Recovery of Costs of Legal Representation in Lagos State High Court : A Review of Chris Baywood Ibe & Anor v. Bonum Nig. Ltd – Elvis Asia

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The decision of the Court of Appeal (CA) in Chris Baywood Ibe & Anor v. Bonum Nigeria Limited[1] on 6th February, 2019[2] has again brought to the fore the need for a reasonable resolution of the question of how the costs of legal representation can be claimed in Nigeria.

In cases like Ihekwoaba v A.C.B[3], Guinness Nig. Plc. v. Emmanuel Nwoke[4]  and Christopher Nwanji v. Coastal Services (Nig.) Ltd.[5], the courts held surprisingly that a claim for counsel representation was impossible and even unethical. This position is strange and contrary to earlier decisions in the 1960s and WACA years.  In Rewane v Okotie-Eboh[6] for example, the Supreme Court per Ademola CJF, indicated that recoverable costs included costs of engaging a Queen’s Counsel where there was no local expertise available in that specialized area of law.

Though later decisions have jettisoned the view in Ihekwoaba, Guinness Nig. Plc and Nwanji cases, parties still rely on these decisions as authorities in support of the assertion that the claim for cost of legal representation is not maintainable. The other problem is that the decisions that are pro- award of costs of legal representation which dominate current judicial thinking equates costs of legal representation to special damages that must be specifically pleaded in the claim. See Drilling Nig. Ltd v. New Genesis Executive Security Ltd [7]and Naude v Simon[8], Tinuade Akomolafe-Wilson[9] and Michael v. Access Bank Plc, [10] Divine Ideas Ltd V Umoru[11], and International Offshore Construction Limited & 3 Ors V Shoreline Liftboats Nigeria Limited.[12]

In Chris Baywood Ibe & Anor v. Bonum Nigeria Limited (supra), the CA re-affirmed the position that claims for counsel representation must be pleaded and claimed as a cause of action. In determining the issue, reference was made to Order 49 Rule 1 of the Lagos State High Court (Civil Procedure) Rules, 2012 (old Rules) which is re-enacted in Order 53 Rule 1 (1) (a) (3) and (4) of the Lagos State High Court (Civil Procedure) Rules, 2019 (LCPR). The Rules provide thus:

  1. In fixing the amount of costs, the principle to be observed is that the party who is in the right is to be indemnified for the necessary expenses he has incurred in the course of proceedings and compensated for his time and effort in coming to court.
  2. The expenses shall include the: (a)       cost of legal representation and assistance of the successful party to the extent that the judge determines that the amount of such cost is reasonable .
  3. When costs are ordered to be paid, the amount of such costs shall, if practicable, be summarily determined by the Judge at the time of delivering the judgment or making the order. 
  4. When the Judge deems it to be impracticable to determine summarily the amount of any costs which he has adjudged or ordered to be paid, all questions relating to such costs shall be referred by the Judge for determination by an assessment officer”

The summary of the LCPR is that recoverable costs include legal representation and assistance for the successful party and that the court shall deal with it summarily. This means that it need not be pleaded in the claim. At the time of delivering judgment, application can be made for it but the court must be satisfied that the claim is reasonable. Where the judge is unable to determine it summarily, the issue shall be referred to an assessment officer who will then make the assessment.  It is submitted that the decision of the CA in Baywood Ibe’s case  refusing  a claim for legal representation on the premise that it was not claimed as a cause of action is contrary to the provision of the above rules and unrealistic given the peculiar dynamics of litigation in our courts. The authorities to the effect that costs of legal representation must be pleaded ceased to apply to Lagos State High Court in 2012 when the old Rules were made[13].

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The above interpretation is more plausible for many reasons. In the first place, the Rules used the term ‘summarily’. Claiming the costs of counsel representation as a cause of action to be determined in a full trial cannot by any stretch of imagination be ‘summarily’. Secondly, the court cannot refer a cause of action specifically pleaded to an assessment officer under the Rules.

