The DIFC Court of First Instance confirms that contractual obligations, including success fee arrangements, can be binding through the conduct of the parties, even in the absence of a signed engagement letter.
What was the specific nature of the dispute between Michael George Forbes and Robert Kidd regarding the GBP 4,599,352.22 success fee?
The dispute centered on a claim for a success fee arising from litigation support services provided by Sarcogent Solutions DMCC to Robert Kidd. The Claimant, Michael George Forbes, acting as the assignee of Sarcogent’s rights, sought to recover a fee based on the successful outcome of litigation against Paull & Williamsons and Burness Paull LLP. The core of the disagreement involved whether a Letter of Engagement (LoE) dated 21 November 2016, which stipulated a 20% success fee on net recoveries, was binding upon Mr. Kidd. While the Defendant initially contested the validity of the assignment and the existence of a contract, the primary issue at trial was whether Mr. Kidd’s continued instructions constituted acceptance of the terms set out in the LoE.
The financial stakes were significant, reflecting the successful recovery in the underlying Scottish litigation. The court ultimately found in favor of the Claimant, determining that the contractual terms were enforceable. As noted in the judgment:
Judgment is therefore to be given for the Claimant, Mr Forbes against the Defendant, Mr Kidd, in the sum of GBP 4,599,352.22 126.
Further details regarding the claim can be found at the DIFC Courts website.
Which judge presided over the proceedings in Michael George Forbes v Robert Kidd [2023] DIFC CFI 081?
The matter was heard before H.E. Justice Sir Jeremy Cooke in the DIFC Court of First Instance. The procedural history included a Case Management Order issued on 14 August 2024, a Pre-Trial Review on 26 May 2025, and the final trial, which took place between 18 and 24 July 2025. The final judgment was handed down on 7 August 2025.
What were the primary legal arguments advanced by David Parratt KC and Craig M. Murray KC regarding the Letter of Engagement?
Counsel for the Claimant, David Parratt KC and William Frain-Bell KC, argued that the Letter of Engagement was a binding contract, asserting that even if Mr. Kidd had not physically signed the document, his conduct—specifically his continued instructions to Sarcogent regarding the Scottish litigation—amounted to acceptance of the terms. They emphasized that the LoE contained an express clause stating that "continuing instructions in this matter will amount to your acceptance of the contents of this engagement letter."
Conversely, Craig M. Murray KC, representing Mr. Kidd, challenged the existence of the contract, arguing that the terms were never formally agreed upon and that the services provided by Sarcogent were not legally compensable under the proposed fee structure. The defense initially questioned the validity of the assignment of rights from Sarcogent to Mr. Forbes, though this point was eventually conceded during the proceedings. The defense sought to characterize the relationship as lacking the necessary mutual consent required for a binding agreement under the applicable law.
What was the precise doctrinal issue the court had to resolve regarding the formation of the contract?
The court was tasked with determining whether a contract had been formed through the conduct of the parties under the relevant legal framework. The central issue was whether the Defendant’s ongoing engagement with the Claimant’s assignor, despite the lack of a countersigned Letter of Engagement, satisfied the requirements for mutual consent. The court had to evaluate whether the circumstances surrounding the provision of litigation support services left any doubt as to the Defendant’s intent to be bound by the terms, including the 20% success fee provision.
How did Justice Sir Jeremy Cooke apply the test for acceptance by conduct?
Justice Sir Jeremy Cooke applied the principles of contract formation, specifically focusing on whether the Defendant’s actions demonstrated an unequivocal acceptance of the terms proposed by Sarcogent. The court examined the evolution of the fee proposals, noting that the terms had been communicated clearly to the Defendant. The judge emphasized that the test for acceptance by conduct requires an objective assessment of the parties' behavior.
In determining whether the requirements for mutual consent were met, the court looked to the specific provisions of the governing law:
Where Article 132 speaks of “adopting any other course in respect of which the circumstances leave no doubt that they demonstrate mutual consent” , it was for the Court to decide, on the balance of probabilities, whether such doubt existed.
The court concluded that the Defendant’s continued receipt of services and his failure to object to the terms, coupled with the explicit language in the LoE regarding acceptance by conduct, left no doubt that a binding agreement existed.
Which specific statutory provisions and rules were central to the court’s analysis?
The court’s analysis was grounded in the principles of contract formation, specifically referencing Article 132 of the relevant civil law framework governing the DIFC. The court also relied on the Rules of the DIFC Courts (RDC) regarding the assessment of costs and the enforcement of contractual obligations. The Letter of Engagement itself was treated as the primary evidence of the parties' intentions, with the court scrutinizing the specific clauses regarding "Scope of Engagement" and "Fees and expenses."
How did the court utilize previously decided cases in its reasoning?
The court referenced the evolution of the fee terms, noting that the agreement was not a static document but one that had been negotiated over time. The court highlighted the transition from earlier proposals to the final terms, noting:
It is clear that there was some evolution in the terms put forward, including in particular the reduction from 25% to 20% and the changes in Mr Forbes’ proposal of 28 July 2014 with the hourly fees of GBP 150 per man hour for Sarcogent. 86.
By tracing this history, the court demonstrated that the Defendant was fully aware of the terms he was accepting through his conduct. The court distinguished this case from scenarios where terms are ambiguous, finding that the clarity of the communications between the parties precluded any argument that the Defendant was unaware of the success fee structure.
What was the final disposition and the specific relief granted to the Claimant?
The court found in favor of the Claimant, Mr. Forbes, and ordered the Defendant, Mr. Kidd, to pay the success fee as claimed. The court also addressed the matter of costs, ordering that the Defendant bear the Claimant's legal costs on a standard basis.
The formal orders were as follows:
Judgment is entered in favour of the Claimant in the sum of GBP 4,599,352.22. 2.
Regarding costs, the court ordered:
The Defendant is to pay the Claimant’s costs of this action on the standard basis to be the subject of assessment if not agreed. 4.
What are the wider implications of this judgment for practitioners handling success fee agreements in the DIFC?
This judgment serves as a significant reminder that the DIFC Courts will uphold contractual terms that are accepted by conduct, even in high-value litigation support agreements where a formal signature is absent. Practitioners must advise clients that continuing to provide or accept instructions after receiving an engagement letter—even one that has not been signed—carries a high risk of being deemed an acceptance of the terms contained therein. The case underscores the importance of clear communication and the necessity of documenting any objections to proposed terms immediately to avoid the application of the "acceptance by conduct" doctrine.
Where can I read the full judgment in Michael George Forbes v Robert Kidd [2023] DIFC CFI 081?
The full judgment can be accessed via the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/michael-george-forbes-v-robert-kidd-2023-difc-cfi-081. The text is also available via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-081-2023_20250807.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- DIFC Courts Law
- Rules of the DIFC Courts (RDC)
- UAE Civil Code (Article 132)