A series of recent decisions provide important guidance for litigators over securing fees when a client goes bust, says Grania Langdon-Down
London litigation boutique CANDEY (Candey) acted for Peak Hotels and Resorts Limited (Peak) in a highly charged takeover battle in the luxury hotel industry running across four jurisdictions. When Peak subsequently went into liquidation, the law firm found itself in dispute with the liquidators at KPMG, Russell Crumpler and Sarah Bower, over its fees.
Ashkhan Candey, the law firm’s managing partner and head of corporate and commercial disputes, says: ‘The question what to do when your client goes bust is a critical issue for law firms, whether the case is being funded by fixed fees, conditional fee agreements (CFAs) or damages-based agreements (DBAs).’
His firm had agreed a fixed fee of £3.8m to help Peak’s cash flow halfway through the litigation. By the time the hotel company went into liquidation, Candey had done about £1.2m of work based on its usual hourly rates. The law firm claimed to be a secured creditor for the full amount of the fixed fee but the liquidators challenged the
