HomeCourt room newsOut-Of-Court Settlement Should Include Lawyer’s Fees- Industrial Court Rules

Out-Of-Court Settlement Should Include Lawyer’s Fees- Industrial Court Rules

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The National Industrial Court has held that a lawyer is entitled to payment of professional fees even if parties settle out of court. The above was the judgment of Hon. Justice Nelson Ogbuanya of the Port-Harcourt Division of the court in a recent case between Mr. Ajakaye Christopher vs Evomec Global Services Ltd.

The Judge stated that the issue of Cost arises even when parties settle a litigated matter on their own in an out-of-court settlement deal, particularly if the professional fee of the counsel is not taken care of and factored in the course of the settlement. In other words, the out-of-court settlement should include lawyer’s fees.

Justice Ogbuanya reasoned that ensuring payment of lawyers’ fees and cost of litigation in an Out-of-Court Settlement deal; a variant of the Alternative Dispute Resolution (ADR) model, would encourage and sustain litigation lawyers’ interest and embrace of ADR, which they often shun, and christen ‘Acute Dwindling of Revenue’ (ADR), for the simple reason that remuneration of lawyers in ADR practice has not been streamlined and integrated in the dispute resolution policy reforms heralding ADR practice in the Nigerian legal system, which hampers effective growth of ADR practice in Nigeria.

From facts, the Claimant- Ajakaye Christopher had sued his former employers for the sum of N80m being compensation for permanent disability occasioned by an injury he sustained while operating a heavy-duty machine at his employer’s site. After the conclusion of the trial and filing of Final Written Addresses, the Defendant convinced the Claimant to an out-of-court settlement without the knowledge of his counsel, Wilcox Abereton SAN.
Mr. Aberaton, SAN claimed that he filed and prosecuted the case for the claimant without collecting initial deposit for his professional fees out of pity. He noted that the agreement between the parties to settle the case out of court for a lesser sum of N15M without his participation in the discussion did not include his professional fees. He also noted that the terms of settlement which was prepared by parties was rejected by the court because it was not properly drawn. He noted that while he was not against the agreement of the parties to settle, he is entitled to the cost of his representing the claimant. He urged the Court to grant the payment of his professional fees in the interest of justice.
In its Judgment, the court entered judgment in the sum of N15M as agreed by parties and awarded the sum of N5M as Cost payable to the Claimant’s counsel.

In its Judgment, the Court pointed that there is no evidence that Mr Christopher upon receiving payment which was remitted through his counsel’s law firm, did pay to his counsel any sum as remuneration for the legal services rendered to him at the time of distress and pitiful situation.
While condemning the attitude of Ajakaye Christopher against his counsel, Justice Ogbuanya stated thus: “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! Gladly, this is a court of justice, and no injury deserving remedy will be left unhealed- What an unconscionable way to treat a counsel!”

The court went to order that: “In the circumstance, the Relief (iv) succeeds to the extent that, Cost in the sum of N5M (five million naira) is hereby awarded against the Defendant in favour of the Claimant’s counsel, to be paid within two (2) months of this Judgment, otherwise 10% interest per Annum shall apply until fully liquidated”.
Justice Ogbuanya had placed reliance on his earlier decision in the case of George Chinwo v. Port Harcourt Electricity Distribution Company & 2 Ors. (Suit No. NICN/PHC/89/2020 which was challenged on appeal (Appeal No. CA/PH/128/2021), but which appeal was dismissed on 21st June 2023. In that case, both parties had opted and settled their matter in court, by an out-of-court settlement deal, but failed to agree on the inclusion of payment of Cost incurred by the Claimant, especially Cost arising from professional fees incurred by the hiring of a learned SAN by the Claimant.

The Court awarded a professional fee as Cost in favour of the Claimant’s counsel, and the Defendant appealed, but the appeal was dismissed.

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