UAE court orders client to pay Dh1 million in unpaid legal fees after cancelling lawyer’s mandate

Dubai’s Court of First Instance has ordered a client, along with a law firm and its director, to jointly pay Dh1.07 million in outstanding legal fees to a law office, after the client abruptly cancelled its mandate and failed to settle the agreed remuneration.

Court documents show that the law firm filed a lawsuit seeking payment of the outstanding fees, arguing that the first defendant had granted it a formal power of attorney to represent him in several real estate-related cases. According to Emarat Al Youm, the authorisation gave the firm broad powers, including the right to receive cheques and collect awarded sums.

Acting under this mandate, the firm represented the client in a series of lawsuits and appeals, including major real estate disputes, appellate proceedings, cassation challenges, and a case involving the deposit of funds with the court, in which the amount reached Dh10.7 million.

After the firm completed its legal work and submitted formal applications to release the deposited funds, it was surprised to receive an electronic notice from the first defendant abruptly cancelling the power of attorney. However, the following day, the client sent a written acknowledgement by email, explicitly confirming that the firm was entitled to Dh1.07 million in fees, stating that there was no objection to the firm receiving the amount and pledging not to retract this declaration under any circumstances.

The plaintiff said it later received a separate written undertaking from a second defendant, another law firm, confirming that it had been authorised by the client to receive the deposited funds and to pay the plaintiff’s fees immediately upon release.

Despite the funds being transferred, the defendants failed to hand over the agreed legal fees, even though the plaintiff had fulfilled its obligations, including waiving certain accounting claims to facilitate the release of the deposited amount.

The court appointed a financial expert, who concluded that the debt was valid and that the claim was based not on a written fee contract, but on a subsequent and explicit acknowledgement issued by the defendants, the authenticity of which was not disputed.

In its reasoning, the court ruled that the acknowledgement constituted a final and binding agreement that could not be revoked unilaterally. It also found that the second and third defendants had acted as guarantors, jointly liable for ensuring payment of the fees owed by the first defendant.

The judgment cited Article 46 of Federal Decree-Law No. 34 of 2022 regulating the legal profession, which affirms a lawyer’s right to remuneration for work performed under a valid mandate. The court also referred to Article 57, which obliges a client to pay full fees if a lawyer is dismissed without legitimate cause after work has begun.

The court further relied on established rulings by Dubai’s Court of Cassation, which confirm that the burden of proof may shift between parties and that courts may rely on expert reports if they are satisfied with their findings.

The court ultimately ordered the defendants to jointly pay Dh1.07 million, along with annual legal interest of 5 per cent from the date the lawsuit was filed until full settlement. They were also ordered to cover court fees, expenses, and Dh1,000 in legal costs.