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

The National Industrial Court Port-Harcourt Division, presided over by Hon. Justice Nelson Ogbuanya has held that a lawyer is entitled to payment of professional fees even if parties settle out of court. Justice Ogbuanya handed down this decision while delivering judgment in the case between Ajakaye Christopher and his erstwhile employer, 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 submitted that while operating a heavy-duty machine at the site, suffered a fatal injury, and he sued his employer claiming N80M compensation for permanent disability. After the conclusion of the trial up to the filing of Address, the Company got Christopher to agree to an out-of-court settlement without him disclosing to his counsel, Wilcox Abereton SAN, who explained that he filed and prosecuted the case for Christopher out of pity without any initial deposit for his professional fees. Yet his client agreed to payment of a lesser sum of N15M without informing his counsel to participate in the discussion on the proposal for the out-of-settlement and only got to know when payment was passed through his firm, but nothing was discussed or agreed on, concerning his fees, and even the terms of the settlement were not properly drawn, which was rejected by the court, and urged the Court to grant cost in the interest of justice.

The court, however, in its Judgment awarded the said agreed sum of N15M to Christopher and N5M as Cost but payable to the Claimant’s counsel.

In the 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.