LIENS

Question	Answer
CHAPTER 3 - LIENS	The common law right of an attorney to retain or seek to retain personal property of a client pending payment of outstanding fees for professional services rendered.
How does a lien operate?	Both common law and statutory liens are exercisable over certain prescribed property belonging to the client and operate as security for costs due and owing to the attorney (Barratt v. Gough-Thomas).
Scope of Liens in General	1) Both common law and statutory liens attach only to an attorney's taxable costs owed to the attorney for done work in his capacity as such and not to general debts. It is only applicable to taxable costs which are due and not to those which are to be incurred in the future. 2) A lien would not apply to any costs which have been incurred by an attorney who was not qualified to act in his professional capacity at that time.
For the scope of liens, one must have regard to the case of:-	Re Taylor, Stileman & Underwood
Re Taylor, Stileman & Underwood concerned the following facts:-	The client applied for an order that her former attorneys deliver up documents to her upon her payment of a sum of money with regards to her bill of costs. The attorneys claimed a lien worth a considerably larger sum which they said was due from the client with regards to cash advances and other items besides taxable costs. HELD: An attorney's lien only extended to items properly included in a bill of costs; i.e. taxable costs, charges and expenses which may be moderated by a master but NOT to ordinary advances or loans.
Are there different types of lien?	Yes. Liens may be either common law or statutory in nature. The common law liens are the:- 1) General retaining Lien; and 2) Particular Lien. The statutory lien is also known as a Charging Order (applicable to Barbados and some EC territories).
(1) GENERAL RETAINING LIEN	DEFINITION: Gives an attorney the right to retain any deed. paper or personal chattel which, with the client's knowledge and sanction, has come into the attorney's possession in the course of his employment and in his capacity as an attorney.
Can an item which has intrinsic value be retained by an attorney by way of a general retaining lien?	Yes. See the case of Hughes v. Hughes
Hughes v. Hughes	A petitioner in a divorce discharged the firm which had been acting on his behalf and retained another attorney who gave an undertaking to the discharged firm. The petitioner soon discharged this attorney and instructed new solicitors. He then attempted to obtain an order of the court requiring that the second attorney be relieved of his undertaking and deliver up the petitioner's papers to his current attorneys. The court held that it did not have the jurisdiction to do this. Furthermore, it was held that a lien could operate whether the item retained has intrinsic value or not. Examples were given of items which could be retained: "deeds, papers or other articles which are the property of the client and have come into the possession of the solicitor in the course of his professional employment, as, for example, a bill of exchange, letters patent, application for shares, a debenture trust deed, a policy of insurance and letters of administration."
Can a general retaining lien be enforced by way of a suit or is the right to such a lien passive?	The right to a general retaining lien is merely possessory and passive. See the case of Barratt v. Gough-Thomas
Barratt v. Gough-Thomas	"The nature of a solicitor's general retaining lien has more than once been authoritatively stated. It is a right at common law depending, it has been said, on implied agreement. It has not the character of an incumbrance or equitable charge. It is merely passive and possessory, that is to say, the solicitor has no right of actively enforcing his demand. It confers on him merely the right to withhold possession of the documents or other personal property of his client or former client..."
In other words....	An attorney cannot sue to acquire or to enforce a lien.
Further to the case of Barratt v. Gough-Thomas, it was held that:-	A condition precedent to an attorney claiming a lien over his client's documents is that his possession of them must be referable. at the date of demand, to the relationship of attorney and client between himself and the claimant.
QUALIFIED LIENS The position where an attorney discharges himself	Subject to exceptional circumstances, where an attorney discharges himself, even for good cause, (usually the failure of the client to keep him in funds), he acquires only a qualified lien over documents in his possession.
What is an attorney's obligations under a qualified lien?	Where a qualified lien is concerned, an attorney must hand over his client's papers to said client's new attorney against an undertaking by the successor attorney to preserve his lien on the papers for costs and to redeliver the papers to him at the end of the litigation.
Important cases with regards to Qualified Liens are:-	1) Gamlen Chemical v. Rochem 2) Bentley v. Gaisford
Robins v. Goldingham	Stipulated that it is a requirement that an attorney only acquire the right to a qualified lien once he discharges himself and must deliver his former client's documents to his new attorney against an undertaking so that the former attorney would not exert a lien to interfere with the course of justice.
Would a second attorney be in breach of his undertaking if he copied the documents for the benefit of the client?	Copying of every document sent to the new/second attorney on record, and the sending of the copies to the client is, in the absence of any agreement to the contrary, a breach of the undertaking.
