Work carried out by London firm Blacklion Law LLP on a fixed fee transaction that was eventually aborted has been ordered by the High Court to be paid.
In the ruling of the High Court case Blacklion Law LLP v Amira Nature Foods Ltd & Anor His Honour Judge Paul Matthews ordered that the firm should be paid for work it completed on a bond issue despite the transaction being aborted. The court heard how Blacklion completed more than 90% of the work needed on “Project Avatar” and should therefore be paid the agreed £300,000 fixed fee.
The defence argued that the agreed £300,000 fixed fee was “subject to the completion of the matter” and was “clear and unambiguous” meaning that nothing would be payable in the event that the transaction did not complete. But H.H. Judge Paul Matthews found that the retainer language was not “unambiguous”, and while the wording “subject to” introduced an element of conditionality, there could be no expectation that lawyers working on a bond issue would be paid solely on a contingency basis.
Blacklion began working on the project in January 2017 although the retainer itself was not signed until May 2017. At this point Blacklion managing partner Negar Yazdani had already recorded more than £385,000 worth of time on the matter.
The judge said:
“It is not likely that a small law firm such as the claimant, with all its cash-flow needs, would be prepared to tie up a huge proportion of its available human resources on a project to be paid only if it was successful. But let me suppose that I am wrong about that, and that Ms Yazdani (who came across as a cautious person) was in effect prepared to ‘bet the firm’. In my judgment it would make no commercial sense whatever for the claimant in early May 2017 to agree to a contingent fee arrangement under which it would be paid a fee of far less than its recorded time so far.”
His Honour Judge Paul Matthews ordered that Blacklion’s former client pay £300,000 for the work done and ordered further damages payments of £300,000 for causing loss to the firm.
