NSB lawyers take their bosses to court

The Court of Appeal on Friday issued notice on the Chairman, General Manager and the Directorate of the National Savings Bank in a case where nine Attorneys-at-Law attached to the Bank as legal officers and assistants have filed a writ challenging a circular by the Bank hierarchy to cut payment of the legal fees levied by the Bank in connection with transfer deeds executed by these officers.

Headed by the Assistant General Manager of the NSB, Mrs. T.M. Samarasinghe the nine attorneys have gone to court saying that the circular suspends the payment of 60 per cent of the 1% legal fees levied by the Bank to those legal officers who execute those deeds.

Senior Counsel for the petitioners, Upul Jayasuriya submitted that it was illegal for anyone other than a lawyer to levy legal fees, and that this prohibition applied to individuals as well as institutions. He cited the Intermeddlers with Suitors Ordinance which expressly prohibited those not authorised to practice in any Court, to solicit or receive from any person any gratification in consideration of procuring or having procured the employment of a legal practitioner.

This is to protect both the rights of a legal practitioner as well as the public, he said because the legal practitioner is bound by the rules of the Supreme Court unlike any other individual or institution. Mr. Jayasuriya also cited the Notaries Ordinance which similarly stipulated that only notaries are entitled to charge fees in respect of notarial executions.

He submitted that under the Banking Act, Banks are issued a Banking licence by the Central Bank to carry on with "Banking Business", and no other business. If they violate that, a Bank is liable to have its licence cancelled. Court was told that NSB is charging annually some Rs. 30 million by way of legal fees in respect of the mortgages that are executed. This amounts to almost 10 per cent of the services that a legal officer is expected to discharge, and therefore, the balance salary of a legal officer amounts to 90% of his or her net salary.

The Bank's customer pays for the legal fees provided by the lawyer and not the Bank, which is not entitled to charge fees. Mr. Jayasuriya said that commercial banks are earning in the region of Rs. 2,000 million by way of legal fees annually from customers and that a Bank can request the legal officer to pay a sum in return for the facilitation of secretarial services that are being provided by the Bank, but that has to be prorated and agreed with the Attorney-at-Law.

Notice was issued on the NSB returnable on February 8. The matter came up before Justice K. Sripavan and Justice Rohini Perera. Mr. Upul Jayasuriya appeared for the petitioners, all members of the Colombo Law Society together with Mr. P. Radhakrishnan and Mr. Wijaya Gamage instructed by Samararatne Associates, Attorneys-at-Law.