Law firm has no lien for costs of legally aided work

Fees: Equity could not apply lien to legal aid case

A law firm has no lien on the damages awarded to a former client to cover the costs of legal aid work, the High Court has ruled.

However, in the case of privately funded work, an equitable remedy based on a solicitor’s lien could be available and it would be wrong to strike out that part of the firm’s claim for costs.

His Honour Judge Paul Matthews, sitting as a High Court judge, was ruling in a family dispute where a legally aided father, Kirpal Singh Sandhu, successfully sued one of his sons, Bill, to establish that he had a beneficial interest in a property in West London.

Bill appealed but the father died. As his executor, the other son, Gus, successfully defended the appeal on a privately funded basis, before settling the case with Bill without reference to either of their solicitors.

West London Law Limited, which acted for Kirpal and Gus, claimed around £227,000 in costs from both Gus and Bill.

HHJ Matthews rejected an argument by counsel for the law firm that equity could apply the principle of a solicitor’s lien and intervene in legal aid cases.

He said there was no exception to the rule that there could be no lien because the legally aided client had no personal liability for the costs.

“In my judgment, the claim, insofar as it is a claim in respect of the costs of the legally aided work, must fail because there is no prospect of the solicitor’s lien remedy being available.

“However, in relation to the privately funded work, in principle, it could be available.”

HHJ Matthews said the question was whether the law firm’s case was “sufficiently pleaded” to get over the hurdles set out in CPR 3.4(2)(a) and 3.4(2)(b) on strike-outs.

The judge said the costs claimed by West London Law stood at £227,000, taking into account a payment on account from Gus of £21,000. Bill had “paid nothing”, but the property involved had been sold, leaving “perhaps as much as £50,000” if all outstanding liabilities were paid.

The law firm issued a claim for its fees, alleging a “conspiracy to cheat the claimant out of its fees” and various other allegations. Bill applied to strike it out in August 2018.

Deputy Master Lloyd ruled in October 2018 that he would strike out the claim unless the law firm served amended particulars of claim.

The deputy master agreed with counsel for Bill that the particulars missed out “fundamental building blocks”, including the solicitor’s lien.

HHJ Matthews ruled that, as regards the privately funded work, although the particulars of claim could have been “clearer and perhaps fuller”, the security over which the lien was claimed was “sufficiently identified”.

He added: “It does not have to be described in legal terms as a lien or an equitable charge or anything else. It is sufficient if it is described so that it could be identified as the relevant fund.”

He dismissed the law firm’s appeal so far as it related to the legally aided work but allowed it so far as it related to the privately funded work.

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