Spence v Gerard Malouf & Partners Pty Ltd trading as Gerard Malouf & Partners - [2010] NSWSC 764 - NSWSC 2010 case summary — Zoe

NSWNSWSC

Spence v Gerard Malouf & Partners Pty Ltd trading as Gerard Malouf & Partners

[2010] NSWSC 764

Supreme Court of NSW|2010-06-21|Before: Bergin CJ

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2010-06-21

Before

Bergin CJ

Source

Original judgment source is linked above.

Judgment (168 paragraphs)

[1]

Introduction 1 This is a case involving solicitors retained on a "no win no fee basis, subject to terms and conditions for our fees" as described within a list of attributes promoted to the prospective client as to why the solicitors should be selected to represent the prospective client. The solicitors acted for the client for approximately two and a half years. However that relationship came to an end one week before the trial in which the solicitors were to represent the client. 2 The client, the plaintiff, Allan Spence, seeks an order pursuant to s 728(1)(b) of the Legal Profession Act 2004 (the Act) that the solicitors, the defendant, Gerard Malouf & Partners Pty Ltd t/as Gerard Malouf & Partners (GMP), give to Lawjet Lawyers, the plaintiff's present solicitors, the file in respect of proceedings No 20034 of 2008 in the Common Law Division of this Court (the Proceedings), unconditionally or alternatively on conditions as the Court may determine. GMP has resisted the production of the file and at the hearing of this matter continued to do so because it is claimed that GMP are entitled to "satisfactory security" and none has been proffered. The Act 3 Section 728 of the Act provides as follows: 728 Supreme Court may order delivery up of documents etc (1) On the application of a client of a law practice , the Supreme Court may order the law practice : (a) to give to the client a bill of costs in respect of any legal services provided by the law practice , and (b) to give to the client , on such conditions as the Supreme Court may determine, such of the client 's documents as are held by the law practice in relation to those services. 4 The applicant is referred to in s 728(1) as "a client of a law practice" and "client" is defined in s 4 of the Act to include "a person to whom or for whom legal services are provided". Although these terms are in the present tense, no issue was raised in respect of the plaintiff's standing as a former client to bring an application under the section. It is common ground that: (a) a bill of costs has already been provided to the plaintiff; and (b) that the expression "the client's documents" in s 728 (1)(b) of the Act is to be understood in this case, as GMP's file in respect of its retainer by the plaintiff in the Proceedings.

[16]

Please note this schedule is provided as a guide only and we are prepared to consider reducing our claim for professional costs to maximise the amount received by you, particularly in cases which settle in the range of $10,000.00 - $30,000.00 inclusive of costs, depending upon the specific circumstances of the action. 11 GMP advised the plaintiff that by continuing with the matter and by signing and returning the medical authorities, he was accepting the terms of the costs agreement. Although a signed copy of the letter is not in evidence the parties have proceeded on the basis that the plaintiff signed the letter. Preparation for trial 12 Although it can only be gleaned from GMP's Bill of Costs, it is clear that GMP took steps to have the case prepared for hearing, including filing all the appropriate pleadings, attending directions hearings and conference hearings, and preparing the plaintiff's evidence. At the directions hearing on 26 August 2009 the matter was set down for trial for 10 days commencing on 22 March 2010. January 2010 13 On 15 January 2010 GMP prepared an "extensive brief" on hearing for Mr Elliott for the hearing of the matter in March 2010. GMP also considered the application by the solicitors for the defendant, Yeldham, Price O'Brien Lusk (YPOL), to call evidence by Audio Visual Link from the United Kingdom from Mr McNally, a solicitor with the defendant. A serious factual issue emerged in the Proceedings as to whether the previous solicitors had said to the plaintiff that they would take certain steps to commence proceedings at a particular time to avoid the proposed introduction of legislation limiting the recovery of damages for personal injuries in negligence claims. On 22 January 2010, the plaintiff refused to consent to Mr McNally's evidence being given by Video Link. 14 On 29 January 2010, the solicitor at GMP with the day-to-day carriage of the matter, David Cossalter, worked on the matter for approximately one and a half hours, three quarters of which was spent conferring with the plaintiff. It is clear that during this conference a proposed offer of settlement was discussed, as was the prospect of briefing Senior Counsel. After this conference Mr Cossalter wrote to the plaintiff in relation to the conference and confirmed his instructions that Senior Counsel was not to be briefed. However Mr Cossalter advised that he had reviewed the matter with the Managing Partners of GMP "with particular reference as to quantum" and that he and the Managing Partners were of the opinion that "where we are (in) litigation against other firms for a potentially large sum the involvement of Senior Counsel is warranted". Mr Cossalter also advised that the Managing Partners were "of the strong opinion that a Senior Counsel would add value to your matter if only for the pressure that they (sic) will place on the defendant to resolve the matter" and that "the potential case can bare the added charges that having a Senior Counsel will incur". 15 Also on 29 January 2010 Mr Cossalter wrote to the plaintiff by email advising that, "as per our discussions yesterday, I confirm that we will put forward an offer of settlement in the amount of $20 million inclusive of legal fees".

