How Nigerian Lawyers Can Use Contingency Fees Remuneration to Increase Their Revenue and Improve Access to Justice

woman in gold dress holding sword figurine

A truck carrying Dangote flour causes a crash on a highway resulting in multiple deaths and injuries; a student under the supervisor of a school staff drowns in a river during a school excursion; a female employee constantly harassed by her employer resigns when she could not take it anymore; a tenant is burned by defective electrical wiring in a flat he is leasing from his landlord; a young man with only N129,000 in his account wakes up to an alert that the money has been transferred to an unknown account — he does not remember compromising his financial information in a way that could have exposed it to fraudsters.

All these are, with slight variations, real life misfortunes people I know, or have heard of, encountered. A typical Nigerian beset by these civil wrongs may turn the other cheek, attribute the misfortunes to God’s will without seeking any form of redress from the parties whose negligence resulted in the damages. In my personal life, as a Christian and also given that I grew up in Nigerian, I also tend to follow this approach and did experience a culture shock when I saw that people in the U.S. sued for the minutest inconvenience.

Now, as a consumer advocate, I see how while it may be good to not pursue remedy for all wrongs, it is wise to seek redress for a wrong especially when the offending party is capable of addressing the wrong. Even more honorable is when we advocate not for ourselves but for the most vulnerable members of the society. For example, I would rather the richest man in Africa, whose truck crushed six people to death during the recent lockdown, and who mostly like have insurance, pay some sort of meaningful compensation to the surviving families of the deceased for their wrongful death, lost of future earnings, etc. The burden on him will be minuscule compared to the burden on poor families who in addition to bearing the burden of losing their loved ones, have to endure funeral expenses and uncertain financial future if the deceased is may have lost their a sole breadwinner.

Unfortunately in Nigeria, only a few people with legal problem engage formal institutions to resolve their dispute and many of the wrongs like the ones mentioned at the beginning of this article go unresolved. This report on Justice Needs and Satisfaction Study from The Hague Institute for Innovation of Law (Hiil) – shows as follows: Most legal issues in Nigeria are dealt with informally. Only two out of ten Nigerians engage formal institutions to solve their problems. The police is most used (even for civil cases). Courts and lawyers are rarely used. Only 10% of people engage lawyers to resolve their legal problems. Fourteen million people every year do not get justice. Poor people are more likely to have their legal disputes ongoing and unresolved, compared with wealthier people. Lack of legal awareness and procedures, financial constraints in hiring a lawyer and court fees were the most cited reasons for not engaging in a formal legal process. While the majority of people engage other informal processes to resolve their disputes, those who retained lawyers were the most satisfied with the resolution obtained.

If only 10% of legal issues in Nigeria are resolved through lawyers, the legal profession may well be losing out on 90% of possible earnings. If people are reluctant to engage lawyers because of exorbitant legal fees, then there’s one field of law where use of contingency fee arrangements may benefit both lawyers and the public’s access to justice.

A contingent fee is payable only if there is a favorable result of a dispute. With contingency fees arrangement, people who would otherwise not afford to file and prosecute lawsuits do not have to pay their attorneys until a result is obtained at which point they split the proceeds with their attorneys. Contingency fee arrangement is often used in torts (civil wrong) cases. In the U.S. Contingency fees charged by attorneys may be as high as 40% of more, but given the provision of Nigeria’s Rules of Professional Conduct for Legal Practitioners (see below), a Nigerian lawyer charging fees on contingency basis may have to set different rates depending on what stage of the process, for example whether before formal filing of a lawsuit or after extensive discovery etc., a resolution is reached.

Contingency fee remuneration encourages lawyers to take on cases that are most likely to be successful and to prosecute them diligently. This also ensures the public do not spend money on legal fees without confidence in the process or outcome leading to their abandonment of cases due to delay in the court system. Because lawyers have a stake in the outcome, they are more likely to see cases are resolved as quickly as possible and satisfactorily. In a previous post, I wrote about how alternative dispute resolution services offered by some states (Lagos, and from a subseequent comment on Facebook from another lawyer, Akwa Ibom State) can help lawyers settle cases faster and cheaper.

