Gavin Edmondson Solicitors v Haven Insurance Company
 EWCA Civ 1230
Once upon a time, Toad’s motorcar shunted Mole’s car. Mole suffered whiplash to his tail and he went to see a solicitor to see what it was worth. (Actually, what is more likely, Moley went home, took a few neurofen and went to bed early. It was only when he was subsequently hounded and haunted by claims farmers that he was persuaded to go and see a solicitor, in the hope everyone would leave him alone).
Minor personal injury – PI – claims are now run through a clever website set up by insurance companies. It is buttressed by a special protocol for traffic accidents. You don’t have to use it, but if you don’t, then as a lawyer you might be clobbered when it comes to costs. It essentially makes communications between the parties easier.
Mole’s solicitor, Badger, fills in a special 17 page form and lodges it on the portal. It details Mole’s hurty tail and crumpled whiskers. (Didn’t I mention the crumpled whiskers? Badger had to point them out to the Mole).
This is stage 1 of the process, and Badger gets £400. There are three stages, and solicitors get fixed fees for each of them, plus a success fee plus expenses. Mole doesn’t have to pay anything because this is a no win, no fee deal. It’s not easy to get legal aid now, and certainly not for a crimped tail and ruffled whiskers.
Mole is then rung up by the Weasels. They are the insurance company who insure Toad. They offer Mole a couple of thousand for his trouble, and Mole accepts their kind suggestion. He then tells Badger he doesn’t need his help anymore, but thanks anyway.
So everyone is happy, except for poor old Badger. Who is going to pay his fees now the insurer and his client have done a deal? Surely, though, Badger in his carefully drawn retainer (contract) with the Mole must have provided for sneaky-beaky behaviour by punters? Badger????
Ooops!!! (weeping emoji).
This is the sad story of Gavin Edmondson “specialist and diverse legal services from a dynamic and progressive firm” based in Cheshire. What should they do next? Especially as the Weasels have pulled this stunt on other clients as well.
Well, one of the economic torts instantly comes to mind – those chapters at the back of your Introduction to Tort book from law school that you never looked at. This would say: you nasty Weasels interfered with my contract unlawfully and I suffered loss. Sound plausible? That was pleaded too, but then this dynamic and progressive firm out with a real bad boy of a claim: an attorney’s lien (pronunciation as in David).
Not heard of that? This is a magic wand fashioned in that special, mysterious smithy known of yore as the Court of Equity. Lawyers will know the various mystic phrases: Equity is a patch on the cloak of the common law; equity comes to fulfill the common law, not destroy it.
Or put another way, Equity throws a loving, protectionist arm around poor Badger and tells the Weasels to pay all of Badger’s costs, expenses and success fees. Welsh judge, HHJ Milwyn Jarman had been less impressed with Equity’s charms at first instance, but Lloyd Jones LJ completely succumbed to her blandishments.
There is, he reckoned, something so special about a solicitor, that he should be kept safe from loss by whatever means. Or to quote Lord Kenyon in Read v Dupper 1795:
“The party should not run away with the fruits of the cause without satisfying the legal demands of his attorney, by whose industry, and in many instances at whose expense were gained.”
We can all agree with that. If you make a contract, you should keep it. If you eat a meal in a restaurant, you shouldn’t run away without paying. But bad things happen, and any transaction carries with it a risk of default. What the solicitor’s lien does is impose an additional liability on the third party former defendant, to pay the bill in default. Or as Lord Mansfield said in Welsh v Hole 1779:
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 transitu 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.
Actually, here the solicitor didn’t succeed, but throughout the nineteenth century, there were lots of attempts, some of them successful made on the basis of the lien and attracted the “equitable intervention of the court”.
On one level, this makes sense. The Westdeutsche Landesbank case says that equity fixes on the conscience of a defendant. If the plaintiff and the defendant are colluding to avoid paying the solicitor’s fees, then one can see that Equity might have a thing or two to say about it. However litigants are free to settle litigation without involving their lawyers, and the idea of the would be defendant being essentially a guarantor for the solicitor’s fees is a bizarre one.
The solicitor’s lien found a twenty first starring role in Khans Solicitors v Chifuntwe two years ago. I do wonder what clever person turned up this case. The concept lay dormant in the twentieth century apart from a single outing in front of Scarman J.
Chifuntwe, a decision of Sir Stephen Sedley, with Ryder and Rix LLJ as makeweights, I found genuinely jaw-dropping. That “you’ve gotta be havin’ a laugh” feeling takes hold and your normative earning a meagre crust lawyer self puts on its hat and coat and takes a turn around the block whilst the critical legal devil rages itself into a puff of smoke.
Gavin Edmondson reprises Chifuntwe. Unlike Chifuntwe however, the insurance company’s behaviour was sharp and a rap on the knuckles was called for. Quite why though, a court in 2015 would resurrect a rule accepted as established in 1795, and dormant since 1897 (pace Fuld ) to administer the correction, is puzzling.
Nor is the rule based on solid or consistent legal argument. It’s clearly not a lien because the fruits of the litigation are not in the solicitor’s actual possession. If that were the case, there would be nothing remarkable about the doctrine. However this soi-disant lien is some kind of extra-statutory charge which is either based on collusion – mala fides – or on the doctrine of notice. Quite frankly Lord Mansfield’s analogy with an equitable assignment is queer. I note he handed down the judgment on a Saturday morning. Perhaps after an excessively sociable evening the night before.
The Weasels are seeking leave to appeal to the Supreme Court, and I hope the justices fancy a nibble. Don’t get me wrong; I don’t hold a brief for a barbary ape dwelling insurance giant. However digging up this non-contextualised fossil with all the insouciance of a early morning dog digging up a human skull at the beginning of a Scandi boxed set does nobody any good at all.