[18]

Offer of Compromise 19 On 15 February 2010 YPOL served on GMP an Offer of Compromise of $100,000 plus costs as agreed or assessed. In support of the Offer of Compromise YPOL informed GMP that they were of the opinion that the plaintiff would fail on all issues relating to breach of duty of care by the solicitors because: (1) the solicitor in question Mr McNally (who would be flying out from the United Kingdom to give evidence) denied giving an undertaking or advice to the plaintiff that proceedings would be commenced against the Owners Corporation by 11 March 2002; (2) the plaintiff's own correspondence of 22 March 2002 made it clear that he was aware that proceedings had not been commenced by that date; (3) the plaintiff's claim that Mr McNally advised him in January 2002 that it was important to commence proceedings to avoid imminent changes to personal injury laws would not be accepted because there was no such information in the public domain at that time, a matter conceded by the plaintiff's expert; (4) the plaintiff's allegation that the solicitor had failed to seek unlimited jurisdiction was untrue because consent to such unlimited jurisdiction in the District Court had been obtained; and (5) the plaintiff's claim that the solicitors had breached their duty by failing to join a Mr Rosinski, the alleged driver, to the proceedings was hopeless because: (a) Mr Rosinski had been subpoenaed but, in any event, denied any involvement with the accident; and (b) the plaintiff had ultimately taken steps to join the driver but abandoned the application of his own accord. 20 On 17 February 2010 GMP wrote to the plaintiff enclosing YPOL's letter of 15 February 2010 noting that the plaintiff had 28 days to respond to the Offer of Compromise by 5pm on 17 March 2010. GMP advised the plaintiff that if he did not receive a verdict in excess of the Offer of Compromise he would be ordered to pay the defendant's costs from the date of service of the Offer of Compromise. GMP requested the plaintiff to arrange a conference to give them instructions. 21 On 17 February 2010 Mr Elliott wrote by email to GMP at 11:32 AM in the following terms: We have been offered $100,000 plus costs. This would be an excellent result.

[25]

Briefly and for the record, the issues which concern me and cause me to advise acceptance include:- a. The improbability of the Plaintiff establishing the breach of undertaking to commence by 11.3.02 on which the case on liability largely turns; b. The improbability of establishing any loss arising from any breach of duty, given the ultimate result obtained by the plaintiff from the Insurer of $1,000,000 inclusive for accident for which he suffered no fracture, was not hospitalised and did not even see a doctor for several days; c. The unconvincing medical evidence, which evidence most fairly establishes a minor aggravation of a pre-existing and symptomatic degenerative condition for a Plaintiff who worked in a sedentary capacity in any event; d. The unconvincing Economic Loss evidence, for a plaintiff who earned $120,000 in his best year, 1998, in a job he no longer held, and now worked for a company which had yet to make any money and which, just days pre-injury, was prepared to sign an employment contract with the plaintiff granting wages of $4,000pw which it could not honour. e. The absence of any identifiable loss by failure to commence an MAA claim as opposed to the Occupiers' claim. 24 Mr Elliott indicated that he would be available for a conference with the plaintiff and that he reserved his rights under his Fees Agreement (which is not in evidence) to terminate any contingent aspect of his retainer if the plaintiff rejected the advice and the Offer of Compromise. Four weeks from trial 25 On 24 February 2010 at 5:48 PM, GMP (Mr Cossalter) wrote to the plaintiff referring to the recent Offer of Compromise of $100,000 plus costs and advising as follows [emphasis added]: We confirm that Mr Elliott has formed the opinion that even should we be successful in proving the negligence of the defendant, it is unlikely that you will exceed the offer made by the defendant. Mr Elliott also notes that you have received substantial payments from the substantive proceedings and is of the opinion that a Court will find it difficult to determine that you would have done better under the Pre Civil Liability Act regime.

