Singapore’s highest court has suspended a lawyer from practice for six months for champerty, the first sentence for the offense in the city-state in 35 years.
The common-law tort and crime of champerty—in which a non-party acquires an interest in the outcome of a lawsuit—has been decriminalized or largely abandoned in many Western jurisdictions, allowing the rise of modern litigation funding.
In its sentencing last Thursday of lawyer Rengaraju Kurubulan, Singapore’s Court of Appeals noted such developments but said it would be up to the island nation’s parliament to decide if they wanted to change Singapore’s current law barring champertous agreements.
“We wish to emphasize that until and unless there is a change in the law, lawyers who enter into champertous agreements can expect to face at least a substantial period of suspension,” Chief Justice Sundaresh Menon wrote in the court’s 45-page decision, “and depending on the factual matrix this period could well exceed the present imposition of six months.”
The case against Kurubulan, who has been admitted to practice in Singapore for 15 years, stems from a 2006 agreement with Ho Shin Hwee to bring a lawsuit in Brisbane, Australia, over injuries Ho had suffered in an automobile accident there. The Singaporean lawyer bankrolled the case, which was handled by Australian firm Creevey Russell Lawyers, in exchange for 40 percent of any settlement or award over $276,000.
Ho reached a settlement with the insurer for just under $3 million in 2011, after which Kurubulan sought to collect about $1.1 million from her. But Ho refused to pay, after which the lawyer threatened suit against her in Australia and Singapore. She responded by filing a complaint against Kurubulan with the Law Society of Singapore, which brought the champerty claim against him.
Before the Law Society’s Inquiry Committee, Kurubulan argued that he was not acting as an attorney to Ho but rather in a personal capacity, and therefore not subject to attorney discipline. However, the committee disagreed, citing a “warrant to act,” a document typically used when a prospective client engages a lawyer, wherein Kurubulan stated that his firm would act on behalf of Ho. Kurubulan also billed Ho for his services using the letterhead of his firm Kuru & Co., the committee noted.
A Disciplinary Committee hearing followed, at which Kurubulan was charged with breaching Section 107(1)(b) of Singapore’s Legal Profession Act, which forbids champerty, and grossly improper conduct in the discharge of his professional duty under Section 83(2)(b) of the act. He pleaded guilty, and the matter went before the Supreme Court, which handed down the six-month suspension.
The court did stress that it would not be champertous for a lawyer to agree to represent an indigent client with an understanding that the former could only be paid fees or disbursements in the event of a successful outcome.
“In such a case, in truth, the Advocate and Solicitor is putting aside his usual desire to be assured that he will be paid his fees in the interests of ensuring that the client is not denied the opportunity to seek justice,” the court said.