Background#
Recently, there has been a highly publicized case in the legal community: Bank A sued Company B for repayment and also requested that they bear the lawyer's fees. However, the judge did not support the lawyer's fees, citing reasons such as Bank A's lawyer not fulfilling their responsibilities.
The judge's basic reasoning for the ruling is as follows:
- According to the contract, Company B is responsible for the lawyer's fees. Based on the principle of fairness, Bank A should carefully choose their lawyer and not arbitrarily increase the costs.
- The lawyer made many basic errors during the representation process, such as errors in document number representation and a lack of understanding of the facts of the case.
- Bank A did not fulfill their obligation to carefully choose a lawyer, so Company B is not required to bear the lawyer's fees.
Most lawyers naturally hold a negative attitude towards these viewpoints, but there are not many serious discussions about it. Some even say that the court collected nearly 4 million in litigation fees but does not support a 50,000 lawyer's fee. This kind of comparison is clearly just rhetoric and does not have any logical significance.
What are the issues with the ruling?#
Firstly, there is an issue with the reasoning process. In cases where there is an agreement, for a lawsuit requesting lawyer's fees, the complexity of the case, the reasonableness of the amount, and whether it has actually been paid are generally considered. However, in this case, the judge bypassed all of the above and approached the issue of whether Company B should bear the lawyer's fees from the perspective of "moral risk," turning it into a question of whether the lawyer is worth the price. There is a stark difference between the two.
If we follow the usual line of thinking, this case is not complex, but the amount involved is nearly 700 million, and the lawyer's fee is only 50,000, which is a rate of 0.007%. This is basically a bargain price, no matter how you look at it. Moreover, from the lawyer's mistakes listed by the judge, it does show a lack of professionalism and carelessness, but it does not amount to a major mistake and did not cause any loss to the client. It is clearly inappropriate to directly conclude that Company B does not have to bear the lawyer's fees.
Even if we follow the judge's three-step reasoning, the first step is the major premise, which I agree with. This is similar to the "moral risk" in insurance: after purchasing car insurance, some people may not lock their cars or choose to drive more, thereby increasing the risk of the car being stolen or getting into an accident. The second step is a minor premise, which is a factual issue, and I don't have much objection to it. However, it cannot be directly applied to the major premise. Unlike the example of a car, Bank A had no control over the lawyer's subsequent actions when they entrusted the lawyer. On the contrary, they chose a lawyer with an extremely low price, and the result also met their expectations. They were truly saving money for the defendant, Company B!
Issues beyond the ruling#
The lawyer's fee is so low that it can be basically confirmed that Bank A entrusted the case through a bidding process, and the bidding criteria were most likely the lowest price. When the price is low, the quality is naturally compromised. After checking, it was found that the two lawyers representing Bank A have been practicing for 15 and 10 years, respectively, so they are not newcomers. They must have other cases with higher profits, so they must have invested very little effort in this case, and making basic errors was almost inevitable. Although it is impossible to absolve the lawyer of responsibility, as an outsider, it is important to not only watch the show but also understand this harsh ecosystem.
In addition, there is another interesting question. From Company B's perspective, would they prefer Bank A to hire an excellent lawyer to beat them up or hire a mediocre lawyer to increase their chances of winning? From this perspective, this ruling appears even more awkward.