It has been a long-established right in common law for solicitors (and other professionals) to withhold their file of papers (or ‘exercise a lien’) until they have been paid in full by their client.
Such withholding of papers often leads to the parties resolving their dispute over fees, upon which time the papers are released to the client.
However, in the recent case of Ellis v John Hodge Solicitors  EWHC 2284 (Comm), the court had to determine whether it was fair for a firm of solicitors to withhold the production of their file in return for unpaid fees, where the client had brought a claim against the firm for professional negligence. The client argued that he needed disclosure of the file of papers in relation to his matter, so as to be able to properly plead his claim in professional negligence.
Mr Ellis had instructed John Hodge Solicitors (JHS) in a personal injury claim where he was claiming in excess of £500,000. During negotiations, the Defendant offered £200,000 by way of a Part 36 offer, which was rejected by Mr Ellis. Mr Ellis was subsequently only awarded just under £12,000 at trial. As such, despite winning his claim, Mr Ellis was liable for the Defendant’s costs from the date he rejected the offer, through to trial.
As a result of this, Mr Ellis refused to pay any costs to JHS. Mr Ellis’ position was that he had been poorly advised by JHS, and they had failed to advise him in relation to the consequences of failing to beat the Part 36 offer at trial and the risk that the Court may prefer the Defendant’s expert evidence.
Mr Ellis therefore pursued a claim against JHS for professional negligence and requested a copy of his litigation file from JHS. JHS asserted their lien over the file on the basis that Mr Ellis had not paid his outstanding fees. JHS’ position was that Mr Ellis had been properly advised and they counterclaimed for their professional fees.
As part of the negligence claim, the parties were obliged to provide disclosure of documents to each other, that would include Mr Ellis’ personal injury file. Mr Ellis argued this was necessary in order to allow him to properly prepare his claim. JHS argued that Mr Ellis could draft his claim without the file, and in any event had offered to disclose the file only to Mr Ellis’ new solicitors. Such an offer had been rejected, as it would be necessary for Mr Ellis to review the file himself and advise his new solicitors, and this would not have been possible if he was not able to see the file himself.
The court’s decision
Despite solicitors’ liens being around for over 200 years, there was no reported case law where a lien had been considered in connection with separate proceedings against the solicitors themselves. There had been a similar case where a firm of accountants had exercised a lien over papers, in which the court had determined that they had a general discretion in respect of a file that was subject to a lien.
The court looked at a number of circumstances in the relationship between the solicitors and Mr Ellis, including, but not limited to:
- How and why did the relationship end and who ended it
- The nature of the case
- The stage that the litigation had reached
- The conduct of both solicitor and client
- The balance of hardship which might result from any order the court was asked to make
Taking all of the above into account, the judge determined that JHS must release their file to Mr Ellis, despite there being outstanding fees owed to JHS.
It should be considered that the case was determined on its specific facts. Mr Ellis had an arguable case in negligence, that could only be explored further by reference to the file of documents that JHS were withholding.
Mr Ellis had already commenced a claim against JHS. It was not simply a speculative claim that he had raised in order to avoid paying his fees. If JHS had believed that there was no merit in Mr Ellis’ claim, it was still open to them to make an application to strike out his claim. No such application had been made.
Furthermore, as JHS had counterclaimed for their fees, the contents of their litigation file were clearly relevant to the counterclaim, as well as Mr Ellis’ negligence claim. Both the claim and counterclaim could only be properly considered if the file was disclosed.
In today’s modern society, clients will often have retained copies of many documents themselves, so they may not need a complete copy of their file in order to pursue any subsequent claim against the solicitor for negligence. Clients will need to show to the court that they have a good claim in negligence (for which they need further papers) before the court will order the file to be released.
As such, courts are therefore unlikely to prevent solicitors from exercising their lien over a file, unless there are other compelling reasons why they should do so.