21 February 2012

High Court upholds legitimacy of oral retainer between solicitor and client

It is not essential that the retainer between solicitor and client is in writing, the High Court has ruled.

London firm Fladgate successfully sued client Lee Harrison for £63,332 in unpaid fees for work done in a corporate restructuring.

One of Mr Harrison’s arguments against his liability for the money was that he never signed or agreed the letter of engagement sent to him, and that there was no evidence to support the finding that a contract of retainer had come into existence orally, nor that it could be implied by conduct.

Mrs Justice Lang said: “In my judgment, the giving of instructions by a client to a solicitor constitutes the solicitor’s retainer by that client. It is not essential that the retainer is in writing. It may be oral. It may be implied by the conduct of the parties in the particular case…

“The giving of a retainer is equivalent to the making of a contract for the solicitor’s employment, and creates the solicitor’s right to be paid. In determining whether or not a retainer has come into existence, the general principles of contract law apply.”

On the evidence, the judge found that a retainer was agreed orally, and was implied by Mr Harrison’s conduct in employing the firm to carry out the work for him.

The retainer was governed by the Solicitors Code of Conduct 2007, under which the name and status of the person dealing with the matter, and the person responsible for overall supervision, as well as information about the cost and complaints procedures, all had to be in writing.

But the code guidance said that “it is not envisaged or intended that a breach… should invariably render a retainer unenforceable”.

Under the new Code of Conduct, only complaints procedures and notification of the Legal Ombudsman have to be in writing, although putting in writing the names of the conducting and supervising lawyers is an indicative behaviour. On costs, indicative behaviour 1.19 suggests “providing the information in a clear and accessible form which is appropriate to the needs and circumstances of the client”.

 

Tags: retainer