Lawyers are contracted for results – Newspaper Kommersant No. 62 (7507) dated 04/11/2023

The Supreme Court of the Russian Federation (SC) recognized that legal services can be aimed at achieving a specific result and benefit for the customer, and this serves as a criterion for their evaluation along with the performance of actions themselves. If the “useful goal” is not achieved due to the fault of the contractor, the services of a lawyer can not be paid, as in the contract. Previously, practice proceeded from the fact that in a service contract, payment is made for the process, and not for the result. Experts say that the position of the Supreme Court can seriously change the relationship between lawyers and clients.

The Supreme Court clarified how to evaluate the fulfillment of obligations under a legal services agreement. Consultant LLC and City Building Company LLC in November 2017 entered into an agreement under which the Consultant undertook to pay 11.1 million rubles. provide a number of legal services, including support for the process of participation in the auction, preparation and submission of an application and other documents, as well as assistance with registration of a lease agreement for premises in the center of Moscow. The parties agreed that the contractor “is not responsible for the actions of government agencies, but is obliged to make every effort and experience so that a lease agreement is concluded with the customer.”

City Building Company won the tender and signed a lease agreement with the Agency for the Management and Use of Historical and Cultural Monuments (the rented premises belong to cultural heritage), but Rosreestr did not register it, noting that some information was inconsistent or missing. The court found the refusal legal, and the contract was terminated. Konsaltyurist asked the court to recover 7.4 million rubles from the customer. for part of the unpaid services, and the City Building Company filed a counterclaim, demanding to terminate the contract for the provision of legal services and recover 11.1 million rubles from the contractor. unjust enrichment.

The courts of three instances took the side of the performer. Having collected the payment, they indicated that the failure to achieve the result “cannot serve as a basis for recognizing the services as not rendered, and their payment is not made dependent on the registration of the lease agreement” (see “Kommersant” dated February 22).

City Building Company complained to the Supreme Court, emphasizing that since the purpose of the services was the signing and registration of a lease agreement, it was primarily “achieving a certain material result” that mattered. If the goal is not achieved, then “the contract cannot be considered properly executed.” In addition, according to the complaint, the Consultant is a professional in the field of legal support, who was supposed to “assess the risks of failure to achieve the purpose of the contract and warn the customer in a timely manner.” The Economic Collegium of the Armed Forces canceled all court decisions.

The SC explained that “despite the difference in the subject matter of the contract for the provision of services (performing certain actions or activities) and the contract for the provision of services (the achievement of a certain result)”, the provision applied to determine the quality of the work of the contractor “applies to the provision of services”. Such regulation corresponds to the principle of “reasonableness, that is, expediency and consistency in the exercise of civil rights and the performance of duties.”

The Collegium emphasized that legal services are in any case of interest to the customer “not in themselves, they must be aimed at achieving a certain result”, which is usually indicated as “some benefit for the customer”. If the goal is not achieved, the court can compare the volume and quality of the actions performed by the executor, as well as “assess the degree of effort” that he had to make. As a result, it is necessary to determine whether the failure to achieve the result was “an omission of the performer or was beyond his reasonable professional and conscientious actions.” Meanwhile, the courts did not establish either the actual volume of services rendered, or whether they were aimed “to achieve a result specified in the contract.” As a result, the Supreme Court sent the dispute for a new consideration.

Sergei Uchitel, a partner at KA Pen & Paper, believes that VS has “opened a Pandora’s box” in the relationship between lawyers and clients. BGP Litigation’s dispute resolution and bankruptcy lawyer Anton Baturin explains that the court’s position gives customers “more opportunities to protect themselves from unscrupulous lawyers.” At the same time, in his opinion, it is necessary to “avoid formal interpretation” in the spirit of “since the work of a lawyer has not been successful, then it is not worth the money.” In any case, both lawyers and their clients need to “pay attention to the wording of service agreements,” Mr. Baturin emphasizes.

ProLegals partner Elena Kravtsova believes that contractors will have to “more clearly define the criteria for the fact of providing services” and there is a possibility of “changes in the principles of work in the market, when customers will increasingly tie payment to the result.” If the parties indicated in the contract “the achievement of specific goals as a factor in determining payment, then without receiving the result there can be no payment,” adds Artem Komsyukov, head of the Arbitrazh.ru law firm office.

Meanwhile, Mr. Baturin clarifies, the Supreme Court left open the question of how to resolve the issue of payment in relation to “multi-stage contracts”, for example, “if the contractor completed nine out of ten stages qualitatively, and at the last one made a mistake, due to which all previous work was lost meaning”.

At the same time, Mr. Uchitel adds, the position of the Supreme Court “cannot be extended to an agreement with a lawyer,” since, by virtue of the law on the legal profession, he, in principle, “is not entitled to guarantee the occurrence of any result.” Therefore, the expert believes, before evaluating the quality of services, it is first necessary to “regulate the legal profession itself and establish minimum standards for this or that type of legal assistance.”

Ekaterina Volkova