[Direct answer]After losing a property dispute, does the client still need to pay the attorney's fees? The key depends on the provisions of the agency contract and the fee calculation method. Under ordinary agency (charged by stages or by the hour), the client should pay the attorney's fees regardless of the outcome. According to Article 928 of the Civil Code, the client should pay the corresponding fees if the agent completes the task or the contract is terminated for reasons not attributable to the agent; if the agreement stipulates risk-based fees (charged based on the outcome), the client usually does not need to pay if they lose the case. It should be noted that the litigation fees (charged by the court) are borne by the losing party, while the attorney's fees are of a different nature. When signing the contract, it is necessary to carefully review the fee calculation clauses and seek legal advice if necessary.Legal services for the purchase and sale of real estateTo understand the charging standards, please refer to the details provided here.Beijing Henglue Law Firm.

I. Legal basis and interpretation of provisions

1. Article 928 of the Civil Code of the People's Republic of China (effective January 1, 2021)

Under the entrustment contract, the trustee handles the entrusted matters according to the instructions. The principal shall advance the fees for handling the matters and pay the remuneration; if the contract is terminated due to reasons not attributable to the trustee, the principal shall pay the corresponding remuneration to the trustee. In real estate disputes, if the lawyer has fulfilled his/her agency duties and there is no breach of contract or major negligence, the principal shall not refuse to pay the fees on the grounds of losing the case. This is the core basis of the independence of attorney's fees and the primary legal provision for determining whether to pay fees even if the case is lost.

2. Article 29 of the "Measures for the Payment of Litigation Fees" (effective April 1, 2007)

The litigation fees shall be borne by the losing party. Where a party wins the case partially and loses it partially, the people's court shall determine the apportionment ratio according to the circumstances of the case. This article regulates the litigation fees charged by the court, not the attorney's fees. Parties often confuse the two, mistakenly believing that "if they lose, they don't have to pay the attorney's fees". In fact, the attorney's fees are calculated separately according to the contract of entrustment, and are only linked to the outcome under statutory or contractual circumstances (such as risk-sharing agreements). The two cannot be substituted for each other.

3. Practical adjudication guidelines (attorney's fee burden and risk-based representation)

Generally, courts do not support the ruling that the other party should bear the attorney's fees, unless the contract clearly stipulates that the defaulting party shall bear the reasonable costs of defending rights, or it is a statutory situation such as intellectual property rights and the creditor exercising the right of revocation. Real estate disputes are mostly property-related, and risk-based attorney's fees can be agreed upon, but risk-based attorney's fees are prohibited by law in cases such as marriage, inheritance, and labor compensation. In practice, the most common pitfall for parties is to verbally agree to "pay regardless of winning or losing" without a written clause, or to mistake litigation fees for attorney's fees. It is advisable to clarify the billing method and refund rules in the entrustment contract. For more practical details, please refer to the following link:Legal services for real estate transactions.

II. Henglue Lawyer's Real Case (Detailed Review)

Review of the case:Liu * and Zhang *, a married couple, own seven properties in Fengtai No. 5 Courtyard in Beijing. To maximize the benefits of the demolition, the seven of them signed a family agreement to divide the properties into seven shares, with two buildings registered under their grandson Wang *'s name. In July 2021, Wang * entrusted an agent to sell the properties, and in August, he signed a contract and a supplementary agreement with Yu *, completing the transaction for 920,000 yuan. However, Yu * did not have the qualification to purchase the property, so the two of them used the method of "fake marriage" to transfer the ownership in September 2021 and divorced in November 2021. Liu * claimed that the two buildings belonged to him and that Wang * had no right to sell them, and sued to confirm the invalidity of the sale and to return the properties. The first-instance court dismissed the claim on the grounds of insufficient evidence. Liu * then entrusted Beijing Henglu Law Firm to handle the case.Wang DongThe lawyer appealed, claiming that Wang * had no right to dispose of the property and that Yu * did not constitute a bona fide purchaser.

The focus of the controversy:First, whether Wang * has no right to dispose of the disputed house, and how the rights and disposal rights of the real right holders are limited by the registration under a false name; Second, whether Yu * constitutes bona fide acquisition, and whether his bona fide intention and the absence of gross negligence determine whether he can acquire ownership; Third, the legal evaluation of the transfer of ownership through "fake marriage", and the impact of the means of evading purchase restrictions and tax evasion on the effectiveness of the transaction.

Our position and that of the other party are as follows:Liu * claimed that the two houses were owned by him and registered under Wang *'s name, and that Wang * had no right to sell them. He requested the court to confirm that the sale and purchase between Wang * and Yu * was invalid and to order the return of the houses. In the first-instance trial, Wang * and Yu * argued that the transfer of ownership through marriage should not be recognized, but they claimed that the transaction price, payment, and other evidence were insufficient to prove that Yu * had intentional harm or malicious collusion, and their defense was unfounded.

