A client will not have to pay fees due to his former solicitors after the court ruled its decision to terminate was not reasonable.
Manjit Gill claimed to have been ‘left in the lurch’ by a firm when it closed in December 2013, weeks before litigation involving him came to trial.
Mr Justice Walker, sitting in the High Court in Gill v Heer Manak Solicitors, said the firm was not entitled to terminate its retainer and could not claim the fees which it sought in previous proceedings.
The claimant, Manjit Gill, had instructed Heer Manak Solicitors to work on his behalf in litigation between himself and, among others, HM Revenue & Customs. Terms were agreed in June 2013, but on 27 December 2013 – four months before the scheduled date of trial – Gill was informed the firm was closing down due to its failure to secure indemnity insurance.
Five weeks later, Gill received a letter clarifying that another Coventry firm now held his file, with a transferred Heer Manak employee continuing to handle the case.
But a dispute which continued concerned whether Heer Manak had good reason for terminating its retainer, and if so whether it had given reasonable notice of termination. At a hearing in January 2017, Master Simons had ruled in favour of the firm on both questions: the issue of reasonable notice was now subject to appeal.
The court heard the retainer between firm and client included provisions enabling the firm to make charges even though the entire obligation had not been carried out.
Gill, a student, submitted that he expected the firm to represent him until proceedings were concluded, and he received no suggestion whatsoever when he met with his lawyers for a case management hearing the week before the firm folded.
He highlighted a Gazette article which reported 135 other firms were in a similar position to Heer Manak, with the majority closing in an ‘orderly manner’.
Heer Manak stressed that from a solicitor’s perspective there was considerable risk in giving away to clients, before absolutely necessary, the fact there was a danger of it closing down.
Mr Justice Walker said the course taken by the firm could hardly be described as ‘orderly’, with no authority for transferring the file and no indication in subsequent correspondence that the successor firm had the necessary expertise.
The client, said the judge, was left without cover during a potentially significant period in the litigation, which could have affected his ability to comply with the court’s timetable.
The judge concluded the master was wrong to hold that the retainer could be terminated with no notice, and the appeal succeeded.