Billing lawyers: Bar Association Fees and Cross-Border Litigation in Europe

Billing lawyers: Bar Association Fees and Cross-Border Litigation in Europe

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On 5 December 2019, the Court of Justice of the European Union (“CJEU”) handed down its judgment in the interesting case of Ordre des avocate du barreau de Dinant v JN (Case C-421/18). This ruling considered whether a claim by a bar association for annual fees payable by a lawyer fell within the special jurisdiction in “matters relating to contract” under Article 7 (1)(a) of the Brussels I (Recast) Regulation (1215/2012). ( )

Essential facts

For anyone practicing as a lawyer in Belgium, registration with a bar association is a legal requirement under the Belgian Judicial Code (“the BJC”). The same statute then permits a bar association to levy contributions on its members.

The lawyer, JN, was registered with a bar association in Dinant. In the 1990’s JN took up residence in France but continued to pay his annual Belgian bar association fees until 2012.

In 2015, JN was chased for three years of outstanding fees. In a letter, the President of the Dinant bar association offered to reduce the amount of those fees to that of the insurance premiums paid by the bar association. As the CJEU noted, registration with the Dinant bar association “confers not insignificant advantages in terms of insurance” and that the fees payable to that association “are, in fact, essentially made up of insurance premiums”.

When these fees were not paid, proceedings were commenced in Belgium in 2017 for the recovery of €7, 277.70 (plus interest and costs). This was despite the fact the lawyer was domiciled in France.

The bar association claimed the Belgian court had special jurisdiction over the lawyer on the basis that the claim was a “matter relating to contract” under Article 7(1)(a) and Belgium was the place of performance of the obligation in question.

The lawyer challenged the jurisdiction of the Belgian court, arguing that registration with a bar association for the purpose of practicing as a lawyer was not contractual in nature, since it did not constitute the conclusion of a contract arising from the exercise of free will and freedom of choice, but was instead the accomplishment of an administrative formality and a legal obligation imposed under the BJC.

The CJEU’s decision

The CJEU, at its Delphic best, concluded that while claims for membership fees due to bar associations would not in principle fall within the scope of “civil and commercial matters” within the meaning of Article 1(1) of the  Brussels I (Recast), some fee claims might if they represented the product of contractual relations established between the bar association and its lawyers, and especially if they represented consideration for freely consented to services that the bar association had negotiated with a third party on advantageous terms for its members.

The Court decided that:

(1)       A dispute concerning a lawyer’s obligation to pay annual professional fees to      a bar association to which they belong, is a civil and commercial matter within the scope of the Brussels I (Recast) Regulation, but only if, in calling on that lawyer to perform that obligation, the bar association is not acting in the exercise of public powers falling outside the scope of the ordinary legal rules applicable to relationships between private individuals. That was a question for the referring Belgian court to decide.

(2)       The Belgian legislature had conferred on a body, the Council of the Bar Association, the power to oblige individuals who have joined that association to pay certain contributions. Therefore, an action by which a bar association seeks an order that one of its members pay the annual professional fees which they obliged to do, “is not, in principle, an action “in matters relating to contract” within the meaning of Article 7(1)(a) of the Brussels I (Recast) Regulation.

(3)       But that was not the end of the matter:

However, it cannot be ruled out that, in addition to the relations imposed by law, a bar association may establish contractual relations with its members. Thus, in so far as those fees constitute consideration for services freely consented to, including insurance services, which that bar association may have negotiated with a third party with a view to obtaining more advantageous terms for its lawyer members, the obligation to pay those fees would be of a contractual nature and, therefore, an action initiated with a view to ensuring that that obligation is performed would come within the scope of Article 7(1)(a) of Regulation No 1215/2012. It is for the referring court to ascertain whether that is the case in the dispute in the main proceedings”.

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