- Litigation Futures - https://www.litigationfutures.com -

Supreme Court to review equitable lien ruling

Supreme Court: Permission granted

The Supreme Court is to review a controversial ruling that a law firm handling uncontested flight delay claims was not conducting litigation and so did not have an equitable lien over the compensation.

The Court of Appeal’s ruling in Bott & Co Solicitors v Ryanair [1] was criticised for not giving solicitors credit for being more business-like and efficient.

The case concerned the airline dealing directly with the law firm’s clients, including paying them compensation.

The court said the firm was not conducting litigation when the claims were not contested, and so did not have an equitable lien over the compensation. The court said 30% of clients did not pass on the fees due to Bott.

The Supreme Court has granted permission to appeal. It will consider what the limits are to the principle (as espoused in Gavin Edmondson Solicitors Ltd v Haven Insurance Co Ltd [2018] UKSC 21) under which a solicitor can ask the court to grant an equitable lien in order to protect his entitlement to fees as against his client.

Speaking after the appeal court decision, Bott & Co senior partner David Bott told Litigation Futures that he was disappointed by the decision, as he and counsel felt the firm’s situation fell squarely within the parameters of the Edmonson ruling.

He had also hoped the court would recognise “the way the law was going” in terms of firms becoming more efficient using technology to process matters and said it had taken a lot of investment for claims to be handled in a “mechanical and formulaic” way.

“If I’d had 100 10-year-qualified solicitors with pens and paper instead, it would not have been a problem,” he observed.

Mr Bott added that, with 54% of its flight delay claims now being litigated, “this may well be low value [work], but it is not necessarily low complexity or low in argument”.

He stressed that the firm’s business model was not under threat. “It will be a nudge on the tiller,” he said, and the firm would amend its processes to make clearer to clients what is expected of them when they receive their compensation.

Well-known commentator Kerry Underwood, senior partner of Underwoods Solicitors, said the senior judiciary [2] needed “to think through rather more carefully the whole issue of access to justice and litigation, and how it may be delivered”.

Mr Underwood said: “At one level, lawyers are being encouraged to use portals and follow protocols and do everything to avoid litigation, and yet Bott & Co appears to be being punished for using such a scheme, and for making significant profits from it.

“So, at one level, we are consistently urged to be efficient and be a business, with the provision of legal services opened up to every Tom Dick and Harry, but when a firm does exactly that, they are punished by the courts by being refused a lien.

“I can see no logical difference between the pre-action road traffic portal, where 99% of cases are settled, and the scheme operated by Bott & Co. This decision should be overturned by the Supreme Court.”