Bott & Co Solicitors Ltd v Ryanair DAC

A solicitor acting for a potential claimant has an equitable lien where services within the retainer relate to making a legal claim and significantly contribute to the client’s successful recovery of a fund. Neither commenced proceedings nor an actual or reasonably anticipated dispute is required.

The contribution threshold is low. The work need not be complex, predominantly manual or the sole cause of recovery. Transactional work remains excluded. The lien secures only costs contractually due and binds a payer who has notice of it, exposing the payer to double liability if payment is instead made directly to the client.

Bott & Co acted for air passengers claiming fixed compensation from Ryanair under Regulation (EC) No 261/2004. Its conditional fee arrangements authorised deduction of its charges from compensation received. Ryanair began paying compensation directly to Bott’s clients, despite knowing of Bott’s retainer and charges.

Bott sought an injunction and an indemnity based on a solicitor’s equitable lien. The High Court rejected the claim: [2018] EWHC 534 (Ch). The Court of Appeal dismissed Bott’s appeal: [2019] EWCA Civ 143. It held that a lien arose only when Ryanair disputed a claim because Bott’s earlier work was not litigation work of the kind protected by equity.

The central issue was whether a solicitor’s equitable lien requires an actual or reasonably anticipated dispute, or whether pursuing a legal claim and significantly contributing to recovery is sufficient.

1. By a majority of three to two, the appeal was allowed. Lord Burrows formulated the governing test, with which Lord Briggs and Lady Arden agreed. A solicitor acting for a potential claimant has an equitable lien where services within the client’s retainer relate to making a legal claim, with or without proceedings, and significantly contribute to the client’s successful recovery of a fund. An actual or reasonably anticipated dispute is unnecessary: paras 86–88, 102, 122, 179–180.

2. The claim-based test supplies a sufficiently clear and predictable boundary. Solicitors deciding whether to act on credit, and potential defendants deciding whom to pay, should not have to speculate whether a future claim is likely to be disputed. The test covers the earliest work pursuing a claim, including a pre-action letter, and applies whether recovery follows litigation, arbitration, mediation, negotiation or immediate payment: paras 154–170.

3. The requirement that the recovery result from the solicitor’s instrumentality imposes a low threshold. The work need not be legally complex, predominantly manual, the sole cause of recovery or even the effective cause. Bott’s work significantly contributed to recovering compensation, notwithstanding Ryanair’s online process and the relative simplicity of the claims: paras 83, 86, 93, 97, 125, 154 and 180.

4. Transactional work remains outside the lien. The lien is an incident of a retainer to pursue a claim, rather than a retainer to conduct a transaction. A payment reminder sent during transactional work does not become a claim merely because a solicitor sends it: paras 94 and 175–177.

5. Gavin Edmondson Solicitors Ltd v Haven Insurance Co Ltd [2018] UKSC 21 was applied. It had implicitly overruled the rule in Meguerditchian v Lightbound [1917] 2 KB 298 that proceedings must have been issued. The latter decision remained supportable on its separate finding that the earlier work did not contribute to the recovered property: paras 81 and 106.

6. The lien is an equitable property right securing only costs contractually due. A payer with notice takes the risk of double liability by paying the client directly. Ryanair had the requisite notice, and no established discretionary or clean-hands ground justified refusing relief: paras 98, 100–101, 127–136 and 166.

7. Lord Leggatt and Lady Rose dissented. They would have required an existing or reasonably anticipated dispute and held that most flight-compensation claims involved only collection of undisputed, automatically quantified debts: paras 64–75.

1. United Kingdom Supreme Court: By a majority of three to two, allowed Bott’s appeal from [2019] EWCA Civ 143.
2. Court of Appeal: Dismissed Bott’s appeal, holding that no equitable lien arose unless and until Ryanair disputed a claim: [2019] EWCA Civ 143; [2019] 1 WLR 3375.
3. High Court, Chancery Division: Dismissed the claim because the lien did not arise where compensation was paid without proceedings: [2018] EWHC 534 (Ch); 2018 3 Costs LO 275.