Note the case of: Bentley v. Gaisford	Plaintiff attorneys were retained by a Chinese company who later terminated the retainer and instructed new attorneys. The company requested that its documents be forwarded to the new attorneys and the Plaintiff agreed to the request on the undertaking of the new attorneys to hold the documents pursuant to a retaining lien. A partner in the defendant firm, acting in good faith and pursuant to his duties towards his client, copied all the documents and forwarded these copies to the client. The Plaintiff thereafter sent a bill to the client and informed the defendant of same, reminding them of the lien. The Defendant forwarded the original documents to the Plaintiff but refused to send the copies, insisting that they were not bound by the restraining lien. The Plaintiff contended that this amounted to a breach of the undertaking.
What was the outcome of Bentley v. Gaisford?	HELD: The wholesale copying of the documents under the lien and their dispatch to the client was in breach of the undertaking because these actions effectively destroyed rather than maintained the security of the qualified lien.
But what must the undertaking itself consist of?	The successor attorney must undertake to:- a) Hold the papers without prejudice to the original attorney's lien with respect to the payment of the attorney's fees; b) Allow the original attorney access to the papers as may be necessary to sue for fees; and c) Return the papers intact or undefaced after the conclusion of the suit.
Exceptional Circumstances	The exceptional circumstances in which an attorney may be permitted to exercise his retaining lien (i.e. keep the client's property) includes cases where papers would be rendered useless/valueless after litigation and the client acknowledges his indebtedness to the attorney for an agreed amount.
What are the powers of the court in exceptional circumstances?	In exceptional circumstances the court MAY order the client to pay an amount reflecting outstanding fees and that the attorney release the documents to the client's new attorney. However, this is an equitable power of the court and is thus discretionary.
Important cases to note for exceptional circumstances are:-	1) Gamlen Chemical v. Rochem 2) A v. B 3) Ismail v. Richards Butler
1) Gamlen Chemical v. Rochem	Per Templeman LJ: "The court will not automatically make a mandatory order obliging a solicitor who discharges himself to hand over the papers to the new solicitor, for the remedy is equitable in character and an automatic order is inconsistent with the inherent jurisdiction of the court to grant or withhold an equitable remedy. In exceptional cases, therefore, the court may impose terms on the mandatory order where justice so requires."
2) A v. B	This is a case of shipowners refusing to pay certain costs incurred by their attorneys. The attorneys, as a result, refused to act for them while litigation was still pending and asserted a lien over the documents which they held on the shipowners' behalf. They also had the shipowners' vessel arrested. The shipowners then applied to the court for an order for delivery up of the documents for use in the impending litigation. HELD: As with Gamlen it was held that this power of the court was merely equitable/discretionary. The exercise of the discretion was dependent on certain factors (outlined on the following flashcard).
A v. B (Cont'd) Factors for the exercise of the court's discretion	Overriding Principle: The order of the court must be one which would best serve, not frustrate, the interests of justice. The court must weigh the principle that a litigant must not be deprived of material relevant to his case against the principle that litigation must be conducted with due regard to the interests of the attorney should not be left without payment for what is justly due to him. In this case, the attorney was deemed to have acted impeccably while the client had refused to pay fees without good reason.
3) Ismail v. Richards Butler	"Since the defendants had effectively brought their retainers to an end by requiring payment of their outstanding costs as a condition of continuing to act, the plaintiffs were entitled to an order that papers required for the conduct of pending litigation be delivered to their new solicitors. However, having regard to all the circumstances, including the nature of the case, the stage which the litigation had reached, the conduct of the parties, the fact that the value of the defendants' lien was likely to be very considerably diminished if the papers required for the pending litigation were handed over, and the interests of justice, the plaintiffs would not to be ordered to make any immediate payment to the defendants, but would be required to provide security in the sum of £450,000 for the defendants' claim by way of payment into court, bank guarantee or other acceptable means."
UNQUALIFIED LIENS The position where the client discharges the attorney	Where the client discharges the attorney with or without good cause, the lien endures and the court has no right to call for the client's documents to be delivered up to his new attorney by the one who has been discharged. The lien is unqualified even where the papers in question concern pending litigation.
But is the unqualified lien problematic?	Unqualified liens may be problematic and the court acknowledges that they may make things very difficult for a client and his new attorney who may need the documents to protect the client's interest in the continuing action while at the same time keeping in mind that the former attorney's bill may be disputed and taxation can be a lengthy process.
Have recommendations been made to reduce the problems attached to an unqualified lien?	The Law Society in England once suggested that:- "...the solicitor's papers should be released to the successor solicitor, subject to a satisfactory undertaking as to the outstanding costs being given in lieu of the lien. There is however no duty on the original solicitor to accept an undertaking." In other words, the attorney still would be under no obligation to accept an undertaking where an unqualified lien is concerned. It is a matter for his own determination.
