Think. How much can you pocket

Think! If you win, how much can you pocket?

Let us say you win your Magistrates’ Court case. You know the debtor has the money, because you have checked before you started legal action. Say he owes you RM9,000 and you have a bill from your lawyer for RM5,000. The question is: how much of your RM5,000 lawyer’s bill can you recover from the debtor? The answer is: it depends how complex the proceedings were. If they were a lot more complex than the court scale allows for, then you will have to pay a big whack of your lawyer’s bill yourself.

Averaging over a lot of cases, the winner will recover about two-thirds of his lawyer’s bill. So if you are facing a lawyer’s bill of RM5,000, the loser will have to pay perhaps RM2,000 of this.

Result: of the original RM9,000 owed to you by the debtor, you actually pocket $5,000 (RM9,000 he pays you because he lost, plus RM2000 of your lawyer’s costs he pays you, less RM5,000 you have to pay your lawyer).

In a more complex case, you might only be able to recover RM1,500 towards your lawyer’s bill from the debtor, or even only RM1,000. Down go your final takings.

No matter what, you will end up a bit out of pocket. (Not to mention the time it has taken you.) You may win by default, before trial. But even if it does not go to trial, you still have to pay your lawyer. At different stages, the court may award you costs for this or that. But add them all up, and it may not cover what you owe to your lawyer.

With calculation like this, you can see why your lawyer always has an eye on costs, and will usually try to keep them under control.

NOTE: if you’re chasing a big debt – RM500,000, for example -- then you are in a different realm. You will be running in a higher court, one with a more generous scale of costs. Things are different there.

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