Restrictions on lawyers enforcing liens are dropped from Handbook

The Benchers have removed a footnote in Chapter 10 of the Professional Conduct Handbook because it could unnecessarily compromise a lawyer's right to assert a possessory lien over a client's file in the collection of an unpaid fee.

Chapter 10, footnote 2 of the Handbook previously read:

2. When, upon severance or withdrawal, the question of a right to a lien for unpaid fees and disbursements arises, the lawyer should have due regard to the effect of its enforcement upon the client's position. Generally speaking, the lawyer should not enforce such a lien if the result would be to prejudice materially the client's position in any uncompleted matter.

Before accepting employment, the successor lawyer should be satisfied that the lawyer formerly acting for the client has withdrawn or has been discharged. It is quite proper for the successor lawyer to urge the client to settle or take reasonable steps toward settling or securing any account owed to the lawyer formerly acting, especially if the latter withdrew for good cause or was capriciously discharged. However, if a trial or hearing is in progress or is imminent, or if the client would otherwise be prejudiced, the existence of an outstanding account should not be allowed to interfere with the successor lawyer acting for the client.

The Benchers agreed to remove this footnote at the recommendation of the Ethics Committee. "At law a lawyer has a right to a possessory lien over files, documents, funds or other personal property of a client in the lawyer's possession until the client has paid all outstanding accounts owing to the lawyer," the Ethics Committee observed in its report to the Benchers in April. "Footnote 2 could create a conflict between a lawyer's right to assert a lien over a client's file and a lawyer's ethical obligation to ensure that the client is not prejudiced materially in an uncompleted matter."

The Ethics Committee pointed out that a solicitor's lien encourages clients to pay or arrange payment of their lawyers' bills and that footnote 2 of the Handbook removed that incentive. Most significantly, section 77 of the Legal Profession Act already provides sufficient legal protection for clients. Any client who believes that he or she will be prejudiced if a lawyer retains the client's file can apply to a court to the have the file delivered on appropriate terms.

The removal of the footnote from Chapter 10 of the Handbook is reflected in the Member's Manual amendment package in this mailing.