New law on professional fees in the City of Buenos Aires

On November 27, 2014 Law No. 5,134, which regulates lawyers’ and solicitors’ fees who work in the City of Buenos Aires (hereafter the “Law”), was published in the Official Gazette.

The Law, which was promoted by Jorge Rizzo and Daniel Lipovetsky from the City of Buenos Aires’s Bar Association (“CBABA”), was approved in a special session obtaining thirty-two (32) votes in favour from legislators of the following political parties: PRO, Socialism, ‘Coalición Cívica’ y.’Confianza Pública’. However, legislators from other political sectors as, for example, the governing party issued fourteen (14) votes against the project. There were, at the same time, eight (8) abstentions.

The new legislation has got sixty-three (63) Sections and replaces the application of Law No. 21,839 governing the matter at national jurisdiction. The main features of the recent legislation are the following:

• Concerning the application scope, the Law rules attorneys’ and solicitors’ fees which come from their professional activity developed in the jurisdiction of the City of Buenos Aires. However, professionals that are hired permanently or have a dependency relationship with their clients are excluded from this regulation except in the case of matters unrelated to their contract or relationship as well as when there is a cost’s conviction against the other party or parties unless contrary agreement.

• The Law establishes that the professional activity of lawyers and solicitors is presumed onerous. Moreover, this legislation determines professional fees have alimentary nature. Therefore, they are personal, enjoy special privilege and can only be attached to a twenty percent (20%). If the amounts do not exceed the Minimum Wage they are immune from seizure.

• In order to update professional fees in accordance to inflation rates, the Tariff Unit of Measure (“TUM”) is established. The TUM is the unit used to determine, in certain circumstances, the minimum fee for attorneys’ and solicitors’ professional work. The TUM represents the one point five percent (1.5%) of the total remuneration paid by the First Instance Judge in the City of Buenos Aires. That amount is defined as the sum of all items, including the bonus for five (5) years of practise in the exercise of the profession. The Judicial Council of the City of Buenos Aires must report the value of the TUM monthly.

For example, in relation to non-pecuniary judicial matters TUM is determined as follows:
– Contradictory divorce, adoption and criminal matters: 30 TUM;
– Misconduct issues: 15 TUM;
– Misdemeanours issues: 20 TUM;
– Administrative and / or tax matters that can not be valued in money: 40 TUM.

With regard to extrajudicial matters, we may find these TUM valuations:
– Verbal Inquiries: 0.5 TUM;
– Drafting registered letters: 1 TUM;
– Procedures before the General Inspection of Justice or similar institutions in Buenos Aires 
City’s jurisdiction: 5 TUM;
– Customer assistance and advice in performing legal acts: 3 TUM.
– Drafting of contracts: from 2 to 8 TUM
– Drafting of criminal charges without lawyer’s signature: 3 TUM.
It is important to note that although much of professional work is quoted by the TUM the Law stipulates general guidelines for determining fees. For example, for performances developed at the First Instance’s stage to sentencing professional fees are fixed between eleven and twenty-five percent (11% and 25%) of the total trial amount. In turn, in the case there is a joint litigation honoraries shall be regulated in proportion of each co-party interest (however, fee regulations may not go beyond a fifty percent (50%) resulting from the corresponding tariff scale).

• The Law determines that any person, whether natural or legal, must be prevented from using the title “law firm”, “legal clinic”, “legal advice office” or similar. Beyond the criminal penalty, the CBABA may require the office’s closure and may impose a fine based on 30 TUM to Law violators.

Law No. 5.134 was enacted on November 6, 2014 and entered into force on November 27, 2014 by its publication on the Official Gazette.