[150]

I will need court appointed Barrister under the appropriate act to attend on my behave (sic) to protect and instruct the Supreme Court, Informed Supreme Court judges and previous appointed Barrister under the Court. 61 Harrison J said: The plaintiff, although not present today, has, so the evidence reveals, been informed that his present solicitors are proposing to make this application. It seems to me, having regard to Mr Cossalter's affidavit, that the relationship of solicitor and client between them and the plaintiff has already broken down, and that, given the shortness of time between now and the commencement of the hearing scheduled on 22 March next, there is little, or in practicable terms, no, likelihood that either alternative solicitors could be retained in time or that, having regard (sic) the other material before me, the plaintiff would be in a position to proceed to conduct the litigation by himself. Trial vacated 62 Harrison J granted leave to the defendant to file a Notice of Ceasing to Act. His Honour also vacated the hearing date and reserved the question of costs. 63 GMP served a Tax Invoice dated 12 March 2010 on the plaintiff in the amount of $233,804.20. 64 On 17 March 2010, GMP notified YPOL that it had filed the Notice of Ceasing to Act; that it was in dispute with the plaintiff with regard to costs, fees and disbursements on a solicitor-client basis; and that it had advised the plaintiff that it was notifying YPOL of its asserted entitlement to be paid its solicitor-client professional costs, inclusive of GST, disbursements inclusive of counsels' fees and inclusive of GST for a total of $233,804.20 plus reasonable enforcement costs and disbursements on the basis of a 'fruits of the action' lien. GMP requested YPOL to notify them and not distribute any moneys to the plaintiff unless they consented and sufficient moneys were put aside for their costs. 65 On 22 March 2010 the matter was listed for directions before Harrison J. There was no appearance for the plaintiff and YPOL appeared for the defendant. YPOL advised the plaintiff by letter of 23 March 2010 that his Honour had adjourned the directions hearing to Friday 30 April 2010 to give the plaintiff an opportunity to obtain legal representation and "to respond to the events, particularly those occurring last week". YPOL also advised the plaintiff that Harrison J had reserved the costs of the Notice of Motion on 16 March 2010 and the costs of 22 March 2010. April-May 2010 66 On 28 April 2010 the plaintiff's present solicitors, Lawjet Lawyers, wrote to GMP requesting the file. On 3 May 2010 GMP advised that they were in the process of "identifying the extent of the lien that we can hold over the client file" and that they would be in touch shortly. On 12 May 2010 Lawjet wrote again to GMP asking whether they would be providing a copy of the file. On 13 May 2010 Lawjet wrote to GMP as follows: We refer to our previous correspondence with respect to this matter and that you have been considering your position for some time. You are fully aware how advanced this matter was at the time you sought to cease to act and now to simply ignore our request is causing delay in costs for both the parties and the courts. You would be aware that we are at liberty to make application to the Supreme Court of NSW in accordance with s728 to obtain this file. We intend to file such application failing you providing our client with his file within (7) days. Please note we will be seeking orders against you should it be necessary to make such application.

