Solicitors trying to argue they did not waive their right to fees by taking additional security have been accused of ‘rewriting history’.

Lawyers representing the liquidators in Candey v Crumpler & Anor told the Supreme Court it could be inferred that the London firm had intended to bring its lien to an end through the creation of the new security.

They argued that a solicitor owed a fiduciary duty to their client to explain the extend of his interest, and the new agreement did not expressly preserve the lien.

David Holland QC, representing Crumpler, said it was ‘crystal clear’ the plan was to replace the existing fees agreement when entering the new arrangement.

‘If the solicitor did not make clear that he intended to retain the lien, the court is entitled to infer that he did not intend to retain it,’ added Holland.

Earlier in the hearing, Candey argued it was being penalised for protecting itself from the risk of a client who was unable or unwilling to pay their fees. The firm had represented Peak Hotels & Resorts Limited in litigation but was owed several hundreds of thousands of pounds in unpaid fees and so negotiated a fixed fee agreement and deed of charge.

When Peak collapsed, liquidators decided this was a floating charge rather than a fixed one and made it much more unlikely that Candey would be paid the estimated £4.7m it claims to be owed.

The liquidators told court today that Candey had already received £2.64m in fees for acting for Peak prior to the new arrangements, and then received a further £941,359.

They argued there was ‘nothing surprising or uncommercial’ about the Court of Appeal having found in favour of them, and they rejected the suggestion that such a result had a ‘chilling effect’ on access to justice.

It was submitted that Candey was attempting to establish that the lien was not waived but instead continued to exist alongside the new security, leaving two alternative rights between which the solicitor may choose.

Holland said: ‘Whether the new security has replaced the lien is not a matter which the solicitor may decide unilaterally.’ He added that the terms of the fixed fee arrangement indicated it was intended to replace the previous agreement, as the new security under the deed of charge covered the same property as the lien and was given a higher priority than the lien.

Judgment was reserved until later this year.