Supreme Court informed there is no return for Solicitors who signed new fees agreement

Solicitors have been accused of ‘rewriting history’ after maintaining they did not  

disregard their right to fees by taking extra security. Lawyers representing the liquidators in Candey v Crumpler & Anor informed the Supreme Court it could be assumed that the London firm had hoped to end its lien through the formation of the new security.

They attested that a solicitor owed a fiduciary duty to their client to describe the expanse of his interest, and the new agreement did not explicitly preserve the lien.

Representative of Crumpler, David Holland QC claimed it was ‘crystal clear’ that the plan was intended to replace the existing fees agreement when entering the new arrangement.

‘If the solicitor did not make clear that he intended to retain the lien, the court is entitled to infer that he did not intend to retain it,’ Holland further noted.

It was argued earlier in the hearing that Candey was being penalised for protecting itself from the possibility of a client who is unwilling or unable to pay their fees. Peak Hotels & Resorts Limited had been represented by the firm in litigation, but was owed several hundreds of thousands of pounds in unsettled fees, so therefore negotiated a fixed fee agreement and deed of charge.

When Peak broke down, liquidators affirmed this was a floating charge rather than a fixed one and made it less likely that Candey would be reimbursed the estimated £4.7m it claims to be owed.

The liquidators declared in court this week that Candey had already received £2.64m in fees for acting for Peak before the new arrangements, and then received an additional £941,359.

They insisted there was ‘nothing surprising or uncommercial’ about the Court of Appeal having found them in favour, and they dismissed the suggestion that this result had a ‘chilling effect’ on access to justice.

Holland stated: ‘Whether the new security has replaced the lien is not a matter which the solicitor may decide unilaterally.’ He additionally said that the terms of the fixed fee arrangement suggested it was planned to replace the prior agreement, since the new security under the deed of charge comprised the same property as the lien and was given more priority than the lien.