What can lawyers do if you haven’t paid your bills? There are rules in place that protect lawyers when clients haven’t paid their fees and these include the right to exercise a lien over your property until you pay the outstanding fees in full. This article explains what a solicitor’s lien is and the type of property that a lawyer can hold.
What is a Solicitor’s Lien?
A lien is a solicitor’s right to keep your property until you pay all fees and payments that you owe them. It’s a form of security that helps lawyers ensure their fees are paid. A lawyer can claim a lien even when you have paid a substantial amount to them previously and only a small amount remains unpaid.
What Property Can the Lawyer Hold?
When exercising a lien, a lawyer can hold almost all of your property that they received while representing you. This means all of the:
- papers;
- deeds; and
- other documents contained in your file.
The lien can even extend to documents that the lawyer has received for other work they have done for you, even when you have paid those bills in full.
However, there can be some conflict over what documents fall under the lien. For example, courts have found that original file notes of telephone and personal meetings with you remain the property of the lawyer, even though they were produced in connection with legal work for you. However, a lawyer can not claim a lien over:
- title deeds of your property once the property has passed to another owner; and
- a will.
Can a Lawyer Hold Your Passport?
A recent case found that a lawyer can hold your passport where you obtained it for a specific purpose related to the legal services that the lawyer provided. This is the case even though the Commonwealth technically owns the passport. However, in some circumstances, a court may order that the lawyer return the passport to you.
Can a Lawyer Hold Your Money?
Yes. A lien can extend to money that a lawyer is holding on your behalf. For example, if you are successful in a court proceeding, the lawyer might receive a settlement payment from the other party, which is paid into the lawyer’s trust account. If you have not paid all the lawyer’s bills, then they can hold onto these settlement proceeds until you pay them in full. However, the lawyer can only hold enough money to cover the bills owed and must pay you any extra money.
What Does it Mean Practically?
A lien most commonly arises if you decide to change lawyers and the former lawyer claims a lien over fees that you still owe. This can cause problems for the new lawyer when they have an ongoing legal issue or court proceeding and they need the file for the proceedings. It may arise where the new lawyer disputes the amount owed to the former lawyer.
In these cases, there are guidelines to allow the file to be returned under certain conditions. These conditions include when you provide a reasonable amount of security in exchange for the return of the file for the purposes of the ongoing litigation. The new lawyer may also give a promise that they will return the file to the former lawyer when the proceedings have ended.
Independent Costs Consultant
You may also have a genuine dispute concerning the amount of money you owe the former lawyer. You can have an independent costs consultant assess those fees. In this case, you should reach an agreement about temporarily giving the file to the new lawyer with security or a promise to return it, as explained above.
Key Takeaways
If you don’t pay a lawyer’s bills for any reason, you may face consequences. Your lawyer has the right to hold onto any of your documents you have given them until you repay them in full. However, if you need your file for an ongoing court case, you may need to ask for advice the potential to:
- give security;
- have your costs assessed; or
- seek court orders in relation to the file.
If you have any questions about liens or need assistance with a matter regarding another lawyer, you can contact LegalVision’s dispute resolution lawyers on 1300 544 755 or fill out the form on this page.
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