The National Industrial Court in Port-Harcourt Division has held that a lawyer is entitled to payment of professional fees even if parties settle out of court.

Justice Nelson Ogbuanya handed down the decision while delivering judgment in the case between Ajakaye Christopher and his erstwhile employer, Evomec Global Services Ltd (SuitNo.NICN/PHC/119/2021).

The judge held: “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 fees of the counsel is not taken care of and factored in the course of the settlement. In other words, out-of-court settlement should include lawyers’ fees.

“Ensuring payment of lawyers’ fees and cost of litigation in an out-of-court settlement deal, a variant of 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.”

The claimant in the case suffered a fatal injury while operating a heavy-duty machine on site.

He sued his employer, claiming N80million compensation for permanent disability.

After the conclusion of the trial up to the filing of the address, the defendant got the claimant to agree to an out-of-court settlement.

However, the claimant did not disclose to his counsel, a Senior Advocate of Nigeria (SAN), that he had reached an agreement with his former employer.

The SAN explained that he filed and prosecuted the case for the claimant out of pity, without the claimant making any initial deposit for his professional fees.

Yet, the claimant agreed to be paid a lesser sum of N15million without informing his counsel or allowing him to participate in the discussion on the proposal for the out-of-settlement.

The SAN only got to know about the deal when payment was passed through his firm, but nothing was discussed or agreed to concerning his fees, and even the terms of settlement were not properly drawn, which was rejected by the court.

The court, however, awarded the N15million to the claimant and N5million as cost payable to the claimant’s counsel.

Justice Ogbuanya held: “From the record, I find no evidence that the said settlement brokered by the claimant and the defendant with its erstwhile counsel took care of the professional fees of the learned SAN, who filed and prosecuted the suit for the claimant and is entitled and expected to be remunerated, particularly in the light of the manner the matter ended.

“There is no evidence also that the claimant 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 a time of distress and pitiful situation.

“In fact, he did not reimburse even bank charges for the transfer of the payment to his own account by his lawyer’s firm that received the payment. What an unconscionable way to treat a counsel!”

While condemning the claimant’s attitude towards his own counsel, the judge added: “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 – Ibi jus ibi remedium!

“In the circumstance, the relief (iv) succeeds to the extent that cost in the sum of N5million is hereby awarded against the defendant in favour of the claimant’s counsel, to be paid within two months of this judgment, otherwise 10 per cent 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, Judgment delivered on June 29 2021), which was challenged on appeal (Appeal No. CA/PH/128/2021), but which appeal was dismissed on June 21, 2023.

In that case, both parties had opted and settled their matter 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. The defendant appealed, but the appeal was dismissed.

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