The Supreme Court recently handed down judgment in Bott & Co Solicitors Ltd v Ryanair DAC [2022] UKSC 8

The decision affirmed that a solicitor’s equitable lien can arise over compensation amounts paid to a solicitor’s client, even where no proceedings have commenced. That was the decision in Gavin Edmondson Solicitors Ltd v Haven Insurance Co Ltd [2018] UKSC 21.

The Claimant firm had issued proceedings against the Defendant airline claiming a lien over compensation proceeds which had been paid directly to the Claimant’s clients rather than to the firm’s client account since 2016. The Supreme Court, in a 3-2 majority decision, decided that such a lien existed, and the Defendant could not bypass the Claimant’s account so as to avoid paying costs. Amongst the decisive reasons behind the outcome was the facilitation of access to justice and access to legal advice which such a lien provided.

Lord Burrows held that the test for a solicitor’s lien was, “whether 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.”

He held that the vindication of a client's rights, through the making of claims, was more likely to be effective if solicitors know that they have the security of a lien to recover their fees. On the facts, the Claimant had provided services to its clients which significantly contributed to their successful recovery of flight compensation under (now) retained legislation derived from EU Regulation (EC) 261/2004. The Claimant had issued claims for 45% of the passengers for whom it secured compensation.

Lady Arden added that the Claimant’s work, ‘while inconvenient to Ryanair, is entrepreneurial and clearly results in solicitors providing a service which people find useful’. Holding that any extension of the law on equitable liens (such as in this case) needed to be principled, she agreed with Lord Burrows’ test based on there being a claim in existence – whether there had been any proceedings issued – and she distinguished transactional services carried out by a solicitor (non-contentious work) for which there would be no such lien.

The Defendant reacted to the decision by encouraging passengers who were seeking compensation to approach the airline directly. Meanwhile, the Claimant considered the judgment an opportunity for the law to catch up to technology-based innovation in the provision of legal services. The Claimant added that it afforded the public protection via broadened access to legal advice.