High Court: Letter asserting solicitor’s lien was not defamatory

Lexlaw: Letter contained statements of fact

The High Court has thrown out a defamation claim over a letter sent by one law firm to another asserting a solicitor’s lien over £100,000 of any damages awarded to its former clients.

His Honour Judge Lewis, sitting as a deputy High Court judge, rejected the argument of Arran Coghlan and Claire Burgoyne that it implied they would try and cheat City firm Lexlaw out of the fees they owed.

“It said nothing about the claimants’ character and would not have lowered or tended to lower the claimants in the estimation of right-thinking people generally,” he said.

In 2018, Mr Coghlan and Ms Burgoyne retained Lexlaw to act on a professional negligence claim against their former legal advisers. The seven defendants were represented by BLM Law.

In March 2020, the claimants terminated the retainer, before the proceedings had concluded.

Two months later, Lexlaw wrote to BLM to give formal notice of its “solicitor’s equitable lien in the fruits of the litigation”. It said that, under the conditional fee agreement with the claimants, the lien was for fees of £93,260, plus interest and late payment fees.

A year later, the claimants sued Lexlaw for defamation, breach of fiduciary duty, misuse of confidential information and breaches of data protection rights, with damages put at £100,000.

HHJ Lewis was tasked with a preliminary hearing on meaning for the purposes of the defamation claim.

The claimants submitted that the natural and ordinary meaning of the letter was that “BLM Law and their clients need to be notified of this unpaid debt and equitable lien because there is a serious danger that Mr Coghlan and Ms Burgoyne will deliberately and wrongly knowingly cheat Lexlaw out of these monies and will not have the financial means to pay”.

They argued that the letter went “much further than asserting a lien”, indicating to the reader that there was no realistic possibility of the fees being discharged by the claimants in the ordinary way.

HHJ Lewis recounted: “It is said that the ordinary reader would inevitably consider what had prompted the defendant to write in such terms and would draw the ‘obvious’ and ‘only realistic’ inference that the claimants have not paid what is said to be owed, that there are reasonable grounds to believe that they will not do so, and that the claimants are very likely to act dishonestly to avoid payment.”

Describing the claimants’ meanings as “strained and unnatural”, Lexlaw said the letter contained statements of facts and opinion, and that it was simply a legal notice sent from one law firm to another, with no suggestion that payment was overdue.

HHJ Lewis agreed with Lexlaw. “This is a letter sent between two sets of litigation solicitors. It is written in straightforward terms, asserting a lien over any damages that might be due to the claimants at the end of the case,” he said.

“The claimants say that the reader would consider what had prompted the defendant to write in such terms. I do not agree. There would have been no need for them to do so because the letter explains very clearly that the defendant was writing to protect its position and it explains the legal basis for doing so.

“Whilst there is a reference in the letter header to ‘unpaid legal fees’, it is apparent from reading the letter as a whole that any costs had not yet fallen due. The letter did not cast aspersions in respect of the claimants’ conduct, and only a reader avid for scandal would think that it did.”

The letter contained statements of fact and was not defamatory, he concluded, dismissing the claim in respect of defamation.

The proceedings continue in respect of the other causes of action.

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