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SEVENTH OLBHL ERA KELULAU

First Regular Session, January 2005
RPPL No.       7‑11
(HB. No. 7‑8‑1, HD1, SD1, PD1)

AN ACT

To limit the amount of legal fees and expenses that a lawyer can charge, by adding Section 2111 to Title 14 of the Palau National Code; amend Section 2110 of Title 14 of the Palau National Code; and for other related purposes.

THE PEOPLE OF PALAU REPRESENTED IN THE OLBIIL ERA KELULAU DO ENACT AS FOLLOWS:

Section 1. Legislative Findings. The Olbiil Era Kelulau is concerned with the amount of attorney fees collected by lawyers in collection suits in the Republic. The Olbiil Era Kelulau is also concerned that most defendants in collection suits are not represented by lawyers, even in the Small Claims Court, and said individuals are at a major disadvantage as to knowing their rights as well as knowing court procedures. Furthermore, the Olbiil Era Kelulau is also concerned with the lack of definite guidelines as to the amount of legal fees charged by collection lawyers. For the above reasons, the Olbiil Era Kelulau finds that it is essential to protect the rights of individuals who are disadvantaged by the collection process through the court system. The Olbiil Era Kelulau also finds that in collection cases with or against corporations, where the principal amount is less than $10,000.00, corporations need not be represented by attorneys but may be represented by their own duly authorized officers in order to minimize their legal fees and expenses.

Section 2. Amendment. 14 PNC ' 2110 is hereby amended by adding subsection (d) to read as follows:

' 2110. Exemptions.
The following described property shall be exempt from attachment and execution:

(a) Personal and household goods ‑ all necessary household furniture, cooking and eating utensils, and all necessary wearing apparel, bedding, and the principal family dwelling house and one motor vehicle, fair market value of said property not to exceed $150,000,unless otherwise specified by contract.

(b) . . . .

(c) . . . .

(d) Social Security and Pension Plan payments and benefits.

Section 3. Amendments. 14 PNC is hereby amended by adding '' 2111, 2112 to read as follows:

' 2111. Limitation on Lawyer Fees in Collection Cases. Legal fees and expenses in a collection case shall not be assessed against a defendant in excess of twenty‑five percent of the amount of the outstanding balance of the debt at the time the lawsuit is filed, unless otherwise specified in the contract between the parties to the lawsuit.

Section 4. Effective Date. This Act shall take effect upon its approval by the President of the Republic of Palau or upon its becoming law without such approval, except as otherwise provided by law.

PASSED: August 18, 2005

Approved this 31st day of August 2005.

________________/s/ 
 Tommy E. Remengesau, Jr.
 President
 Republic of Palau