Bermuda law firm sues client for non-payment of legal fees …

It seems to be an increasingly common occurrence for Bermuda law firms to sue their former clients for non-payment of their legal fees, only to be met with a defence alleging overcharging and professional negligence or breach of contract.

The most recent reported example is Marshall Diel & Myers Limited v Collingwood Robinson [2016] SC (Bda) 78 Civ, in which Mr. Justice Hellman of the Supreme Court of Bermuda gave judgment in favour of the Bermuda law firm, Marshall Diel & Myers Limited, and ordered Mr. Robinson to pay outstanding invoice sums totalling $63,893.19.

The full judgment is available here: https://www.gov.bm/sites/default/files/Court-Civ-2010-No-256-MDM-v-Collingwood-Robinson-Aug-10-2016.pdf

There are a number of points of interest in the judgment:

  • Marshall Diel & Myers Limited (which is now a limited liability company, not a partnership) represented itself through one of its directors/shareholders, Mark Diel, even though the conduct of its own fee-earners was the subject of complaint. No objection appears to have been taken to Marshall Diel & Myers Limited representing itself in this way, either by the Court or by the Defendant (who was represented by Kamal Worrell of Lions Chambers);
  • The Judge noted that this was “an unfortunate case in which something has gone badly wrong with the relationship between the Defendant and his attorneys. It is a matter of regret that the parties were unable to reach a reasonable compromise over the Plaintiff’s outstanding legal fees“;
  • The Judge found that a contractual term contained in the law firm’s General Terms of Business , to the effect that the client was obliged to dispute any Invoice within 30 days of receipt, was legally valid and binding (with the consequence that the client’s failure to dispute an Invoice within 30 days of receipt meant that it could not subsequently be challenged by him in Court). The clause in question read as follows: “Billing is usually on a monthly basis. It is expressly understood that you have thirty days from receipt of the bill to question any item and after this time this bill is accepted as accurate, due and owing“;
  • Assuming (contrary to his primary finding), that the client was entitled to challenge an Invoice after 30 days, the Judge dealt with the allegation of professional negligence/breach of contract by accepting that it would have been “good practice” for Marshall Diel & Myers Limited to have offered advice to the client to the effect that his dispute could potentially have been resolved more cost-effectively in the Family Court than in the Supreme Court, but that the alleged omission not to do so did not amount to a material breach of contract. The Judge declined to determine any allegations that there had been a breach of the Barrister’s Code of Professional Conduct 1981;
  • More generally, the judgment offers an illustration of some of the costs, delays, and difficulties associated with international child custody disputes, whether contested in the Supreme Court or in the Family Court.

The story has now also been covered by the Royal Gazette:

http://www.royalgazette.com/news/article/20160818/custody-battle-costs-father-129000

 

 

 

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