Investigation into unfair legal fees

Lawyers say individuals are being denied fair access to legal help because companies can offset their fees against tax.

FRANCE'S constitutional court is to launch an investigation into lawyers' fees following a complaint that the current system gives companies an unfair cost advantage over individuals.

Lawyers argue that charging VAT on legal fees means that businesses get a better deal, because they can get the tax refunded - effectively giving them a 19.6% discount.

Companies' legal costs can also be offset as a business expense, bringing down the firm's tax bill - a saving of about 34%.

Lawyer Pierre-Olivier Sur is among the group of legal professionals who have asked the Conseil Constitutionnel to look at whether the current fees are anti-constitutional.

"A business can get 85% more legal advice than an individual for the same price," he told Les Echos.

"It's a bit like a duel in which one of the competitors has a metre-long sword and his rival's sword is 1.85 metres long."

The group argues that the pricing structure means individuals are not getting fair and equal access to legal help and are being denied a fair trial.

They say either VAT should be axed on legal fees - which would lose the state about €1bn a year - or individuals should be able to deduct the cost of their legal action as an allowable expense in their income tax return.

Since March this year, anyone in France has the right to challenge the fairness and validity of French laws with the country's top constitutional judges.

They can ask the Conseil Constitutionnel to check the validity of the law, no matter how old and established it is.