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Passing the burden of legal fees to the other side – a recoverable cost?

Chief Justice of Nigeria Mahmud Mohammed

Chief Justice of Nigeria Mahmud Mohammed

It is often the practice to make out the statement (or, particulars) of claim in civil suits with a head of claim seeking to recover, in addition to other heads of claim, a claim for solicitor’s fees; often couched as ‘legal fees’ or ‘costs for instituting and maintaining the action’. It appears fairly straightforward: the claimant is seeking, in addition to the reliefs for which he has brought an action, to be ‘made whole’ for engaging the services of a lawyer, and for incurring ancillary expenses for instituting or filing a court action.

The English rule, which instructively goes through constant reforms, generally provides that the party who loses in court pays the other party’s attorney’s fees, and the jurisprudential basis is not too farfetched. In apportioning costs associated with a particular decision to the loser, it indemnifies the successful party for the costs he has undertaken in prosecuting/defending the action, whilst also discouraging frivolous or questionable litigation.Amazingly, the strand of the decisions around here, seems not to have been made in a consistent manner as to necessarily suggest that same is or is not a recoverable cost.

It appears to have started from the decision of the Court of Appeal in Ihekwoaba v A.C.B Ltd.[1998] 10 NWLR [Pt. 571] 590at 610-611when the Court refused a claim for solicitor’s fees on the understandably plausible ground (disclosed by the peculiar fact-circumstance of that decision) that ‘there is no system of costs taxation to get a realistic figure’. Costs assessed for legal fees are, by the provisions of the rules of court, subject to tax, and the refusal of the claim here was hinged ona deficient or near-absent costs taxing system.

Shortly thereafter, one of the issues that came up for consideration in Guinness Nig. Plc. v. Emmanuel Nwoke[2000] 15 NWLR [Pt. 689] 135(yet another decision of the Court of Appeal)was whether the respondent can validly claim his solicitor’s fee from the appellant. The Court of Appeal upheld the trial court’s dismissal of the claim for solicitor’s fee, noting, in addition to the main reason for refusing same,that it is “unethical and an affront to public policy to pass on the burden of solicitor’s fee to the other party”. Curiously, even in the light of the novelty of such a proposition, the Court did not as much as offer an explanation as to how a claim for Solicitor’s feesmacks of an immoral request and/or runs contrary to public policy considerations.

Each case must, however, turn on its own set of facts to rationalise the reason for the decision reached, and thus the Court of Appeal tried to explain, albeit without much success, in SPDC v Okonedo[2008] 9 NWLR [Pt. 1091] p. 85the distinguishing reason for holding the hirer of legal services to the expense of his‘bargain’ in Guinness’ case. The Court of Appeal offered that the claim for solicitor’s fee was not allowed because the respondent claimed (and indeed, ‘proved’) as ‘special damages’ his solicitor’s fee which stood at ‘a staggering sum of N500,000.00 and which arose after the cause of action had arisen.’ With respect to the Court, it is not out of the ordinary to have a litigant, in the normal chain of events, engage a lawyer after the set of facts donating a right to bring an action has arisen. And, again with respect, it beats the imagination how this could make for disallowing an attendant solicitor’s fee incurred thereon.

Roundabout the time of this decision, the Supreme Court had an opportunity to consider a similar request in Christopher Nwanji v. Coastal Services (Nig.) Ltd. [2004] 11 NWLR [Pt. 885] 552 at 569, C-D. The Respondent in Nwanji’s case had asked the apex Court to discountenance the position in Ihekwoaba’s on the ground that the Court’s pronouncement there was made in passing. Uwaifo JSC, who, earlier as Justice of the Court of Appeal, was incidentally in the lead in Ihekwoaba’s, reiterated that the observation as to the difficulty in getting a realistic figure as damages attendant upon a properly assessed solicitor’s fees was a major part of the decision and remains a valid position. From this writer’s limited research,the apex Court has since not pronounced otherwise – even as there was an earlier decision in the 1960s when indeed the self-same apex Court, per Ademola CJF, hinted at costs being recoverable for engaging a Queen’s Counsel where there is no local expertise available in that specialised area of law (Rewane v Okotie-Eboh [1960] 1 NSCC 135).But that, for the moment, appears a digression.

All considered, the question whether a claim for solicitor’s fee is recoverable still does not lend itself to an easy answer. The law as it has been interpreted till date, reveals two sets of positions on the point. On both strands, a claim for solicitor’s fee from the unsuccessful party is contextually put as an ‘unusual claim…difficult to accept in this country’, Ihekwobav ACB , followed by the apex court’s decision in 2003 (and which decision in Nwanji’s has not been overruled or set aside by the self-same Supreme Court) appears to suggest that where such assessed costs are properly taxed, pleaded and proved as special damages, same will be allowed. The Supreme Court being at the pinnacle of judicial decisions, it is safe to simply conclude here that those are the criteria that must be crossed to avail such a claim; unless the apex Court pronounces otherwise at another opportune time. But that is not all on the subject.