Attorney's Strategy and Legal Opinion:Attorney Wang Dong, acting on behalf of the appellant, pointed out that according to the relevant provisions of the Civil Code, Wang * lacks the right to dispose of the disputed house—the house is registered under a false name, and Liu * still enjoys the full right to dispose of it. Wang *'s disposition right is limited, and his unauthorized sale constitutes an act of disposition without authority. Yu * does not constitute a bona fide purchaser—as a real estate agent, Yu * should have a higher level of risk awareness than ordinary individuals. However, he "fake-married" with Wang * to evade purchase restrictions and taxes when he himself did not have the qualification to purchase the house. Moreover, he failed to carefully inspect the disputed house, which is connected to Liu *'s adjacent house and forms a whole, and did not fulfill his obligation of reasonable due diligence. His actions constitute gross negligence and do not meet the requirements for bona fide acquisition. The second-instance court should reverse the judgment and support Liu *'s claims.

The court's reasoning and the outcome of the case:In the second instance, Attorney Zhong Lue argued that Wang * had no right to dispose of the property and Yu * did not constitute bona fide acquisition: Yu * was an intermediary who did not have the qualification to purchase the house but "faked marriage" to transfer the ownership, failed to inspect the current status of the connected houses, and committed major negligence in failing to fulfill his due diligence obligations, which did not meet the requirements for bona fide acquisition. The second-instance court determined that Yu * was not acting in good faith, and reversed the first-instance judgment, supporting all of Liu *'s claims in the first instance. The court ruled that Wang * and Yu * should return the involved houses to Liu *, and the houses were "recovered after being lost", achieving all the objectives of the representation.

This case is handled by Beijing Henglu Law Firm.Wang DongAttorney (practice certificate number: 11101201910090334, subject to the certificate issued by the judicial administrative organ) acting as the agent.

III. Frequently Asked Questions

Q1: If I lose the property dispute, do I still have to pay the attorney's fees?

You still need to pay even under an ordinary agency arrangement. According to Article 928 of the Civil Code, if the lawyer has performed his or her agency duties in accordance with the agreement and there is no breach of contract or gross negligence, the client shall not refuse to pay on the grounds of losing the case; only when the agreement stipulates a risk-based agency fee arrangement, the client usually does not have to pay if the case is lost. It is essential to carefully review the billing method before signing the contract to avoid disputes and arguments afterward.

Q2: Can the attorney's fees be borne by the other party?

Generally, this is not allowed. The court will only support it if the contract explicitly stipulates that the defaulting party shall bear the attorney's fees, or in statutory circumstances such as intellectual property disputes and the creditor's right of revocation; real estate disputes are usually not statutory circumstances. The parties may stipulate in advance in the contract that "the defaulting party shall bear the reasonable costs of protecting their rights", so as to provide a basis for claiming compensation in the future.

Q3: What is risk-based attorney's fee, and can it be used in real estate cases?

A risk-based attorney fee refers to a fee paid based on the outcome, with a higher percentage charged only if the case is won. Real estate disputes involve property rights, and it is still possible to agree to a risk-based attorney fee after knowing the government's guidance price; however, cases such as marriage, inheritance, and labor compensation are prohibited by law. When adopting a risk-based attorney fee, a written contract must be signed, clearly defining the subject matter, the fee percentage, and the exclusionary circumstances.

Q4: If I lose the lawsuit, can I request a refund of part of the attorney's fees?

It depends on whether the attorney is at fault according to the provisions of the retainer contract. If the attorney commits major negligence, misses the statute of limitations, or fails to appear in court, etc., the client may claim a refund or compensation. However, if the attorney has fulfilled his/her obligations but the client still loses the case due to unfavorable facts or laws, the attorney generally will not refund the fees. It is recommended to keep the retainer contract and communication records, and if necessary, report the matter to the Lawyers' Association or the judicial administrative authority.

Q5: What fee terms should I pay attention to when signing a power of attorney contract?

It should specify the agency phase, the billing method (by phase, by piece, or at risk), the payment nodes, the responsibility for travel expenses, and the rules for termination and refund. Oral agreements are prone to disputes, and everything should be based on written agreements. Refuse to sign unlawful commitments such as "guaranteed wins" and "relationship fees". If you have any questions, you can consult the Bar Association or the judicial administrative authorities.

IV. Suggestions for Protecting Rights and Interests

  • Before signing the power of attorney contract, it's important to clarify the billing method. There are different consequences for ordinary agency and contingency fee agreements, so it's necessary to specify them in writing to avoid misunderstandings.
  • Distinguish between attorney's fees and litigation fees. The fact that the litigation fees are borne by the losing party does not mean that the attorney's fees should also be borne by the other party for the same reason.
  • The agreement stipulates that "the defaulting party shall bear the reasonable costs of protecting its rights", which provides a contractual basis for claiming attorney's fees from the other party in the future.
  • If you believe that the lawyer's negligence has caused losses, you should keep the evidence and report it to the Lawyers Association or the judicial administrative authority. You can also claim a refund or compensation in accordance with the law.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, so as to avoid missing the statutory time limit. →Legal services for real estate transactions·Attorney Wang Dong·Beijing Henglu Law Firm