As our goal is to provide you, our clients, with legal services at the highest achievable professional level, we consider one of the basic conditions to achieve this goal to be the highest possible degree of trust between you, as our client, and us, as legal assistance providers, including maintaining you fully informed about the basic issues connected with performance of legal profession.

We are convinced that mutual trust must be established and built from the very beginning of our cooperation which starts from your decision to approach us and use our services. In order to have enough information for your decision-making processes as well as assessment of our attitude to you, we have prepared for you a summary of the general information relating to provision of legal services in the Czech Republic. The individual parts include information concerning remuneration and compensations of advocates (solicitors), awarding of compensation for costs of proceedings, nature and content of the relationship between the advocate and the client as well as some measures interfering in the relationships between the client and the advocate in the public interest.

We do believe that the below specified information will serve to you as the basis for your further decisions as well as for assessment of the facts specified by us in Remuneration.

General information about remuneration and compensations for advocates

In Act No 85/1996 Coll. on legal profession, as amended, the stipulation of the amount or way of determination of remuneration for an advocate for legal services (counsel fee) is basically made by agreement between the person interested in provision of the legal service and the advocate approached by them and it is therefore governed by the contract concluded by and between them (so-called contractual remuneration). Specifically, as regards agreements about contractual remuneration, quite usually you can come across "hourly" remuneration (time-based remuneration) or "lump-sum" remuneration (task-based remuneration) which is connected with achievement of a certain legal situation or another goal or with efforts spent on this achievement, regardless the amount of the time actually spent on it. As regards the hourly remuneration, the client is entitled to ask the advocate to prepare a statement for the remuneration amount, i.e. an outline of the tasks performed by the advocate in favour of the client. And a commenced particularly agreed time period particular in which the advocate's task was being performed is always counted, according to the concluded contract. If lump-sum remuneration was agreed, then the advocate is entitled to the amount agreed for a particular time period regardless the time demanded for the tasks carried out by the advocate. Despite the advocate's remuneration being agreed in this way, it only includes the tasks which are subject matter of the agreed legal service. If the advocate performs tasks for the client also in another matter or tasks not included in the lump-sum remuneration, the advocate is entitled to charge for these tasks beyond the lump-sum amount.

You can also find e.g. proportionate remuneration tied with the revenue (the value or result) of a certain case or so-called "lump-sum" or "budget" which represents an amount agreed for a particular time regardless the amount of the cases or matters solved during that time or aiming to achievement of a certain goal regardless the actual demands of the performed tasks of legal assistance. It is also common to combine the above specified ways of advocate's remuneration.

In all the cases, the client should always realise that principally, as regards origination of the advocate's title for remuneration, the main criterion is not achievement of the expected result (solicitor's remuneration is not result based) but exerting all their possible efforts which can be required from the advocate and which are aiming to the desirable result. Therefore, unless agreed otherwise between the advocate and client, even if an advocate does not manage to achieve the aim expected by you despite exerting all the possible efforts, the advocate is entitled to the agreed remuneration.

Besides remuneration for legal services, the advocate is also entitled to request so-called compensations. It is a lump-sum compensation for the lost time and compensation for the out-of-pocket expenses (overheads) spent purposefully, all this again principally according to the contract with the client. The out-of-pocket expenses include mainly the court and other fees (duty stamps), travelling expenses, postage and telecommunication fees, vidimation and legalization, translation, price of expert opinions and other professional statements which were spent by the advocate in connection with provision of the legal service to the client. An advocate is entitled to compensation for lost time mainly for tasks performed outside the registered office of the advocate and for the time spent travelling there and back as well as for any delays with commencement of proceedings before the court or another public authority, their cancellation or adjournment without negotiating of the matter.

The above specified might suggest that negotiation of remuneration of a advocate is totally up to the will of the parties, but in reality it is not the case. While a person interested in legal services has no limits when negotiating the remuneration, despite the above declared freedom, an advocate has to take into account mainly the legal regulations binding for advocates and issued by the Czech Bar Association (CBA) (professional regulations) which include ethical principles, ban of certain agreements in favour of a client and rules of competition for advocates (adequate remuneration etc.). It is also necessary to add that a person interested in a legal service is always entitled to ask for a contract to be concluded in writing as well as to consult such a contract (favourability of its conditions) with another independent advocate.

In case contractual remuneration has not been agreed and the parties agree on provision of a legal service, so-called out-of-contract remuneration (tariff) shall be applied and its amount, or the way of its calculation is stipulated by the Ordinance of Ministry of Justice No 177/1996 Coll. on remuneration and compensations for advocates for provision of legal services, or so-called advocate's tariff. Calculation of out-of-contract remuneration is based on so-called tariff values of the individual (typical) legal service tasks enumerated in the ordinance regardless their time demands.

