Iqbal Mohammed considers the rare grant of an interim injunction in support of a solicitor’s equitable lien over the proceeds of a property a former client was likely to recover in litigation.
Facts
A national firm of solicitors acted for a wife seeking a share of the matrimonial home worth about £2m. These were hotly contested financial relief proceedings in the family jurisdiction running for about 4 years. The firm acted for the wife in obtaining a non-molestation order against the husband, litigating her interest in the property and attending an FDR. The firm also made offers on behalf of the wife which included provision for their costs.
The client entered into two retainers, one which provided for any credit to be paid on judgment, settlement or on their dis-instruction.
The firm extended credit for its fees, which at the point of the FDR in mid-2025, came to about £260k. A written offer was also made to settle which included a similar figure for the client’s costs.
A final hearing of the client’s claim was listed for October 2025 and the parties had started to market the family home for sale.
Two weeks after the written offer, the client abruptly dispensed with the firm, deciding to act in person. The solicitors had no notice of this and in subsequent WhatsApp messages, the client said she had nothing to say to the firm.
The firm was dis-instructed on Friday and the following Thursday were heard on a without-notice application for an urgent injunction to preserve the wife’s share of the proceeds of sale in the home on the basis of the solicitor’s equitable lien over them. His Honour Judge Worster granted the injunction, ordering that £161k be preserved. On return, His Honour Judge Charman continued the injunction.
Law
The firm relied on the existence of an equitable lien over the fruits of litigation, in this case, the wife’s share of the matrimonial home. This lien was described by Lord Briggs in Gavin Edmondson Solicitors Ltd v Haven Insurance Co Ltd [2018] UKSC 21 as:
In its traditional form it is the means whereby equity provides a form of security for the recovery by solicitors of their agreed charges for the successful conduct of litigation, out of the fruits of that litigation…
In that decision, the court surveyed the law and started with Welsh v Hole (1779) 1 Dougl KB 238, quoting Lord Mansfield:
An attorney has a lien on the money recovered by his client, for his bill of costs; if the money come to his hands, he may retain to the amount of his bill. He may stop it in transit if he can lay hold of it. If he apply to the Court, they will prevent its being paid over till his demand is satisfied. I am inclined to go still farther, and to hold that, if the attorney give notice to the defendant not to pay till his bill should be discharged, a payment by the defendant after such notice would be in his own wrong, and like paying a debt which has been assigned, after notice. But I think we cannot go beyond those limits.
Lord Briggs noted (at para 34) that:
A similar analysis is provided by Lord Hanworth MR in Mason v Mason and Cottrell [1933] P 199, at 214. The use of the concepts security and charge imply that there must be identified some fund over which it can operate. This was described as a necessary condition of equitable interference under this principle in In re Fuld dec’d (No 4) [1968] P 727, per Scarman J at 736… Provided that the debt has arisen in part from the activities of the solicitor there is no reason in principle (and none has been suggested) why formal proceedings must first have been issued, all the more so in modern times when parties and their solicitors are encouraged as a matter of policy to attempt to resolve disputes by suitable forms of ADR, and when pre-action protocols of widely differing kinds have been developed precisely for that purpose.
Decision
The court granted the order being satisfied that the wife’s share, likely to be crystalised soon, was a “fruit of litigation” in pursuance of which the firm extended credit to the client. The client had acknowledged the amount of credit, despite now disputing it, in her FDR position statement and offers to settle. The firm sought the fees incurred for both the non-molestation order and financial remedy claim. However, the judge was not persuaded that the fees incurred for the non-molestation order were the same in principle as the fees incurred for the financial relief claim; the former not having some “fund,” over which equity could operate. Likewise, the fruits of that litigation were not property but obtaining a non-molestation order. As such, the judge declined to make an order with respect to all the fees owed but only those owed on the financial relief claim.
Comment
Firstly, interim injunctions brought to protect a solicitor’s equitable lien are exceedingly rare. There is no authority on how such an application could be determined; the firm had to rely on the general principles of American Cyanamid. However, the firm argued that it sought a proprietary injunction to preserve that share of the proceeds of sale in which it had an equitable interest under its lien. This argument was accepted by both judges.
Secondly, the firm’s retainer or contractual wording mattered little as equitable principles were sufficient to persuade the judge to make the order. However, the absence of contractual provisions, a legal charge or other security meant that the firm was unable to preserve a sum representing its credit on the non-molestation order. This is important where firms are considering extending credit to pursue property or funds; if ancillary matters require litigation, then thought should be given to additional security.
Thirdly, despite the long-running litigation, the firm argued that their client was attempting to collude with her husband to avoid the firm’s fees being paid (by either party), which concerned the court given the abrupt dismissal of the firm. This was merely argued and not tried, however, it shows that when extending credit, thought should be given to the potential of the solicitor-client relationship breaking down.
Fourthly, instead of issuing a claim or preparing a final statute bill, the firm acted quickly to preserve the fund from which its fees would be met. It is likely that to do otherwise would substantially increase the risk of going unpaid. This case was brought in the Business and Property Courts in Birmingham (KBD) and heard within 3 days of issue on an urgent basis, which is an impressive testament to its responsiveness of the BPC in Birmingham.
Finally, solicitors should bear in mind the rather unusual protection afforded to solicitors who offer credit to litigate the recovery of property or other funds. This may be something that comes to their aid. The reasons for this unusual protection were given by Lord Briggs:
It is a judge-made remedy, motivated not by any fondness for solicitors as fellow lawyers or even as officers of the court, but rather because it promotes access to justice. Specifically, it enables solicitors to offer litigation services on credit to clients who, although they have a meritorious case, lack the financial resources to pay up front for its pursuit.
Whilst every effort has been taken to ensure that the law in this article is correct, it is intended to give a general overview of the law for educational and/or informational purposes. It is not intended to be a substitute for specific legal advice and should not be relied upon for this purpose.
This article represents the opinion of the author and does not necessarily reflect the view of any other member of St Philips Chambers.
