The Tribune

A trade union leader yesterday said there was “no way” he would have agreed to an illegal ‘contingency fee’ in taking on Sandals Royal Bahamian all the way to the Privy Council.

Obie Ferguson, the Trades Union Congress’s (TUC) president, told Tribune Business that the claims by the resort, trading as West Bay Management, and its attorneys also “don’t make sense” given the level of financial risk he would have been exposed to.

Mr Ferguson was speaking after the Court of Appeal, in a December 7, 2017, ruling gave its reasons for dismissing Sandals’ claim that Mr Ferguson and the Bahamas Hotel, Maintenance and Allied Workers Union had breached the law of champerty in relation to a Bill of Costs.

Champerty is an illegal agreement in which a person with no previous interest in a lawsuit finances it, with the aim of sharing in the proceeds if the action succeeds.

The Bill of Costs had been submitted to the Supreme Court for taxation, as the union sought to recover legal fees paid to Mr Ferguson after winning one of its many court-room battles with Sandals.

The West Bay Street-based resort and its attorney, Ferron Bethell of Harry B. Sands & Lobosky, challenged the Bill of Costs after finding out it had been submitted to the union for the first time in October 12, 2012 - more than four years after the legal work it related to was completed.

The Bill of Costs was also sent to the union 14 months after being lodged with the Supreme Court for taxation, and Sandals argued this was sufficient reason to strike it out as it was a “contingency fee agreement” that breached the Bahamas Bar Association’s (Code of Professional Conduct) regulations and the law, rendering it “unenforceable”.

Both Justice Ian Winder, sitting in the Supreme Court, and the deputy registrar rejected Sandals’ argument on the grounds that “there was no direct evidence of a conditional fee agreement” between the union and its attorneys. It was a verdict the Court of Appeal upheld.

Mr Ferguson yesterday told Tribune Business it “was never the case” that he and the union had reached a ‘contingency fee’ arrangement, where his compensation depended on winning the legal battle against Sandals.

“They [the union] had signed a retainer agreement, and a bill of costs was prepared, but somehow Mr Bethell was of the view that it was done on a contingency basis,” he said. “I told him we could not have done that because it’s contrary to law in the Bahamas. It was never the case, and it would have been difficult for me to go all the way to the Privy Council.

“The question of doing the case on the basis of being paid if successful, no, no. They could not produce any evidence to suggest I had engaged with anyone from the union, or any officer of the union, that if I won I would collect my fees from Sandals.

“You can do that in the US, but not in UK common law jurisdictions, and I can understand why,” Mr Ferguson added. “The interest will be in you rather than the client. You’d be focused more on what you will get out of the case rather than dealing with the law at hand.

“To go to the Privy Council also costs some money. No way would I agree in advance to make my fees subject to whether I win or not. That does not add up. It doesn’t make sense. If I have to go to the Privy Council, who’s going to pay for that? I certainly wouldn’t do it, and the firm will not do it.”

Mr Ferguson and the union, in arguments before the Supreme Court, alleged that Sandals’ Bill of Costs challenge stemmed from the fact that it was doing “everything not to pay” the union’s legal costs.

The Court of Appeal judgment recorded how Sandals sought its permission to have the issues raised by its case “certified as a point of law alone of general public importance”.

“[Sandals] asserted that the certification sought...... does indeed raise a point of law of general public importance, and that this court must determine whether a conditional fee arrangement ought to be allowed, contrary to the rules of professional conduct for members of the Bahamian Bar, which prohibits such agreements as repugnant to public policy,” the Court of Appeal said. 

“The appellant also contended that the general public importance aspect of the point of law is reflected in the public policy reasons against contingency agreements.”

But, rejecting Sandals’ claim, the Court of Appeal found: “We considered all of the appellant’s submissions and authorities, and agree with [Justice Winder’s] decision that on the circumstantial evidence advanced there was no evidence of a conditional fee agreement in existence.

“In the circumstances, we found that the appellant had not crossed the first hurdle; that is, that his grounds of appeal involved any point(s) of law alone. We were also not satisfied that the appellant had demonstrated that there was any point of law of general public importance arising out of the judge’s decision to be considered.”

However, the Court of Appeal said there were other avenues open to Sandals in challenging the Bill of Costs when the taxation hearing was held before the Supreme Court registrar.