LSP087: Inquiries into Lawyers’ Professional Fees

Just like every other service provider around the world, a legal practitioner is meant to provide a legal service for his client for a professional fee mutually agreed between them. 

While the payment for legal services is not contestable, the question then becomes whether a lawyer is required by law to investigate the source of money paid to him in order to ascertain that the fees are not proceeds of unlawful activity. 

This legal question was one of the issues for determination in Federal Republic of Nigeria v Chief Mike Ozekhome(SAN) 2021 LPELR-54666(CA). In that case, there was an allegation of embezzlement of the arms deal money leading to an investigation by the Economic and Financial Crimes Commission (EFCC). 

In the course of the investigation, EFCC approached the Lagos division of the Federal High Court presided by and obtained an interim order to freeze some bank accounts linked to Governor Ayodele Fayose, the former Governor of Ekiti State. Mr. Fayose subsequently approached the Ado Ekiti division of the same and obtained judgment setting aside the earlier order.  

Upon obtaining the judgment, Fayose withdrew N5 million from the account and transferred N75 million to the law firm of Mike Ozehkome as part payment of professional fees. EFCC then proceeded to the Lagos division of the court to obtain an interim order freezing Mike Ozehkome’s Chamber account with Guaranty Trust Bank. 

Thereafter, Mike Ozehkome applied to the same judge and subsequently obtained an order of the court setting aside the freezing of his law firm’s account. EFCC appealed and the Court of Appeal upheld the judgment of the lower court defreezing Mike Ozehkome’s Chamber account.

Delivering the lead judgment, Chidi Nwaoma JCA held, “The learned counsel to the Appellant had argued that the Respondent ought to have known that the source of money paid to him as professional fees was from an illicit act or “proceeds of unlawful activities… no doubt a Legal Practitioner is entitled to his fees for professional services rendered and such fees cannot be rightly labeled as proceeds of crime. Further, it is not a requirement of the law that a legal practitioner would go into inquiry before receiving his fees from his client, to find out the source of the fund from which he would be paid. There was nothing on record at the time the money was paid to the Respondent’s Chambers to show that the money was from the proceeds of unlawful activities and the lower Court was right not to have agreed that the money was from unlawful activities.” 

Based on this, the established principle of law is that there is no legal obligation on a lawyer to inquire about the source of the money meant for his professional fees. And it’s also immaterial that the person who made the payment was under criminal investigation. 

Thank you for reading. See you next week.