Indeed lawyers have a duty to advise their clients of available dispute resolution methods as provided in Rule 15(3)(d) of the Rules of Professional Conduct for Legal Practitioners as follows: In his representation of his client, a lawyer shall not — fail or neglect to inform his client of the option of alternative dispute resolution mechanisms before resorting to or continuing litigation on behalf of his client.

Lawyers who want to incorporate contingency fee arrangement into their practice need to bear in mind provisions of Rule 50 of the Rules of Professional Conduct which states as follows:

  • —– (1) A lawyer may enter into a contract with his client for
    a contingent fee in respect of a civil matter undertaken or to be
    undertaken for a client whether contentious of non-contentions.
    Provided that —–
    (a) the contract is reasonable in all the circumstances of the case
    including the risk and uncertainty of the compensation ;
    (b) The contract is not —–
    (I) vitiated by fraud, mistake or undue influence, or
    (ii) Contrary to public policy; and
    (c) If the employment involves litigation, it is reasonably obvious
    that there is a bonafide cause of action.
    (2) A lawyer shall not enter into an arrangement to charge or
    collect a contingent fee for representing a defendant to a criminal
    case.
    (3) Except as provided in sub-rule(1) of this rule, a lawyer shall not
    purchase or otherwise acquire directly or indirectly an interest an
    interest in the subject matter of the
    litigation which he or his firm is conducting; but he may acquire a
    lien granted by law to secure his fee and expenses.
    (4) A lawyer shall not enter into a contingent fee arrangement
    without first having advised the client of the effect of the arrangement and afforded the client an opportunity to retain him under an arrangement whereby he would be compensated on the basis of a reasonable value of his service.
  • (5) In his rule “Contingent fee” means a fee paid or agreed to bepaid for the lawyer’s services under an arrangement whereby compensation, contingent in whole or in part upon the successful accomplishment or deposition of the subject matter of the agreement, is to be of an amount which is either fixed or is to be determined under a formula.

Also, given that Rule 39 allows lawyers to promote their practice, with some restrictions on advertising, lawyers may educate their clients on these alternative forms of remuneration as a way to build their practice. This article I wrote for BellaNaija a few years ago shows how attorneys can promote their practice without violating the Rules of Professional Conduct.

Before now, lawyers relied mostly on word of mouth referral to grow their practices. However, now that people are online most of the time, we have to find them where they and educate them. The Hiil report previously referred also mentioned that less than 10% of people seek and receive legal advice from the internet, whereas numerous reports show that about 50% of Nigerians use the internet. Again, this shows Nigerian lawyers need to do more to educate the public about their rights as people cannot seek to assert a right they do not know exists. A Nigerian lawyer colleague I worked with to publish articles in her practice area and who updated her LinkedIn profile as a result has reported getting new clients and numerous opportunities, some international, from her online presence.

So if you are an attorney reading this, here are a few practical things you can do to increase your income significantly. First, start educating the public about their rights through Facebook posts etc. Second, be open to accepting cases (especially torts and for people who cannot afford to pay for legal services) on contingency fee basis; if you are skeptical about operating on a 100% contingency basis, you may consider charging less legal fees with the rest of your fees based on contingency as common in the U.K.; Third, screen cases to ensure you go after defendants who have the wherewithal to pay; no matter how good a case is, if the defendant does not have the financial means to remedy the wrong, you will get nothing even if you obtain a judgment; you don’t want to win the battle and lose the war. Fourth, consider using mediation services to resolve cases without the delay and cost of litigation; if your fee is on contingency basis, not filing a lawsuit before resolution does not preclude you from getting your fees from the settlement. Lastly, keep the interest of your client at the forefront of your decisions and ensure you obtain the best possible outcome for them. At the end of the day, we are called to be advocates, pleading the cause of others.

For the general public, an effective legal system with access to justice is good for the economy. For example, if car owners know that merely pleading for forgiveness when they cause an accident does not end the problem, they will be more likely to buy genuine insurance policy to cover injured parties thus boosting the insurance sector.

With a combination of Nigerian lawyers now able to charge for legal fees on contingency basis for civil wrongs and availability of mediation services that make resolution of disputes faster and cheaper, I hope more people are encouraged to seek redress for their legal problems.

Anne Mmeje is an attorney currently working as a mediator.


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