Solicitors cannot use lien to block disclosure of file in negligence claim

File: Claimant needed it to progress case

A law firm being sued by for negligence cannot use its lien over a file for unpaid fees to overcome its obligation to disclose the file to its former client, the High Court has ruled.

His Honour Judge Pearce said allowing the claimant’s solicitors to see the file, provided they undertook not to share it with their client, was insufficient.

West Country law firm John Hodge Solicitors (JHS) acted for David Ellis in a personal injury claim. The defendant made several offers, the highest being for £200,000. Mr Ellis rejected them, seeking more than £500,000, but at trial he was awarded just £11,813.

Sitting in Manchester, HHJ Pearce observed: “It is clear that the decision not to accept the offer of £200,000 (or one of the lesser offers made) had a disastrous consequence for the claimant.”

He then sued the law firm, claiming it failed to advise him properly on the effect of the offers and, in particular, the risk (which came to pass) that the defendant’s expert evidence would be preferred. JHS denies this.

In its defence, the firm indicated that it was “not able” to provide initial disclosure of the file because it was exercising a lien over it on the grounds of unpaid fees; it is suing for these by way of counterclaim.

Before the court, JHS offered to disclose the file to Mr Ellis’s solicitors if they provided a so-called Robins undertaking that it would not be further disclosed to Mr Ellis and then returned after they had considered it. It said this would preserve some of the value of the lien.

It was common ground that the file was disclosable but the court was asked to decide whether the lien could restrict this. There appeared to be no direct authority.

HHJ Peace proceeded on the basis that the court has the power to modify disclosure duties that would otherwise arise where the party from whom disclosure is sought has a valid lien over the file for unpaid fees.

But he declined to exercise it here. “On the face of it, the claimant has an arguable case that can only be understood by consideration of the documents.

“If the defendant is correct, consideration of those documents will demonstrate the correctness in whole or in part of its defence. It may well be that the decision to issue without sight of the file will prove costly to the claimant.

“However, the documents in the file are clearly central to the issues before the court. The claimant cannot fairly conduct this claim without knowing the contents of the file.”

HHJ Pearce said the Robins undertaking was not “realistic”. He explained: “The context of discussions recorded in file notes is likely to be important in judging the evidential significance of the file notes to the claim.

“The claimant cannot properly deal with the issues without knowing exactly what the documents say – and if he is told the full content of the documents, the lien would lose its value just as much as if he saw the documents themselves.”

Further, JHS’s counterclaim put the contents of the file “directly in issue”. This made it “difficult to see how the case could properly be tried without the file being disclosed”.

Though the Robins undertaking might be “less problematic” in relation to the counterclaim, because the fees issue was likely to be a matter largely of legal analysis, there was still a risk of prejudice to Mr Ellis.

HHJ Pearce concluded that JHS was obliged to disclose the file and that Mr Ellis’s solicitors should not be required to give an undertaking “restricting the use to which the file is put beyond the restrictions that are contained in the CPR in any event”.

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