The procedure of either a summary determination of costs by the judge or reference to assessment officer is similar to the procedure in the United Kingdom (UK). Part 44 of the UK Court Procedure Rules (CPR) deals with costs generally. Part 44.6 which provides for the procedure for assessing costs is similar to Order 53 Rule 1 (3) and (4) of the LCPR. It provides that the court may assess costs summarily or order a detailed assessment before a costs officer.  A costs officer means a costs judge, District Judge or authorized court officer. In practice, the successful party applies for costs by filling out the costs assessment forms after judgment. The Judge that delivered the judgment may either assess the costs or refer it to a special costs judge. There is no requirement that the costs must be claimed as special damages.[14]

Thirdly, the Rules refer to costs of legal representation and assistance of the successful party. The tone of the Rules suggests that it is the costs incurred during the course of the proceedings. It is illogical and speculative to fix it at the time of filing the action. We are talking about costs that may span, in some cases, five years or more. Whatever determination is made cannot be truly reflective of work done and in many respects, may violate the Rules of Professional Conduct for Legal Practitioners and the Legal Practitioners’ Act which mandates a legal practitioner to prepare a bill of charges before claiming professional fees. A bill of charges prepared before the work is done cannot meet the requirement of the law because the bill is intended to itemize the work done.

Furthermore, what happens if the litigant eventually expends more costs on legal representation than claimed in the pleading, will it be in the interest of justice and fairness for the right to be lost? What about the time value of money? The truth of the matter is that litigants cannot accurately determine the costs of litigation at the time of filing the action for the purpose of specially pleading it. For example, the costs of legal representation include appearance fees, and professional fees which will invariably depend on the complexity of the case, the nature and time expended on it.

Fourthly, the other provisions of Order 53 are consistent with the conclusion that costs are intended to be determined not as a cause of action as held by the Court of Appeal. For example, Order 53 rule 2 of the LCPR states that if a party rejects an offer of settlement but subsequently obtains judgment or is awarded orders which are not in excess of the offer of settlement, he shall pay the costs of the losing party from the time the offer of settlement was made, up to the time of judgment. The costs include costs of legal representation and could not have been determined at the time of filing the action. Also, the argument that costs of legal representation under the LCPR must be pleaded would presuppose that other costs recoverable under the rules which have not been incurred at the time of preparation of the action must also be pleaded. This is an impossible expectation.

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Finally, the award of costs of legal representation being a statutory entitlement under Order 53 of the LCPR is not required to be pleaded. Entitlement to costs of legal representation is similar to post judgment interest provided for in various rules of court.[15]  In Amber Resources (Nig.) Ltd v. Century Energy Services Ltd[16], the Court of Appeal held thus:

“Post judgment interest is, however, a statutory entitlement under Order 35 Rule 4 of the High Court of Lagos State (Civil Procedure) Rules 2012 (rules of the Court below). The said entitlement is not less than 10% per annum. It need not be pleaded.”[17]

It is accordingly submitted that a claim for legal representation should not be defeated in Lagos on the basis that it was not pleaded. The decision of the Court of Appeal in Chris Baywood Ibe & Anor v. Bonum Nigeria Limited can only be justified on the later finding that the award of legal costs of N22.8million would be granting the appellants an unwarranted bonus, and unjustly mulcting the equally successful respondent in costs. This is in accord with Order 53 Rule 1 of the LCPR under which costs is awarded in favour of the successful party. Where both parties succeeded in some respect, it will be unreasonable to award costs under the Rules.

It is hoped that sooner rather than later, the Court of Appeal and the Supreme Court will settle this issue because of its importance in dispute resolution and justice administration.  The grant of cost of Legal representation is a fundamental strategy in dispute resolution all over the civilized world and it is necessary to compensate litigants for the ordeal of litigation particularly within the present dynamics of the court system in Nigeria. It is also a way of ensuring sanity in the system. A party who knows that the costs of litigation may be more than the claim against him will not insist on a trial simply to take undue advantage of the delays in justice administration as is presently the case.  Such a party will be willing to settle instead[18].

