Disclosure Of A Solicitor’s File: Ellis v John Hodge Solicitors (2022)

The issue of ownership of a client’s files held by a solicitor is a highly contentious area. The starting point is what the retainer between the parties say. It is well established that a solicitor can exercise a ‘lien’ over papers where fees are owed to them by the client. See previous blog on this subject. It should also be noted that a client is not entitled to everything from their file as explained in our previous blog

However, a solicitor’s entitlement to exercise their lien was called into question in the case of Ellis v John Hodge Solicitors (2022) where the client had in fact commenced legal proceedings for professional negligence.

The Facts

John Hodge Solicitors were instructed by Mr Ellis in a personal injury matter arising from an accident on 29 April 2014.

The case eventually settled at trial in summer 2018 for over £10,000. However, the insurers had made previous offers including one for £200,000 to Mr Ellis which he had rejected, as he was seeking a sum in excess of £500,000.

Mr Ellis therefore bought a claim against the Defendant firm for failing to properly advise him on the consequences of failing to beat the offers and the risks of litigation.

The Defendant firm accepted that their file of papers was highly relevant but refused to provide disclosure of the same on the grounds it was exercising a lien for unpaid fees.

The issue had to be determined at the Case Management Conference in August 2022.

The Relevant Law

The relevant principles, as established in the case of Donaghy v JJ Haughty Solicitors (2019) were:

• i) Subject to any agreement to the contrary, a solicitor has a common law right to exercise a general lien in respect of his costs on any property belonging to his client which properly comes into the solicitor’s possession in that relationship.
• ii) Solicitors as officers of the court are subject to its supervisory jurisdiction and the court can therefore interfere with the enforcement of the common law lien on equitable principles.
• iii) Where it is the solicitor who terminates the retainer, the court will normally make an order obliging the original solicitor to hand over the file to the new solicitor against an undertaking by the new solicitor to preserve the original solicitor’s lien
• iv) Where the client terminates the retainer, this is a weighty factor against interfering with the exercise of the lien, but the court retains the power to do so on equitable principles;
• v) When invited to interfere with the exercise of the lien, the court should make the order which best serves the interest of justice,
• vi) In determining the appropriate order, the court should have regard to all of the circumstances of the case, including, in particular:
  • a) When and why the solicitor/client relation ended
  • b) Who ended it;
  • c) The nature of the case;
  • d) The stage that the litigation had reached;
  • e) The conduct of the solicitor and the client respectively;
  • f) The balance of hardship which might result from the order that the court is asked to make.
  • g) The fact that the value of the lien is likely to be considerably reduced if the file is handed over.

The Decision

Strangely, there had not previously been a similar case where disclosure was being sought in a separate claim to that in which the solicitor had been instructed to act in. It was suggested that this may be because the files are usually sought at pre-action stage to inform a party before they decide whether to issue proceedings.

The court instead relied on the case of Woodworth v Conroy (1976) which involved an accountant exercising their lien.

The court felt that it was not appropriate to allow the Defendant to continue to assert the lien so as to modify disclosure obligations that would otherwise arise.

Some of the relevant factors were:

• a) The claim for professional negligence could only be understood by consideration of the documents – they were central to the issues before the court (being the Defendant’s conduct)
• b) The Defendant had counterclaimed for fees so the case cannot be properly tried without sight of the files

Final Words

Whilst it was accepted that a court could interfere with the obligations of disclosure in respect of files to which a lien is exercised, they would only do so in limited circumstances.

The value of a solicitor’s lien has been eroded over the years with the growing dominance of electronic files over paper files. A client is likely to have a copy of much of the documents created during the course of a case. It now seems a client may circumvent the lien if they initiate court proceedings for professional negligence, which is the growing trend in defending a solicitor’s claim to enforce unpaid fees. Although claimants should proceed cautiously in issuing a claim without prior disclosure of their files to avoid a strike out of a unmeritorious claim.

If you are considering bringing a claim for professional negligence, you should always act as quickly as possible and seek legal advice as to the merits of any claim and the potential limitation period. Contact our expert Dispute Resolution solicitors now on 0330 822 3451 or request a call back.