The legal community witnessed a significant clarification on the payment of professional fees for lawyers involved in out-of-court settlements.
Justice Nelson Ogbuanya of the National Industrial Court, Port-Harcourt Division on Tuesday delivered a judgement setting precedent on the matter.
He ruled that lawyers are entitled to receive their professional fees even when parties settle disputes outside the courtroom.
The judge gave verdict in the case of Ajakaye Christopher versus Evomec Global Services Ltd.
Background
Christopher, the claimant in this case, sought N80 million in compensation for permanent disability sustained while operating heavy-duty machinery at his workplace.
Throughout the trial, his counsel, Wilcox Abereton SAN, provided legal representation out of compassion without an initial fee.
Ultimately, the company persuaded Christopher to agree to an out-of-court settlement without involving his legal counsel, which led to the acceptance of a reduced settlement amount of N15 million.
Notably, no specific agreement was reached on legal fees, and the settlement terms were incomplete.
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Court’s Decision
Justice Ogbuanya in his judgment, recognized that the absence of a structured framework for remuneration in Alternative Dispute Resolution (ADR) practices has discouraged litigation lawyers from embracing ADR.
He said the lack of clear guidelines for lawyer compensation in ADR has hindered the growth of this alternative dispute resolution method within the Nigerian legal system.
Justice Ogbuanya’s verdict upheld the claimant’s right to the agreed settlement amount of N15 million and additionally awarded N5 million as Cost to be paid to the claimant’s counsel.
The court highlighted that there was no evidence to suggest that Christopher paid any fees to his legal counsel when he received the settlement, even though the payment was made through the law firm.
In condemning Christopher’s actions and emphasizing the importance of honoring legal representation.
Justice Ogbuanya said “Perhaps, the Claimant by turning around in cohort with the Defendant and its scurfy counsel would prefer to leave the learned SAN in the cold without any remuneration, and make him regret the steps taken to pursue the cause of justice for the Claimant in this suit. That is certainly not the way to pay back good deeds!”
The court ordered that the awarded Cost of N5 million be paid to the claimant’s counsel within two months of the judgment.
If the payment is not made within this timeframe, a 10% interest per annum will apply until the entire amount is liquidated.
This judgment was informed by Justice Ogbuanya’s previous ruling in the case of George Chinwo v. Port Harcourt Electricity Distribution Company & 2 Ors., where a similar out-of-court settlement failed to address the payment of professional fees incurred by the Claimant’s counsel.