We have to point out that if an advocate is a value added tax payer, the advocate is obliged to add this tax to the calculated remuneration and possible costs and to pay the tax at the corresponding amount. The total charged amount therefore must be increased by the corresponding rate of the value added tax.

About compensation of costs of proceedings and contractual remuneration

It is necessary to add that if advocate's remuneration was agreed for representation in proceedings before court or another public authority body, that when determining compensation of costs for the legal representation (if at least one participant is entitled to it) the compensation of which is awarded to the client by a decision of the court or another body (predicate), the agreed advocate's remuneration as a cost of the proceedings of the client will not be taken into account and its amount will be acknowledged according to the advocate's tariff. Calculation of the costs of proceedings based on representation of a participant by advocate made by a public authority body is thus based on the amounts specified in the advocate's tariff (according to the number of tasks carried out by the solicitor).

Basically, as regards the costs, a public authority body can thus award to the participant of the proceedings only the amount specified in the advocate's tariff, not the amount (remuneration) which the participant really spent on the particular legal service. A person interested in legal service based on representation in proceedings when compensation of costs may be awarded should ask the advocate about this and take it into account when negotiating the remuneration.

About the nature of relations between the advocate and client

Basically, it is possible to say that while an advocate is a person who achieved the prescribed education, completed his/her legal practice and his/her professional experience and knowledge have been duly verified by the Czech Bar Association (CBA) during a advocate's test and therefore it is a person who should know and understand law (is professionally capable of providing legal assistance), a person interested in legal service and the advocate's future client is usually a person who perceives law rather spontaneously and requires legal aid for achievement or protection of their interests. These aspects turn the relationship between an advocate and his/her client into specific relationship based mainly on their mutual trust, which bring a number of obligations for the advocate. Existence and duration of their mutual trust is a crucial precondition for continuing of the relationship between the advocate and the client. Its absence or later partial or complete loss should principally lead to termination of provision of legal assistance by the advocate.

The relationship between the advocate and the client is based on the fact that the advocate provides legal aid to the client as an independent, unbiased (impartial) person who protects and enforces the interests of the client, acts according to the client's instructions and maintains strict confidentiality concerning all the facts the advocate learns about during this. The client should provide the advocate with timely and complete information about his/her matter, submit complete documents for solution of his/her mater and take into account his/her recommendation. Besides that, the client should inform the advocate about the nature of his/her interests in order to enable the advocate to choose a corresponding strategy or perform tasks of legal services in time. It is a usual practice that if according to the knowledge and practice of the advocate, enforcing of the client's interests is connected with an inadequate risk or if the client waives the required standard of legal protection for his/her interests, that the advocate will inform the client about the connected risks.

In this connection it is necessary to add that even though the basic obligation of the advocate as the mandatary is to follow the instructions (orders) from the client, the advocate is not obliged to perform the instructions if they are in contradiction with legal or professional regulations. In some cases, the advocate is even ordered by law to refuse an instruction from the client or to delay its fulfilment. Therefore we recommend discussing the content of the mandate and the individual aspects of the expected legal aid with the advocate in advance in order to prevent such situations which weaken the nature of the mutual relations.

Special interests of the client and their enforcing by the advocate

Special interests of a client may include interest in acquisition or transfer of a certain item or right or another advantage with a person (persons) selected in advance as counterparty (propriety interests). In these situations, the relationship between the advocate and client is determined a priori by this special interest of the client when the advocate becomes de facto an intermediary between the client's interest and subject matter of the interest (e.g. a certain real estate). In these situations, however, the above described principles will be applied when the advocate protects rightful interests of the client which also include achievement of the necessary degree of his/her legal protection, or an effort to avoid a situation when the client's rights would be with absolutely no legal protection, and therefore the advocate must attempt to enforce these principles even if the goal desired by the client will not be achieved after all. A reason for such a procedure, besides the actual reason for engaging an advocate in the matter, is mission of the advocate as a person independent of the subject matter of the client's interests in order to achieve the required degree of legal protection and prevent possible disputes in which the client would be left without legal protection for which he/she basically asked. Therefore when giving instructions to the advocate, the client should always take into account his/her recommendations, even in cases when his/her special interests are not achieved (e.g. real estate is not acquired).

Advocate's liability and insurance

When providing legal assistance (legal services), an advocate is obliged to proceed with professional care corresponding to their qualification and exert all the efforts (appropriate attitude) which can be reasonably required from the advocate in order to protect the client's interests as much as possible and to provide the client with the achievable legal protection. We can state that such an attitude is naturally expected by the client and with awareness of these facts the client also entrusts its matters to the advocate. The law therefore outlines special liability and connected obligations of the advocate. Besides others, the advocate is also obliged to maintain indemnification for liability for damage caused during provision of legal services (performance of legal profession). The minimum insurance coverage differs according to the way of performance of legal profession (an independent advocate or various associations of advocates) and according to the type of the provided legal services. As an example we can state that an individual advocate or association of solicitors are obliged to have indemnification at the amount of CZK 3,000,000 per an advocate (each member of the association). This basic amount of insurance then covers almost all the areas of applicable law, only in case of law of exchange, the advocate is obliged to arrange an additional insurance.

