Crisis talks over unpaid fees rescue litigation titans’ relationship
The Lawyer can reveal that relations between leading London set One Essex Court and litigation giant Herbert Smith reached crisis point last year following a bust-up over unpaid bills - underlining increasing tension between solicitors and barristers over fees.
Herbert Smith set relationship partner Kevin Lloyd was forced to call a summit with One Essex Court senior clerk Darren Burrows after the firm failed to hand over barrister fees worth more than £500,000.
The fees related to a case that made headlines in 2008 when it emerged that Herbert Smith had projected fees totalling £50m. Partner Simon Bushell had instructed One Essex Court’s Neil Kitchener QC to work alongside in-house advocate Murray Rosen QC in representing Tajik Aluminium Plant (now known as Talco) in its $485m (£316m) dispute against Abdukadir Ermatov.
The claim, which settled four weeks into an 18-week trial in November 2008, centred on allegations of corruption and bribery made by Talco against former business partner Azar Nazarov, a Tajik businessman now based in the UK.
According to sources, the claimant failed to settle its legal bills with Herbert Smith and the firm therefore wanted to avoid paying its barrister team.
“Herbies got burnt quite badly on the case, they were left exposed,” one source said. “It’s a bit unfair. The barrister relies on the lawyer to be honourable and pay.”
The source said that in an effort to stop the relationship from going into full meltdown, Lloyd called a meeting with Burrows and Fountain Court director of clerking Alex Taylor, whose barrister Deepak Nambisan had been led by Kitchener.
“They [Herbert Smith] said they’re the top litigation firm and One Essex Court would have to play ball,” the source said. “But Darren wasn’t happy about that and refused.”
Following the crisis talks it is understood that Herbert Smith has just begun handing the set instructions again - 15 months after the case.
In a statement the set said: “One Essex Court does not ordinarily comment on its relationship with individual clients. That said, our fees have been settled on this matter and there are no outstanding issues. We’ve always enjoyed an excellent relationship with Herbert Smith and that continues to be the case.”
Herbert Smith added: “We don’t comment on confidential matters, but we can confirm we continue to enjoy healthy and ongoing relationships with One Essex Court.”
Readers' comments (7)
Anonymous | 1-Mar-2010 3:04 pm
The heart bleeds for those poor barristers. Not only do they get paid the full wack of a brief fee by the solicitors whether the case proceeds or not - they can also take on other work for that time (ie if it settles) without having to give credit. How many other professions can do that? What an outdated system -My sympathy lies with Herbies- 1, Essex Court should have shared the pain - all barristers should- and they should participate in the credit control exercise re the client.
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The Flashing Blade | 1-Mar-2010 3:07 pm
A strange message has been carved in the wall with swordpoint - it reads: Na na nah na, na na nah na, way ay ay goodbye...and there is a curious swordpoint drawing next to it of a barrister in full regalia making an L shape on his forehead...
Whatever can the masked avenger mean?
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Anonymous | 2-Mar-2010 5:39 pm
In my experience, counsel fall into two categories: those who will share the pain with their solicitors in the event of unpaid fees; and those who do not get instructed twice.
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Anonymous | 3-Mar-2010 6:35 pm
Sharing the pain is one thing. Simply not being paid (at all), despite being entitled to be (in full), is another. While one expects some sense of commercial reality from those at the commercial bar - including reducing fees (perhaps materially) where necessary - the truth is that getting money on account from the client and managing billing, payment, etc of invoices by the client, has to fall primarily to the law firm. I rather doubt HS would have responded kindly had the silk in question demanded money on account because he didn't trust HS to pay up (or to obtain money from their client and then pay up). As it turns out, of course, he should have done...
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Anonymous | 4-Mar-2010 9:50 am
" Not only do they get paid the full wack of a brief fee by the solicitors whether the case proceeds or not "
Try reading the article "The claim ...settled four weeks into an 18-week trial"
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Anonymous | 5-Mar-2010 11:31 am
Get real. I work in-house, and if I turned up one Monday and was told, sorry, we don't need you after all - you can take the rest of the month off. Oh, and by the way, we're not paying you your salary either. Not sure an employment tribunal would consider this reasonable behaviour. The truth is, these guys are self-employed, they pay all their own costs and pension and insurance out of hourly billing or briefs, and at the end of the day if they are on brief they have probably been turning down other work for the booked out time, so if it all settles then they otherwise they would just not get paid at all unless they happen to find some other work at short notice.
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Anonymous | 7-Mar-2010 10:50 pm
Anonymous how stupid of you to make that comment. You are really misinformed!! How annoying!
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