Most importantly, indigent litigants will not be denied access to justice if the costs of legal representation are readily granted by the court. This is because legal practitioners will readily take up their cases once they are reasonably sure of success. This is a public policy consideration that will spur a revolution in justice administration in Nigeria. It is in this light that the Rules of other High Courts should take a cue from the LCPR.

Elvis. E. Asia is a Senior Counsel in Lagos, Nigeria. Mr. Asia can be contacted at elvis.easia@gmail.com

Footnotes:

[1] Reported in the Guardian of 26th February, 2019, available online at https://guardian.ng/features/where-a-claim-for-solicitors-fees-does-not-form-part-of-claimants-cause-of-action-same-cannot-be-granted/

[2] (2019) LPELR- 46452

[3] Ltd. [1998] 10 NWLR [Pt. 571] 590 at 610-611

[4] [2000] 15 NWLR [Pt. 689] 135

[5] [2004] 11 NWLR [Pt. 885] 552 at 569, C-D

[6] [1960] 1 NSCC 135

[7] [2011] LPELR – 4437 CA

[8] [2014] ALL FWLR [Pt. 753] CA 1878

[9] 2013) LPELR-20491(CA)

[10] (2017) LPELR-41981(CA)

[11] (2007) ALL FWLR (PT. 380) 1468 RT. 28

[12] (2003) 16 NWLR (Pt. 845) 157 at 179

[13] Though the LCPR makes the argument that costs of legal representation need not be pleaded easier, it is submitted that this should be the case even under other Rules of court. The LCPR merely itemized what constitute costs but ordinarily, costs should include costs of legal representation. Furthermore, most Rules of court provide for summarily determination of costs of reference to taxing officer. See for example Order 39 Rules 4 of the High Court of the Federal Capital Territory, Abuja (Civil Procedure) Rules, 2018, Order 47 Rules 6, Edo State High Court (Civil Procedure) Rules, 2012 and Order 49 Rules 1 of the Rivers State High Court (Civil Procedure) Rules, 2010.

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[14] The details of the procedure in the UK was explained by Mr. Ademola Adeniyi, a legal practitioner qualified both in Nigeria and in the UK and currently practices in London. Accordingly to him, there are three (3) tracks to the claim of legal representation in the UK. The first is costs in small claim track (i.e. 0- £10, 000) which are assessed by summary assessment by the judge after judgment. In this case both legal representatives would ensure that the summary costs assessment form is filed in court and exchanged at least 24hrs before hearing and the court will assess the costs payable immediately after judgment. The position is the same for fast track matters (£10,001- 25,000). However, where the successful party did not file a summary costs assessment form, then the court will hold that costs are to be assessed by senior costs judge, if not agreed. Because costs in small claim and fast track matters are less than £75, 000 they are assessed using the provisional assessment method. That is, they will complete and file all exchanged costs forms and correspondence between parties before a senior costs judge , who would assess it without parties’ attendance.

The third track is the multi track which is for claims above £25. 001. Here, the parties must file and exchange “costs budget” to control unreasonable costs. The court will then have a case and costs management conference (CCMC), where the costs budgets would be approved. The court will prune and reduce these budgets as much as it can. Parties can also agree budgets and there would not be much discussion on it at the CCMC. Upon conclusion the successful party would be able to recover sums in his costs budget and may get more if the court so approves. At judgment, the court would also determine costs liability, just like in other tracks but except parties agree to the other party’s costs proposal, the judge will hold that costs be assessed. This means that the successful party must file its assessment forms within 3 months to the senior Costs judge who will then assess it

Mostly parties will instruct special costs lawyers who will attend on their behalf. The costs of the assessment would be added to the extent that the judge finds reasonable.

[15] Order 39 Rules 4, LCPR.

[16] (2018) LPELR-43671, Pp. 20-21, Paras. F-A

[17] The Lagos division of the Court of Appeal today reached the same conclusion in Guarantee Trust Bank v. Aleoghana. The full citation will be updated as soon as it is obtained.

[18] Perhaps our fear in Nigeria is the determination of the reasonability of costs claims.  This can be solved by our courts by designing a system of making and checkmating unreasonable claims like the costs assessment forms and cost budget procedure in the in the UK.

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