target groups.

MyCC seeks to create a more flexible fee structure in line with international best practices. Additionally, MyCC believes that consumers will be better protected when industrial policy differentiation takes into account the principles of competition.

“We acknowledge that our previous efforts to persuade the Bar Council were unsuccessful. However, we respectfully urge the Bar Council to reconsider, or at least, delay the implementation and continue the discussion with us. The Bar Council has the undeniable potential to set a positive example by promoting competition within the market.

MyCC has received visits from various professional bodies and traders’ associations who have sought our support for their proposals to fix fees or prices for their products and services. However, this approach does not bode well from MyCC’s perspective. These bodies should strive for creativity and innovation to promote market efficiency, rather than relying on fixed scale fees.

We must move away from this approach if we aim to be a prosperous nation with a strong and stable economy dependent on a dynamic market that encourages innovation, efficiency, and competitive pricing practices,”

Datuk Seri Mohd Hishamudin Yunus

MyCC chairman

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