Higgins & Ors v TLT LLP

A solicitor’s retaining lien may be overridden where the retainer was terminated by the client and the solicitor’s conduct amounted to misconduct. Misconduct is not confined to professional or disciplinary offences, and it does not require dishonesty or moral turpitude. Mere negligence will generally be insufficient, but very serious or gross negligence, including a series of failures demonstrating a high degree of incompetence or lack of care, may qualify. Once that threshold is met, the court retains a discretion to order delivery up of the file. The discretion requires consideration of the circumstances, including prejudice to the solicitor and protection of the lien through an undertaking.

The claimants had instructed the defendant solicitors in proposed proceedings concerning allegedly negligent tax advice and related matters. The defendant failed to serve the claim form in time and in accordance with the rules. The claim was consequently struck out by His Honour Judge Pelling QC on 18 September 2017.

The claimants instructed new solicitors and sought delivery up of their file so that they could assess and pursue a second claim, including the possible application of section 14 A of the Limitation Act 1980. The defendant refused to release the papers, relying on a solicitor’s retaining lien for unpaid disbursements. The central issue was whether the defendant’s conduct amounted to misconduct sufficient to justify overriding the lien. An alternative application sought pre-action disclosure under CPR rule 31.16.

1. The application succeeded. The defendant was ordered to deliver up the relevant papers at the earliest opportunity, subject to an undertaking by the claimants’ current solicitors to protect the lien consistently with the use of the documents for assessing and pursuing the proposed claim.
2. The retainer had effectively been terminated by the claimants in circumstances involving a repudiatory breach. It was immaterial that the reasons given in correspondence were not fully or accurately expressed, provided that sufficient reasons in fact existed. Continued representation by the defendant would have been unrealistic because of the serious conflict of interest created by its earlier failures.
3. In French v Carter Lemon Camerons LLP [2012] EWCA Civ 1180, the Court of Appeal had summarised the relevant principles governing a solicitor’s retaining lien. The present court held that misconduct in this context is not restricted to professional or disciplinary misconduct. It need not involve impropriety, moral turpitude or dishonesty.
4. Mere negligence, or an isolated negligent error without aggravating features, would be unlikely to amount to misconduct. However, serious negligence may qualify where the conduct falls outside the norm and calls into question the professional’s overall competence or carefulness. Gross negligence would suffice. The defendant’s repeated and cumulative failures concerning service of the claim form amounted to incompetence on a fairly grand scale and satisfied that threshold.
5. The court then exercised its discretion to override the lien. Relevant considerations included the importance of the documents to the proposed claim, the claimants’ inability readily to replicate them, the potential conflict between the parties, the possible prejudice to the defendant through diminution in the value of its lien, and the undertaking offered.
6. It was unnecessary to determine the alternative application for pre-action disclosure under CPR rule 31.16. The court expressed considerable doubts about whether such an order would have been appropriate.

The judgment itself records that His Honour Judge Pelling QC struck out the claimants’ earlier claim on 18 September 2017 after finding that the claim form had not been validly served. That earlier decision formed part of the factual background to this first-instance application.