[160]

79 In support of GMP's submissions, Mr Elliott relied upon Salvatore Blanda v Kemp Strang Lawyers Pty Ltd [2006] NSWSC 48, a case in which James J dealt with an application by the plaintiff for an order pursuant to s 728 of the Act in circumstances where the defendant, Kemp Strang Lawyers, had ceased to act for the plaintiff. That was not a case in which the solicitors agreed to act on a "No Win - No Charge" basis. Rather the solicitors in that case had estimated their costs and indicated that they would send a bill of costs to the plaintiff at the end of each month. After two years the costs payable to the solicitors were in arrears in the amount of $67,815.23 and an arrangement was made for the plaintiff to pay the costs by instalments. The plaintiff failed to comply with that arrangement, albeit that some moneys were paid. There was an issue as to who had terminated the relationship. After reviewing the relevant authorities James J concluded that it was the plaintiff who had terminated the solicitors' retainer. His Honour then proceeded to decide whether the defendants' costs were "satisfactorily secured". In this regard his Honour referred to the following passage of McColl JA's judgment in Bechara t/as Bechara & Co v Atie & Anor [2005] NSWCA 268 at [64]: The expression "satisfactorily secured" should be understood, both by reference to the authorities dealing with possessory liens, and in its textual context, to refer to the provision, in lieu of payment, of something of monetary value which would ensure the satisfaction of the possessory lien. Like should be replaced with like. 80 The costs agreement in Bechara purported to be "a conditional costs agreement" which provided for the client to pay the solicitors' costs if the action was successful. That agreement contained an estimate of costs of the proceedings to be $10,000 to $15,000 plus $2,000 for disbursements. It also included a "premium of 25%" on both costs and disbursements. When the client instructed new solicitors who requested the file from the original solicitors, there was debate about the basis upon which the file would be produced. There was delay in this process by reason of the first solicitor requiring to be "satisfactorily secured". The appeal related to costs awarded by the trial judge by reason of the trial date having to be vacated because of the delay in the production of the file. 81 There was no issue in that case that the solicitors were entitled to claim a lien over the file notwithstanding that the solicitor's entitlement to recover costs was based on a conditional costs agreement, recovery under which depended on the success of the action. In the present case there is such an issue. 82 McColl JA also said: 43 A solicitor may have the benefit of two types of liens: a possessory lien, pursuant to which the solicitor may retain a client's personal property in the solicitor's possession until all costs owed by the client for the provision of legal services have been paid and a "fruits of action" lien, pursuant to which a solicitor whose efforts result in the recovery of money for his client [can] have his proper costs and disbursements paid from the money so recovered. It is the possessory lien which finds expression in rules 8 and 29 of the Solicitors Rules.

[162]

83 GMP's reference to the Solicitors Rules can therefore be understood to be a claim of a possessory lien over the file. As McColl JA said in Bechara at [43], in the case of a possessory lien, the solicitor is entitled to retain the file until all costs owed by the client for the provision of legal services have been paid. Does the plaintiff "owe" costs to GMP? 84 If the plaintiff owes costs to GMP then GMP are entitled to claim a possessory lien over the file and have their costs "satisfactorily secured" on the production of the file to the plaintiff. 85 The circumstances described in the Retainer in which GMP would "request" that their reasonable costs and disbursements be paid or a "satisfactory agreement" be entered into as to payment of those outstanding costs and disbursements, falls into two categories. The first is conduct of the plaintiff in leaving the firm or changing solicitors. The second is the conduct of the plaintiff, whilst remaining with GMP, "terminating the matter midway through on an unreasonable basis". 86 The Retainer uses the word "matter" in a number of contexts: (1) in the warning given to the plaintiff as to when he would have to pay the other side's legal costs with advice that he would have to do so if "the matter proceeded to be fully litigated with a Judgment entered against" him: (2) in the explanation of the time it would take to "settle the matter" with a request for the plaintiff to be patient with the "progress of the matter": and (3) in the context above of "terminating the matter midway through on an unreasonable basis". 87 I am satisfied that the parties intended that the expression "terminating the matter" to mean the termination of the Proceedings, upon an unreasonable basis. The expression "midway through" is rather imprecise, however I am satisfied that the context suggests that the parties intended it to mean before the work, the subject of the retainer had been completed. The concept of the termination of the Proceedings was not further explained or explored in the letter and although such an expression lends itself to a number of different circumstances, I am of the view that it was intended to mean that the Proceedings were not pursued to either a successful settlement or judgment. 88 There is a question as to whether the term "upon an unreasonable basis" is limited to the conduct of "terminating the matter midway through" or whether it also applies to the plaintiff's conduct of leaving the firm or changing solicitors. The conduct of leaving the firm or changing solicitors is conduct of the client irrespective of the status of "the matter". The latter conduct of "terminating the matter" is a reference to bringing the Proceedings to an end on an unreasonable basis. I am satisfied that the expression "on an unreasonable basis" is limited to the termination of the matter/Proceedings. That construction is supported by the condition that GMP were not entitled to be paid unless there was a "win" or the plaintiff's claim was successful. If the plaintiff were to terminate the Proceedings, GMP's capacity to secure a "win" for the plaintiff, either in court or by way of settlement and to secure the payment of fees for themselves, would be removed. Accordingly the parties agreed that if the plaintiff terminated the Proceedings unreasonably, removing that capacity, GMP would be entitled to request payment of their costs and disbursements or request that there be a "satisfactory agreement" in respect of payment of their reasonable costs and disbursements. It is only the first category of conduct, leaving the firm that is relevant for consideration in this instance. GMP does not have to prove that the departure was unreasonable because that condition is limited to the termination of the matter.

