Nigeria
The litigation landscape in Nigeria is dynamic with the introduction of technology for virtual hearings since the outbreak of the COVID-19, the codification of insolvency practice, front loading of Court processes (that is all Court documents to be relied upon by parties are filed at the commencement of the matter) towards eradicating delays in the administration of matters, the introduction of final written addresses in place of oral legal arguments, as well as the rise in the uptake of alternative dispute resolution mechanisms.
The use of technology for the swift dispensation of matters will continue to rise and become popular. In addition, as a result of the global economic downturn from which Nigeria has not been insulated, there has been a rise in contract breaches and debt recovery matters.
1. Is third party funding permissible for disputes?
No, third-party funding for litigation is not permissible. Any agreement by a third party unrelated to the litigation to provide material support to a litigant in exchange for consideration contingent on the outcome of the litigation is strictly frowned upon, based on the well-known common law principles of champerty and maintenance. The Nigerian Courts have upheld this position in several cases such as Ediru v. Tijani and Egbor v. Ogbebor.
2. Are lawyers able to work on a contingent basis in the jurisdiction and are there any restrictions?
Yes, in Nigeria, lawyers are permitted to work on a contingency basis in civil matters whether contentious or not. The Rules of Professional Conduct for Legal Practitioners permits lawyers to enter into contingency fee arrangements with their clients, provided the arrangement is reasonable in all circumstances, the arrangement is not vitiated by fraud or contrary to public policy and there must be a bona fide cause of action.
3. Can the court or tribunal order one party to pay the other’s legal costs?
In Nigeria, it is typical for a Court or Tribunal to order that an unsuccessful party is to pay the legal costs of the successful party. However, the award of costs is at the discretion of the Court or Tribunal, subject to the applicable rules of the Court or Tribunal. Legal costs will usually include Court fees, legal fees, expert opinion fees and such related expenses.
The Court or Tribunal will usually consider the conduct of the parties during the litigation when awarding legal costs. It must be noted that the quantum of legal costs in Nigeria is minimal in comparison to what the successful party might have incurred in either pursuing or defending the case. The application for legal costs is not strictly formalised and not subject to any assessment.
4. Is insurance available to protect against adverse outcomes for funded litigation?
The concept of insurance to protect against adverse outcomes is unknown due to the common law principles of champerty and maintenance. Parties do bear their entire legal costs with minimal reimbursement by way of legal costs which is usually minimal if they are successful at the end of the litigation.
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