Judgment has been handed down by the Supreme Court in Bott & Co Solicitors Ltd v Ryanair DAC  UKSC 8. The decision is an important one, confirming that no dispute is required in order for a solicitors’ equitable lien to arise.
The appellant, Bott, is a firm of solicitors which acts for clients in respect of flight delay compensation claims on a “no win, no fee” basis. A high proportion of such claims were brought against the respondent, Ryanair. Prior to 2016, Ryanair dealt with Bott in respect of the claims it handled, and when claims were admitted, would pay compensation directly into Bott’s client account. In early 2016, Ryanair changed its practice and began communicating directly with Bott’s clients, and paying compensation directly to them. As a result, instead of deducting its fees from the compensation paid into its client account, Bott now has to pursue its clients for payment. Following this change, Bott brought proceedings against Ryanair claiming an equitable lien over the compensation in respect of its costs, and an injunction restraining Ryanair from paying compensation directly to customers when Ryanair is on notice that Bott has been retained by them. An equitable lien would allow Bott to pursue Ryanair for fees unpaid by its clients.
The Supreme Court has held (by a majority of 3 to 2) that Bott is entitled to a solicitors’ equitable lien. The majority held that the lien arises where a solicitor (within the scope of the retainer with its client) provides services in relation to the making of a client’s claim (with or without legal proceedings) which significantly contribute to the successful recovery of a fund by the client. The majority rejected the proposition that an actual or reasonably anticipated dispute is required for the lien to arise. Important factors behind the test accepted by the majority were (1) that it would provide certainty for clients and solicitors; and (2) that it promotes access to justice because the vindication of a client’s rights, through the making of claims, is more likely to be effective if solicitors know that they have the security of a lien to recover their fee. It was recognised that Bott’s scheme allows consumers to benefit from professional assistance to recover compensation at a low cost, with no cost at all in the absence of recovery. The judgment will enable similar schemes to continue to be commercially viable.