Direct link Share on

The Supreme Court has today handed down an important judgment defining in a modern context the scope of the solicitor’s equitable lien.

The solicitor’s equitable lien (as distinct from the common law possessory lien) entitles a solicitor to an equitable interest in funds recovered on behalf of a client in dispute resolution contexts in order to protect the solicitor’s entitlement to fees. The equitable lien was formerly confined to situations in which a fund was recovered in the context of litigation and arbitration. The Supreme Court has now confirmed that an equitable lien may arise in a wider range of dispute resolution situations, without the need for proceedings to have been issued.

The majority (Lord Burrows, Lady Arden and Lord Briggs, all of whom gave different judgments) considered that a lien should arise where the solicitor is providing services in relation to the making of a client’s claim which significantly contribute to the successful recovery of a fund by the client. On the facts before it, they considered that the appellant solicitors (who specialised in processing flight delay compensation claims) were entitled to a lien. Although the work they did was not difficult and rarely gave rise to any dispute, it nevertheless involved asserting a claim on behalf of a client and had made a sufficient contribution to access to justice to attract the protection of the lien.

The minority (Lord Leggatt and Lady Rose) considered that, for a lien to arise, there had to be a dispute or a reasonably anticipated dispute. That was not true of the work conducted by the appellant solicitors, where there was rarely if ever any dispute. In the minority’s view, recognising a lien in such circumstances could not be said to contribute to access to justice. It further considered that the majority’s test blurred the distinction between transactional work (where a lien should not be recognised) and dispute resolution work (where it should be recognised).

The judgment is available here.

Brian Kennelly QC and Tom Coates acted for Ryanair DAC.

+44 (0)207 5831770