A LANDMARK ruling will allow lawyers to take on clients with little or no means to pay their legal bills unless they win their case.
A Court of Three Judges has held that lawyers who do this will not be "wrong", in a drive to help more people get access to justice.
Champerty - when a lawyer agrees to help a client on the basis that he gets a share of the proceeds from a case if it is successful - is currently forbidden here.
There are public policy reasons for this - among other things, a lawyer who has a personal economic stake in the litigation and is not otherwise paid for his services faces "a potential and often acute conflict of interest".
However, the apex court for disciplining lawyers has now directed that such an arrangement for "impecunious" clients will not come within the professional conduct rules against champerty.
Indeed, Chief Justice Sundaresh Menon - who made up the court with Judges of Appeal Chao Hick Tin and Andrew Phang - said it would even be the "honourable" thing for a lawyer to do.
In such a case, he said, the lawyer is putting aside his fee concerns with the aim of "ensuring the litigant is not denied the opportunity to seek justice".
But the court also made clear that it is for Parliament to decide on any changes to laws regarding champerty. The process is known as the contingency fee system in the United States.
The court found support from case examples in England and Australia and said the lawyer had to be satisfied "in all honesty" that the "impecunious" client had a good case which would likely be litigated but for the lack of funds.
CJ Menon said existing Law Society practice directions do not apply to impecunious litigants who would not otherwise be able to afford lawyers and whose cases involve an "overriding public interest in ensuring access to justice".
The court's ruling underlines its ongoing concern about cost hurdles preventing some litigants from seeking access to justice.
At a conference in January, CJ Menon noted many who seek justice are hindered by the high cost of litigation.
"It is cold comfort to those who seek justice to say we have a great legal system if it is priced out of their reach," he said.
Lawyers yesterday welcomed the court's ruling and saw it as a first step in considering issues related to champerty.
Association of Criminal Lawyers Singapore president Subhas Anandan said: "There will be practical difficulties but if handled properly, then this will be the right direction."
The court had made the remarks in the course of explaining why it suspended lawyer M. Kurubalan, 55, for six months for entering a champertous arrangement with a client in which he stood to gain A$1.2 million (S$1.4 million) if he won the case.
The Singaporean lawyer had cut the deal with Madam Ho Shin Hwee, 25, in 2006 over a claim for a car accident in Australia which left her partially paralysed.
When lawyers there settled with insurers for A$3.25 million, he sought to get her to pay him 40 per cent.
She complained to the Law Society.
The A$1.2 million sought was at least 10 times what he could have charged for his fees.
Mr Kurubalan pleaded guilty in May this year to grossly improper conduct, in the first case of champerty here in more than 30 years.
In judgment grounds released yesterday, CJ Menon said that lawyers who go into such deals can expect to face at "least a substantial period of suspension".