The Supreme Court is there to deal with the biggest legal questions of the day and so it might come as a surprise that it has now considered the solicitor’s equitable lien twice in four years. For claimant lawyers, however, this unexpected turn of events has been a good thing.
As Lord Briggs (pictured) explained in Gavin Edmondson Solicitors Ltd v Haven Insurance Company Ltd [2018] UKSC 21: ‘In its traditional form [the lien] is the means whereby equity provides a form of security for the recovery by solicitors of their agreed charges for the successful conduct of litigation, out of the fruits of that litigation. It is a judge-made remedy, motivated not by any fondness for solicitors as fellow lawyers or even as officers of the court, but rather because it promotes access to justice.
‘Specifically it enables solicitors to offer litigation services on credit to clients who, although they have a meritorious case, lack the financial resources to pay up front for its pursuit.’
It is called a solicitor’s lien because solicitors used to have a virtual monopoly on litigation in the higher courts. In Bott & Co Solicitors Ltd v Ryanair DAC [2022] UKSC 8, the Supreme Court said the question of whether it should be extended to non-solicitors now active in the courts was one for parliament to answer.
Gavin Edmondson established that the lien could arise where no formal proceedings, in this instance cases brought under the RTA protocol, were begun. It meant that the defendant insurance company, which settled personal injury claims directly with the law firm’s clients, had to pay the solicitors the costs they would have earned.
Bott & Co dealt with flight delay claims, an area of law the Cheshire firm pioneered in 2013 by creating an automated process to handle what are small claims worth a few hundred pounds. In 2016, Ryanair stopped dealing with the solicitors and instead paid compensation to their passenger clients directly. Around 30% of the clients who told Bott & Co that they had been paid directly (and not all did, it is assumed) did not then forward on the costs they owed the firm, generally £95.
The High Court and Court of Appeal held that uncontested flight-delay claims did not amount to litigation services and so the firm could not claim an equitable lien over the damages for its costs. But the Supreme Court, by a 3:2 majority, overturned this.
The Supreme Court said that no dispute arose in the vast majority of cases handled by Bott (actually this was not right – it has had to issue in 45% of 223,000 cases it has brought), and the question was whether there was an actual or reasonably anticipated dispute at the time the solicitors agreed to act.
The three judges in the majority – Lord Burrows, Lady Arden and Lord Briggs again – all gave their own judgments, but perhaps the key paragraph is from Burrows at [88]: ‘[T]he appropriate test for a solicitor’s equitable lien is whether a solicitor provides services (within the scope of the retainer with its client) in relation to the making of a client’s claim (with or without legal proceedings) which significantly contribute to the successful recovery of a fund by the client.’
The court emphasised that the ‘significant contribution’ threshold is a low one; in Gavin Edmondson, the solicitors had crossed it by doing little more than entering the client’s claim on the online portal.
The trio observed that solicitors could not know whether a claim would be disputed at the start and it would not be reasonable for the lien only to apply if it later was. As Burrows put it: ‘The solicitor needs to know in advance of providing particular services (or developing a business model) whether or not it will be entitled to an equitable lien if there is a successful outcome.’
The majority stressed the importance of access to justice – what was called the ‘animating principle’ of the lien. In the context of the number of non-court-based schemes emerging to resolve disputes, and the courts actively encouraging parties to find alternatives (given what Arden said was ‘an enormous pressure on court resources, human and physical’).
In another important passage, Briggs said: ‘[T]he disproportionate cost of having to engage solicitors (or other legal professionals) for the pursuit of small or moderate claims is, if anything, the biggest single impediment to access to civil justice in England and Wales, notwithstanding the sea change achieved by the introduction of the Woolf and then the Jackson reforms, now reflected in the Civil Procedure Rules and the growing use of fixed costs.
‘It follows that any methods by which solicitors can assist in reducing that disproportionality, so as to make the pursuit of small and moderate claims a realistic choice for ordinary people, are in principle likely to serve the cause of access to justice.’
Bott & Co’s scheme, he said, ‘overcame the impediments (whatever they were) which had previously inclined them simply not to claim at all’.
The Supreme Court ruling gives the green light for solicitors to adopt automation and low-cost methods to address other access to justice problems. It has also given the lien a clear footing. It can be claimed when there is either collusion to cheat the solicitor or the defendant has been given notice of the solicitor’s interest in the damages. It seems sensible for every claim, of any kind, to provide such notice in the future.
Laura Rees is a council member at the Association of Costs Lawyers and a costs lawyer for Hill Dickinson
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