Hameed v Qayyum & Ors

In a contingent-fee agreement, a condition that payment is due when a settlement is achieved as a result of the claimant’s services is satisfied if those services were an effective cause of the relevant settlement. They need not be the sole cause in a complex multi-party negotiation. The receipt trigger must be construed against the factual matrix, the agreement as a whole and its commercial purpose. Where settlement necessarily requires payment into an independent trust for beneficiaries represented by an unincorporated association, receipt by the trustees can fall within a clause referring to receipt by the association or anyone on its behalf. A construction that permits the association to defeat an earned fee, or makes the agreement unworkable, should be rejected. Settlement of a separate claim outside the agreement’s purpose does not deprive the claimant of the fee for the specified settlement.

Hameed v Qayyum & Ors concerned a claim for a 2% contingent fee under a written service agreement made with three representatives of the BCCI Campaign Committee, an unincorporated association of former employees. The agreement covered assistance in settling the Luxembourg appeal and Staff Benefit Fund Litigation.

Mitting J gave judgment for the claimant in the sum of $1,115,890.40 and ordered indemnity costs: [2005] EWHC 1150 QB. The first and second defendants appealed, challenging the construction of the receipt provision and seeking permission to renew a challenge to the finding that the claimant had been an effective cause of the settlement. The central issues were whether payment of $50 million to independent trustees triggered the fee and whether the separate $20 million staff-loan settlement defeated the claim.

1. Disposition. Lord Justice Chadwick delivered the judgment of the court. Lord Justice Keene and Sir Peter Gibson agreed. The appeal was dismissed, and permission to appeal on the additional ground was refused.
2. Effective cause. In a complex multi-party negotiation, the contractual requirement that the settlement result from the claimant’s advice, assistance, negotiations or resources did not require the claimant to be the sole or only effective cause. The judge was entitled to find that the claimant’s efforts were an effective cause of the $50 million settlement.
3. Construction of the receipt clause. The expression the CC or anyone on its behalf receives had to be construed in the factual and contractual context. Payment into an independent, court-approved trust was an inevitable precondition of a settlement binding the relevant former employees. Receipt by trustees of money held for the benefit of those employees therefore fell within the clause, although the money was not paid directly to the Committee or to an agent holding it beneficially for the Committee.
4. Purpose of the agreement. The construction advanced by the defendants would have made the agreement unworkable and allowed the Committee to defeat an earned fee by accepting settlement terms that made no provision for payment to the claimant. The court preferred the construction that gave effect to the agreement’s purpose.
5. The $20 million staff-loan settlement was outside the agreement’s defined purpose. The claimant was entitled to the fee calculated on the $50 million received from the liquidators, despite not having negotiated every element of the overall settlement package.
6. The appellants were ordered to pay the respondent’s costs, summarily assessed at £19,000 including VAT. A payment of $685,000 was directed within 28 days, subject to any further order.

• Court of Appeal (Civil Division): The court dismissed the appeal against the order of Mitting J and refused permission to appeal to the House of Lords.
• High Court, Queen’s Bench Division: Mitting J entered judgment for the claimant for $1,115,890.40 and ordered the first and second defendants to pay costs on an indemnity basis: [2005] EWHC 1150 QB.