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HIGH COURT MALAYA KUALA LUMPUR
ARZIAH MOHAMED APANDI, JC
HASINA MEERA MAIDIN – Appellant
Versus
TETUAN RAJINDER & GOH & ORS – Respondent
Ratio Decidendi: A written fee-sharing agreement between an investor and a firm of solicitors, whereby the investor advances upfront legal fees to fund litigation in exchange for a percentage share of any judgment proceeds recovered, constitutes a valid and enforceable contract under sections 10 and 26 of the Contracts Act 1950, where there is good consideration in the form of the advance payment, free consent, and a lawful object that promotes access to justice by enabling meritorious claims to proceed despite the client's lack of funds; such an arrangement does not constitute prohibited touting under section 37 of the Legal Profession Act 1976 or rule 52 of the Legal Profession (Practice and Etiquette) Rules 1978 where the investor has a legitimate financial interest in the litigation outcome as a pre-existing stakeholder, actively funds costs beyond mere referral, and the agreement is transparent, documented on the firm's letterhead, signed by a solicitor in a professional capacity, and creates mutual binding obligations rather than a bare promise or unlawful commission for client procurement. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
Introduction
[1] This appeal spotlights a critical intersection between access to justice and legal ethics, examining whether an investor who funds litigation costs can legitimately contract with lawyers to share successful cases' proceeds. At its heart lies a written undertaking by the Respondent law firm to share 15% of judgment proceeds with the Appellant, who had advanced RM80,000.00.00 in legal fees to enable litigation that ultimately succeeded. The Sessions Court struck down this arrangement, finding it void for lack of consideration and contrary to professional conduct rules.
[2] The facts unfold against a backdrop where Indah Sebati Sdn Bhd, (ISSB) facing financial constraints, required funding to pursue legitimate claims against JKR Terengganu. The Appellant, already an investor in ISSB, stepped forward to fund the litigation by paying the Respondents' legal fees. The Respondents subsequently documented their undertaking to share proceeds in a letter dated 29 September 2017. When the litigation succeeded with a judgment of RM5,130,537.60, the Respondents received their fees but declined to honour their undertaking to the Appellant.
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