French v Carter Lemon Camerons LLP

A solicitor’s entitlement to a retaining lien depends on how the retainer ended. Where the client terminates the retainer, absent misconduct, the solicitor may retain client papers for unpaid fees. Termination is determined from the parties’ communications viewed as a whole, with particular weight given to how matters stood at the end rather than to isolated ambiguous statements. A purported termination by the solicitor raises different consequences, including possible delivery to new solicitors subject to safeguards. On the facts, the solicitors had not repudiated the retainer. The client’s later email clearly terminated it, so the lien remained and the application for release of the documents was rightly dismissed.

Ms French retained Carter Lemon Camerons LLP under a conditional fee agreement in ongoing insurance litigation. Following complaints about the solicitors’ conduct, communications took place concerning whether the retainer would continue. The solicitors attended a case management conference, but Ms French later requested her files so that she could act in person.

Master Foster dismissed her application for release of the documents and awarded costs. The Deputy Judge, sitting in the High Court, dismissed her appeal in [2011] EWHC 3252 (QB). The Court of Appeal considered whether the solicitors had repudiated the retainer and, alternatively, whether a solicitor who discharged himself could maintain a retaining lien over papers in continuing litigation.

1. Disposition. The appeal was dismissed unanimously. Mr Justice Morgan gave the judgment, with Lord Justice Stanley Burnton and Lord Justice Lloyd agreeing. The Master and the Deputy Judge reached the correct result, although the reasons were not identical.
2. Repudiation. The court recorded, without needing to decide, the contractual proposition advanced by Ms French: a solicitor’s retainer may be an entire contract, and acceptance of a repudiatory termination could end the retainer without entitlement to payment for part performance. That proposition was relied on from Richard Buxton v Mills-Owen [2010] 1 WLR 1997, following Underwood, Son & Piper v Lewis [1894] 2 QB 306.
3. The communications on 13 and 14 May 2010 did not amount to a repudiatory termination. The statements at the meeting were varied and ambiguous, Ms French did not accept any immediate termination, and the solicitors continued to act at the case management conference. The subsequent letter stated that any decision on continuation or termination was deferred. The parties’ communications did not establish a separate retainer limited to that conference or a notice taking effect immediately afterwards.
4. Ms French’s email of 24 May 2010, read as a whole, clearly terminated the retainer. Her criticisms, statement that she had no choice, and request for the file so that she could act in person outweighed qualified language and requests for a response. The retainer therefore ended when she discharged the solicitors.
5. Under the established principles summarised in Gamlen Chemical Ltd v Rochem Ltd [1980] 1 WLR 614, a client’s discharge of the solicitor, otherwise than for misconduct, does not remove the solicitor’s retaining lien for unpaid fees. Where the solicitor discharges himself, the court may instead order delivery to new solicitors subject to undertakings preserving the lien, normally to prevent the litigation suffering serious harm. The present case was not advanced as one involving misconduct or exceptional circumstances. The solicitors were therefore entitled to retain the documents, and the application for their release was rightly dismissed.

• Court of Appeal (Civil Division): In [2012] EWCA Civ 1180, the appeal was dismissed. The court held that Ms French, rather than the solicitors, terminated the retainer and that the retaining lien therefore remained available.
• High Court of Justice, Queen’s Bench Division: The Deputy Judge dismissed Ms French’s appeal from Master Foster’s decision in [2011] EWHC 3252 (QB), holding that the retainer had been regularly terminated and that the solicitors could assert a lien.
• Master Foster: The application for release of the documents was dismissed, with costs summarily assessed at £8,000.