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Law firm “positively invited” client to end retainer

Bundles: Former solicitors ordered to hand them over

A law firm that gave a client seven days’ notice of its intention to end its retainer, but effectively forced the client to do it after a day, was the party responsible for the termination, the High Court has ruled.

It was important because the firm, Coyle White Devine (CWD), was exercising a lien over the client’s papers and was unwilling to deliver them to his new solicitors, Crofts, who needed them to advise on a possible appeal.

Mr Justice Nugee’s ruling in Walsh v Greystone Financial Services Ltd [2019] EWHC 2573 (Ch) [1] followed his substantive decision in July dismissing Vincent Walsh’s claims.

The trial finished in April, but in June CWD served Mr Walsh with a statutory demand over unpaid fees, including to counsel. Mr Walsh’s application to set it aside is being heard this month.

On 13 June, CWD sent him notice of termination of the retainer, giving seven days’ notice. The letter continued: “That said and as previously advised, we do not intend to carry out any further work on your matters pending termination. For completeness, I have enclosed a notice of change which I would invite you to complete, sign, and return by 4pm on 14 June 2019 notwithstanding the termination period…

“For the avoidance of doubt, should I not receive a notice of change by 4pm on 14 June 2019, I will be obliged to make a formal application to be removed from the court record as acting for you the costs of which will be sought from you.”

The following day, Crofts replied, enclosing a notice of change of representation, and asked CWD to hand over the papers in return for an undertaking to hold them until resolution of the costs. CWD refused.

Nugee J was asked to decide who had terminated the retainer, as this could affect the exercise of the court’s power to require the former solicitors to hand over the papers.

The judge rejected CWD’s submission that, although the letter of 13 June made it clear the contract would otherwise terminate on 20 June, it was technically Mr Walsh’s decision to bring it to an end on 14 June.

CWD had “positively invited” Mr Walsh to change solicitors on the 14th, backed up by the costs threat.

That meant it would be “a triumph of form over substance to regard the contract as, in effect, terminated by Mr Walsh”, Nugee J said.

“The analysis which I prefer to adopt is that it was Coyle White Devine who chose to bring the contract to an end.”

This was the case whether or not CWD was justified in doing so, an issue that was not before the court.

CWD nonetheless argued that there was very little left in the litigation and Mr Walsh did not need the papers anyway. Counsel still had the papers used at trial and there was no reason why he could not deal with the only outstanding matter, which was a possible application for permission to appeal.

Nugee J said: “Although it may well be that it would be possible for [Tony] Beswetherick to act in Mr Walsh’s interests in that way, it would leave both Mr Walsh and Crofts in a most peculiar position in instructing counsel who had access to documents but in circumstances where neither the client nor the solicitors had access to the same documents themselves.

“That seems to me such an unusual way of conducting litigation that I do not think that Mr Walsh and his new solicitor should be put into that position.

“Apart from anything else, as Ms Allen pointed out, it is always possible that if Mr Beswetherick’s advice is not to Mr Walsh’s liking, Mr Walsh and Crofts might wish to seek alternative advice.”

It has long been established, the judge added, that “it is not appropriate for solicitors simply to slavishly follow the advice of counsel but to bring to bear on the advice they give to their clients their own experience of litigation and their own assessment of the merits and demerits of any particular proposed course of action”.

Nugee J ordered CWD to hand over to Crofts the trial bundles and daily transcripts of the evidence, in return for a suitable undertaking. All other documents did not go to the question of a possible appeal.

“It would be wrong to make further inroads into Coyle White Devine’s lien beyond that needed for that purpose,” he said.