On 21 December 2022, the Supreme Court handed down its Judgment in Candey Ltd v Crumpler & Another (as Joint Liquidators of Peak Hotels and Resorts Ltd) [2022] UKSC 35. Daniel Saoul KC of 4 New Square chambers, with David Lord KC and Stephen Ryan of Three Stone, acted for the Appellant, Candey Ltd.
The case concerned the circumstances in which a solicitor will, and will not, be entitled to rely on an equitable lien over the recoveries of litigation, in order to get a first call over those recoveries in respect of unpaid fees – an issue which will often arise where the solicitor’s client is refusing to pay or is facing insolvency.
Specifically, the Supreme Court considered whether such a lien, which otherwise arises in the solicitor’s favour, will have been waived as a result of the solicitor taking additional security from the client in respect of their fees, and also considered the relevance of the client taking independent legal advice on the granting of that additional security. Ultimately, the question is whether, objectively assessed, the intention of the parties was that the lien should no longer exist. Key factors which the Supreme Court considered relevant to such an assessment will be whether the new security is inconsistent with the lien (including whether it covers the same property as the lien) and whether the solicitors expressly reserved their right to the lien.
The decision follows on from other recent Supreme Court decisions regarding the solicitor’s equitable lien, namely Gavin Edmondson Solicitors Ltd v Haven Insurance Co Ltd [2018] UKSC 21 and Bott & Co Solicitors v Ryanair DAC [2022] UKSC 8 (with Nicholas Bacon KC and Ben Smiley of 4 New Square Chambers having acted in Bott).
The full judgment in Candey is available here.
