Solicitors are not under a general duty to check the credit status of parties in a commercial transaction unless instructed to, the High Court has ruled. Who to trust in a business situation is “a commercial decision for the client to take and not the solicitor”.
Law firms’ terms of business need to clearly provide them with adequate rights to stop work for a client who refuses to pay, solicitors have been warned following an important Court of Appeal ruling yesterday.
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.
Solicitors who have a long-standing relationship with a client and receive many instructions are not under an implied general retainer to keep under review all previous advice and drafting, the High Court has ruled.
A solicitor has good reason to terminate a retainer if a client insists on putting forward a case and instructing counsel to advance contentions that they do not consider properly arguable, the Court of Appeal has ruled.