With regard to the range of the services provided by us and significance of interests of our clients, we are insured for the total amount of CZK 10,000,000 for each case of a mistake and solidary liability, including application of law of exchange.

Advocate's duty of confidentiality and its exclusions

Due to the nature of their profession, an advocate has a statutory duty of confidentiality from which the advocate can only be released by the client or his/her legal successor. Even in such cases, the advocate is obliged to maintain confidentiality if it is clear from the circumstances that the client or his/her legal successor released the advocate from this obligation under pressure or in distress. Advocate's duty of confidentiality survives even after his/her licence for performance of legal profession ceases to exist and it includes all the facts about which the advocate learnt in connection with provision of legal services to the client. With regard to the needs of the advocate's business, this obligation is stipulated by law also for his/her employees. An advocate as an employer should require observance of this obligation from his/her employees in an appropriate manner.

However, the advocate's duty of confidentiality will not be applied in case of certain measures aimed at prevention of criminal activities stipulated by law or by a legal norm of a higher legal force. Typically, except the below specified cases, these include e.g. an obligation of the advocate to prevent commitment of a criminal offence when the advocate is obliged to prevent commitment of a criminal offence in the phase of their preparation in case of criminal offences specified in law or to report their preparation to the prosecution bodies.

Finally, from a somewhat different point of view, it is necessary to mention an initiative of the client to release the advocate from the duty of confidentiality in relation to other entities performing activities for the client (e.g. auditors, accountants and other expert advisers etc.), which is desirable in some cases when on the contrary a mutual exchange of information between the advocate and persons engaged by the client is desirable for protection of the client's interests or when it is often necessary for provision of the services by the advocate. However, even this release from the advocate's duty of confidentiality should be included in the contract with the advocate or should be expressed otherwise in writing.

About measures against legalisation of revenues from criminal activities and financing of terrorism and about competences of proving executor

Advocates belong in a group of so-called obliged entities to which some specific obligations apply which are stipulated by Act No 253/2008 Coll. on some measures against legalisation of income from criminal activities and financing of terrorism (act on money laundering), as amended, and in relation to it also by the issued professional regulation. We have to point out that these specific obligations, which are, however, connected only with some activities of a solicitor, represent interference in the advocate's duty of confidentiality and they represent an interference in the client's privacy; all this in the interest of declared fight against legalisation of income from criminal activities and financing of terrorism through the financial system (in the public interest). However, an advocate is an obliged person only if he/she performs so-called monitored activities. These include activities based on custody of money, securities and other assets of the client and also services based on acting on behalf of the client or on his/her account during (i) sale and purchase of real estate, company or its part (ii) administration of the client's assets and opening of bank accounts (iii) establishment, management and operation of trading companies, business groups or similar entities and gaining (gathering) funds for these purposes and (iv) activities aimed at flow of funds or its direct initiation, mainly collection, payments, transfers, deposits or withdrawals within cash and noncash payment system.

If an advocate is a participant of statutorily qualified business, before its performance (unless a statutory exception is applied), the advocate is obliged to identify the client or his/her representative/attorney. Within this, the solicitor may copy submitted documents, process the obtained information and file it and the client is obliged to provide the required cooperation to the advocate. Besides identification of the client, in statutorily identified cases, the advocate is also obliged to perform checks of the client in the extent specified by law unless a statutory exception applies to the client, and to report every suspicious case to the Czech Bar Association, or in case of some transactions, to delay the client's order minimum by 24 hours after such a report is made.

However, a advocate does not carry out inspection of the client or reports if it is information about the client which the advocate obtained from the client or otherwise when providing legal services, mainly legal advice (consultations) and representation before courts.

Another case of interference in the advocate's duty of confidentiality is stipulated by Act No 120/2001 Coll. on proving executors and distrainment activities and on change of some other acts (distrainment regulations), as amended, within the statutorily ordered obligation of the advocate's cooperation with the proving executor when performing distrainment activities. Upon a written request from the executor, within the scope of the distrainment activities the advocate is ordered to provide the executor with the data concerning the account numbers of the client as the obliged party, as well as their balance and changes on them. An advocate is also obliged to inform the executor about the client's assets, his/her items, deeds or registered securities if the advocate administers the specified assets of the client or has it in his/her custody. However, it is conditioned by the fact that the client is specified in the request as the obliged party (debtor) and the executor submits to the advocate an order to perform the distrainment of the assets of the client as the obliged party and only in connection with its performance (forced performance of the distrainment right).