[166]

For my part, I do not think that they can complain now and say "We did not discharge ourselves; you discharged us," because the defendants, not being willing to meet the bill, took the appellants at their word and instructed other solicitors … 93 Goff LJ also observed at 623: … a solicitor who has discharged himself is not allowed so to exert his lien as to interfere with the course of justice - he has, as it has been put, only a qualified lien. 94 In the same case, Templeman LJ observed that the appeal illustrated the difficulties that arose when "a client and his solicitor part company in the midst of litigation". His Lordship said at 624: A solicitor who accepts a retainer to act for a client in the prosecution or defence of an action engages that he will continue to act until the action is ended, subject however to his costs being paid. 95 The present case is distinguishable from Gamlen Chemical Co (UK) Ltd v Rochem Ltd because the solicitors promised that, subject to the circumstances referred to above, they would not charge the plaintiff any fees unless there was a "win", that is, unless the plaintiff's claim was successful. In Gamlen Chemical Co (UK) Ltd v Rochem Ltd there was an agreement for the payment of the solicitors' fees as the matter progressed. 96 In describing the "No Win - No Charge" policy, GMP were careful to describe the circumstances in which that policy "cannot operate" as being if either at the hearing or close to settlement, the plaintiff "purposely failed to disclose the truth concerning very important issues". GMP specifically warned the plaintiff that "under those circumstances" GMP would "not abide by our agreement in respect of a "No Win - No Charge" arrangement. GMP also advised the plaintiff to note that the "No Win - No Charge" indicated that GMP "would not charge a fee" if the plaintiff's claim "is unsuccessful". GMP were also careful to "point out" to the plaintiff that if after they commenced the plaintiff's case it appeared to them to be "relatively weak" or "had problems in it" they would bring those matters to the plaintiff's attention and the plaintiff would have the opportunity to negotiate with the other side "not to proceed". GMP then advised the plaintiff that in their experience "most of the time it would be possible to withdraw from the action without being responsible for the other side's legal fees". GMP warned the plaintiff that this would not be the case if the matter proceeded with a judgment being entered against him. However that warning was tempered with the statement, "kindly note that this firm is successful in at least 98% of claims". 97 The Retainer included the following: Solicitors and/or barristers are not to act unless there are reasonable prospects of success and must not provide legal services and/or commence a claim unless there are reasonable prospects of success. In the event that your lawyer commenced your action without reasonable prospects of success, that lawyer may be held responsible for any costs incurred. We point out, however, that based upon our investigations to date and assuming the facts as disclosed by you are correct, we believe there are reasonable prospects of success in maintaining your claim for public liability. This does not mean to say that there are no risks in pursuing the claim. 98 The Retainer made no mention of the prospect of GMP ceasing to act for the plaintiff if they, or counsel, formed the view that the plaintiff would not achieve a better outcome than any Offer of Compromise. The Retainer made no provision for circumstances that would require the plaintiff to pay GMP's outstanding fees within seven days if GMP formed the view that the plaintiff would not achieve a better outcome than any Offer of Compromise. Nor did the Retainer contain any provision or explanation that if the plaintiff refused to take GMP's reasonable advice, they would be entitled to cease acting for him and he would be liable to pay GMP's fees for the legal services provided up to that time. 99 GMP's letter of 24 February 2010, one month before the trial, in which they advised the plaintiff that they would not continue to act if Senior Counsel's opinion was that the plaintiff would not exceed the Offer of Compromise, unless he made arrangements to attend to payment of their fees within seven days, was in my view, a most unreasonable threat. That threat was compounded further by GMP's less than veiled threat in the same letter that the plaintiff would have to go to trial without legal representation because the hearing date would not be vacated for a change of solicitors. These were extraordinary threats in circumstances where three days earlier the plaintiff had indicated that he was willing to settle for a reasonable amount but not for $100,000. 