The Gazette 1996

Transferring files between solicitors

documents until he is paid. This right must be fully recognised.

by Owen Binchy and Niall Casey*

in a position financially to transfer from the first solicitor, so that the best interests of the client are not prejudiced. In other jurisdictions where comprehensive legal aid schemes are in place, the State is funding the fees of both solicitors who thereby have security for their fees. When a file is transferred to a new solicitor, the only issue in respect of fees is the transfer of the Legal Aid Certificate. THE LEGAL POSITION The relationship of a client and a solicitor may, prima facie , be terminated at will. Merely calling an authority to act irrevocable does not make it so. The relationship of a client and a solicitor is the relationship of a principal and an agent and its termination is governed by law. This general principle governs most situations where a client seeks to determine a retainer. Where the first solicitor has undertaken a personal liability on behalf of the client, for instance, if a solicitor has given an undertaking, the client cannot determine the retainer without the first solicitor's consent. The law provides that in circumstances where an agent has undertaken a personal liability on behalf of a principal, the agent's authority is irrevocable. However, the agent/solicitor may decide to consent to the determination of his retainer, subject to a formal release of the undertaking by the recipient of the undertaking. In practice, before giving an undertaking, most solicitors seek a specific written irrevocable authority from a client for the giving of the undertaking itself. This authority is given for the purposes of securing a benefit to the client. There is a further general principle which confirms that such authorities are to be deemed irrevocable.

The Professional Guidance Committee of the Law Society is asked to consider disputes under many headings. However, the volume of disputes relating to the transfer of files between solicitors equals, if not.exceeds, the volume of all other disputes taken together. The Registrar's Committee which is one of the regulatory committees of the Society also receives a similar volume of complaints in respect of this issue directly from clients. It is hoped that the joint publication by both committees of this review of the law and the issues of conduct which arise when a file is transferred, and a statement of good practice, will lessen these disputes and problems considerably and ensure that the interests of the client, the first solicitor and the second solicitor are fairly balanced. This note reflects current policy. The guide to professional conduct of solicitors in Ireland was published in 1988. At clause 1.22, it was recommended that on receipt of a proper authority, and of an undertaking from the second solicitor to discharge within a reasonable time properly drawn costs and outlays, the first solicitor should hand over the files, papers and documents of the client to the second solicitor. While most solicitors tried to comply with this recommendation, its operation was found in certain cases not to be fair to the interests of the first solicitor. That solicitor has a right to be paid immediately for the work he has done. As with any other business, a solicitor in a firm decides the terms on which he will do business. Many considerations, not least the matter of cash flow, may dictate that the solicitor seeks immediate payment for work done.

Who funds legal services?

When a client instructs a solicitor, he is entering into a contract for legal services in return for payment. As with all contracts for services, the client is liable for the fees. As soon as a solicitor starts work on any matter, fees become due. The solicitor then has a choice as to whether he funds the action in full - that is, whether he allows a credit until the conclusion of the case, or not. If he does not wish to fund the action, he will seek funds in advance. In the latter case, the client may provide the funds from his own resources or may ask a bank or other lender to fund the matter. Alternatively, the solicitor may agree to fund the matter on an interim basis, furnishing interim bills from time to time as the matter progresses. Unless he is agreeable to do so, there is no reason why the first solicitor should continue to fund a case after the client has left that solicitor. When a client leaves a solicitor, he loses prosecution of the case and the control which would enable him to progress the matter. The second solicitor is taking the benefit of his colleague's work. When a file transfers to a second solicitor, he in turn must decide who will fund the matter. He may decide to fund the matter fully himself by paying the costs and outlay of the first solicitor and also by awaiting payment of his own fees and outlays until the conclusion of the matter. If he does not wish to fund the matter, the client will be required to do so, and, again, may seek funds from a bank or other lender. If a solicitor is approached by a client who wishes to transfer his business from another solicitor, the solicitor approached should carefully explain the issue of the funding of the matter to the client and explore whether the client is

The solicitor has a right at common law to exercise a lien on files and other

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