The moral fibre?
The claim for solicitor’s fee was refused in Guinness on twin-grounds of the claim not arising from the transaction between the parties, and that same was unethical and an affront to public policy. For some reason, how such a claim runs against ethics and public policy considerations was not expatiated upon. This appears a major pitfall in the case which, by the hallowed principle of stare decisis, many a decision from the High Court still had to follow devotedly, in dismissing a claim for solicitor’s fee.

In SPDC v Okonedo (supra) an award of special damages for solicitor’s fee was allowed, with respect, on the slightly blurred line that what was claimed was for specific expense incurred in engaging a solicitor to have a brewing dispute otherwise settled out of court and such same will not constitute an immoral claim. In International Offshore Construction Ltd & 3 Ors. v Shoreline Liftboats Nig. Ltd[2003]16 NWLR [Pt. 845] p. 157the award made as damages for engaging solicitor’s services was affirmed by the Court of Appeal on the ground that unchallenged evidence was led in its proof.Guinness was not considered, so understandably the moral question was kept for another time. InLonestar Drilling Nig. Ltd v. New Genesis Executive Security Ltd [2011] LPELR – 4437 CAthere was a claim for costs incurred in engaging a solicitor to prosecute a substantive claim initiated under the Undefended List procedure. The Court of Appeal,in affirming the lower Court’s position that the claimant did not prove the claim as necessary expenses,accepted nonetheless that costs, pleaded and proved as special damages, may be awarded for securing legal representation, and, for the litigant’s“time and effort in coming to court.”

The cost-shifting principle also fell for animated discussion in the Court of Appeal decision inNaude v Simon[2014] ALL FWLR [Pt. 753] CA 1878. The Court, per Akomolafe- Wilson JCA reviewed the earlier decisions of the court on the same, inevitably drawing a close thus:
“Having regard to the above recent cases, it is no more in doubt that damages for cost, which includes solicitor’s fees and out of pocket expenses, if reasonably incurred are usually paid by courts if properly pleaded and proved.In short, the decision of this honourable court in the cited cases Ihekwoaba v. A.C.B. Ltd and Guinness (Nig.) Plc v. Nwoke where this court held that the payment of solicitor’s fees as damages is not supported in this country does not represent the present state of the mind of the courts in this country. In more recent times, it is common for solicitors to include their fees for prosecution of cases and pass same to the other party as part of claims for damages, which have been awarded by the courts once the claims are proved.”

Commendably enough, the position in these later decisions of the Court of Appeal appear to make passage for recovery of solicitor’s fee. However, it is pertinent to mention that the quoted portion of His Lordship’s erudition on the point, appears to suggest that the position of the Court taken in Ihekwoaba v. A.C.B. Ltd, as endorsed by the apex Court in Nwanji, and which has not been upturned by the apex court is no longer the law. As emphasized above, there are prescriptions in Nwanji’swhich, unless upturned by the apex Court, remains the law to make for a successful outcome on a claim for recovery of professional fees. The real issue, in view of the peculiarity of ‘pleading and proving costs’ to make for a successful claim on same is to develop our costs taxation systems/process.

Guinness’, happily, it can be safely argued, does not represent the position of the law anymore, if it ever was. Except passing the burden of solicitor’s fee to the other side is, with respect, being mistaken for the public policy prohibition against ‘maintenance’ which Lord Loughborough explained in the English case of Wallis v Duke of Portland 3 Ves. Jun. 494 at 502 in these terms: ‘parties shall not by their countenance aid the prosecution of suits of any kind; (because) every person must bring (his action or suit) upon his own bottom, and at his own expense.’, making an unsuccessful party pay the litigation costs of the successful party will not run against the thread of ethical concerns. It may be argued that it will discourage actions, but the wicket in response is that award of costs is not offered at the mere asking but as ‘regulated’ within the discretion of the court, subject to its being pleaded as special damages and proven.

Commendably enough, the High Court Rules of Lagos State (2012) has made a pioneering move in providing beyond a bareknuckle statement that costs follow events. It specifies expressly in Order 49 1(1) (a) that such costs shall include ‘legal representation’. That puts it beyond cavil, and the other rules of court may want to consider adopting such express provision. Costs should follow events, in every sense of that aphorism.

Kuti is a Partner in the commercial law firm of Perchstone & Graeys

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COURT OF APPEALlegal fees
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