Exceptions to the Unqualified Lien	Note the cases of:- 1) Clifford v. Turrill 2) Hughes v. Hughes
1) Clifford v. Turrill	An attorney for a Plaintiff in a cause, obtained an order which he passed; he was then discharged by the Plaintiff and a new attorney appointed in his stead. The discharged attorney refused to produce the order to be entered, on the ground that he had a lien for his costs in the same suit. It was held that a lien cannot be allowed to intercept the completion of an order which has been passed. Moreover, where an attorney acts in a representative capacity the court may order him to hand over the documents subject to the lien.
2) Hughes v. Hughes	An attorney's right to possession of the client's documents and other personal property ceases, i.e. he cannot refuse to deliver them up where a third party claims an interest in them. N.B. - In this case, the court rejected the argument of the client that there was an existing or potential third party interest which would override the attorney's right to his lien.
DISCHARGE OF A LIEN	A lien may be discharged in the following ways:- 1) Payment by client of the sum due; 2) By attorney willingly and knowingly parting with possession of items/papers (except to successor attorney) on an undertaking from the new attorney that the papers would be held to the original attorney's account/order; and 3) By waiver: where attorney acts in a manner inconsistent with the retention of the lien; e.g. by taking other security for the costs without expressly reserving the right of lien.
Waiver of a Lien Case	Re Taylor, Stileman & Underwood
Re Taylor, Stileman & Underwood concerned the following facts:-	A client applied for an order that her former attorneys deliver up her documents on her payment of a certain sum of money. The attorneys claimed a larger sum than what was claimed to be due by the client. Without expressly reserving their lien, the attorney had taken from the client as security for the amount owing a charge on a policy of life assurance and a promissory note from the client and her husband. HELD: whether or not a lien was waived depended on the intention expressed or inferred, on the position of the parties, and on the circumstances of the case. In this case, in the absence of contrary evidence, the attorneys were held as having waived their right to the lien by accepting security without expressly reserving the lien.
2) PARTICULAR LIEN	With respect to court proceedings, where there is a possibility of a client depriving an attorney of his costs, the attorney is entitled to claim as security for the payment of his costs, a lien on property (except real property) recovered or preserved through his professional exertions.
Under a particular lien, an attorney has the right to retain:-	The fruits of any judgment obtained by the attorney on behalf of his client (Re Meter Cabs Ltd.); and
Re Meter Cabs Ltd.	An attorney was employed in an arbitration by a company for which he recovered certain monies. While the arbitration was in progress, the company went into liquidation, and the committee of inspection failed to appoint the attorney was solicitor for the liquidators. HELD: though the attorney had not been appointed as solicitor for the liquidators, he had a common law lien on the fund recovered by his exertions in the arbitration, and that right extended to the cost of establishing his claim.
An attorney's right to a particular lien may extend to:-	The costs of proceedings taken by the attorney in order to establish the existence of his retainer (Re Hill, a Solicitor).
A particular lien also applies to the following property:-	a) All personal property; b) Money (including costs) payable under a judgment or award; c) Proceeds of an execution in the sheriff or Marshal's hands; d) Money paid into court; and e) Money payable under a compromise.
How does a particular lien differ from a general retaining lien?	A particular lien differs from a general retaining lien in that it only become effective once the attorney takes steps to enforce it. The attorney must make an application to the court asking same to charge the client's property to the attorney's favour. Where the fund or property or fruits of the judgment are not in the attorney's hands, then the lien is merely a claim to the equitable interference of the court, to have the judgment held as security for the debt.
The term "lien" therefore, is a misnomer.	Note the case of:- James Bibby v. Woods and Howard
James Bibby v. Woods and Howard	a) A particular lien is not a right of retention but extends to property not in the possession of the attorney. b) A particular lien only extends to costs, charges and expenses incurred in recovering, preserving the property or obtaining the judgment. c) A particular lien includes a right to the intervention of the court for its protection. Where there is an arrangement between the Claimant and Defendant in an action to deprive an attorney of his lien the court will step in to enforce the lien.
An attorney would not be deprived of his lien for costs incurred:-	a) where the court orders that the other side pay the attorney's client personally; b) where there is collusion or connivance of the client with the other party to proceedings for the purpose of defeating the attorney's lien; or c) in the case of the bankruptcy of the client.
Set Off	Where a judgment is obtained for the client who owes a debt to the other party to the litigation, the court will not allow the judgment to be set off against the debt due to the other party by the client to the detriment of an attorney who has a lien on the judgment for costs from the client (Mercer v. Graves and Pringle v. Gloag).
Pringle v. Gloag	" It would be a monstrous extension of the rights of a solicitor against the parties to an action to say that he should have the right to make the party who may have been successful in the ultimate results pay the losing party's costs."
However, the general rule is:-	In the absence of fraud or collusion between the parties, the court will allow a set-off, notwithstanding a client's attorney's lien.

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