100 It is not surprising that the following day, 25 February 2010, the plaintiff responded by stating that by GMP "ceasing to act" he had "no options open" to him. However the plaintiff agreed that in order to get any further offer, a reasonable counter-offer would have to be put giving him a "clear payout of $250,000". The plaintiff instructed GMP to proceed to draft that "reasonable offer". 101 It is quite unclear how GMP were in a position on 4 March 2010 to advise YPOL that the plaintiff had agreed that $190,000 would be accepted by way of costs and disbursements if the matter settled. During submissions Mr Elliott advised that such instructions were oral. However there is no evidence of this and GMP's email to the plaintiff on 8 March 2010, although referring to an offer made by them of $410,000 plus costs of $190,000, makes no mention of the plaintiff having agreed to such a figure for costs. That email also referred to the defendant's offer of $110,000 plus $140,000 for costs, as a "good offer" and advised the plaintiff that if he rejected it they would "file a Notice of Ceasing to Act" and charge costs at "full freight", whatever that was supposed to mean. 102 On 9 March 2010 the pressure of the threats was intensified with the managing partner, Mr Malouf, weighing in to the communications with the plaintiff. Mr Malouf informed the plaintiff that GMP were "not obliged at law to continue acting on a no-win basis" and reminded the plaintiff that the case commenced on 23 March 2010 (although it appears it may have been 22 March 2010). Mr Malouf then advised the plaintiff that: (1) GMP had no Counsel who would represent him; (2) GMP would need to file a Notice of Ceasing to Act the following day; (3) GMP had "as a courtesy" to the plaintiff remained in the matter attempting at his request to extricate a reasonable settlement; and (4) unless the plaintiff paid $70,000 to "part cover" the hearing, GMP would file the Notice of Ceasing to Act. That same afternoon Mr Cossalter asked the plaintiff to instruct him as to what he would like him to do as per Mr Malouf's email. 103 The correspondence between the plaintiff and GMP establishes the emotionally distressed state into which the plaintiff declined after the threats were made. I have little doubt that the letter of 24 February 2010 triggered the decline of the relationship between the plaintiff and GMP leading to the rather florid allegations subsequently made by the plaintiff. I am also satisfied that there was no proper basis on which GMP could require the plaintiff to pay their costs or fees within seven days. As I have said above it was an extraordinary threat. 104 It is clear that although the plaintiff claimed in his email on 10 March 2010 that he had instructed new solicitors, GMP advised him the following day that they were still his legal representatives. It is also clear that the plaintiff had not secured new solicitors by that time. The counter-offer of $100,000 on 15 February 2010 to the plaintiff's offer of $20 million on 1 February 2010 was clearly a surprise to the plaintiff. It is not clear to me what had been said to the plaintiff in conference about his prospects of success, however GMP were willing to put an offer of $20 million in early February 2010. 105 It is also clear that the plaintiff wished to object to GMP ceasing to act and requested GMP to advise the Court of his return to Australia on the morning of 16 March 2010, with the irresistible inference that he was seeking an adjournment of their application for leave to cease to act. The affidavit relied upon by GMP in support of its application for leave to cease to act made no mention of GMP's advice, to use a neutral term, to the plaintiff that it would cease to act unless he paid their costs within seven days of Senior Counsel's opinion. The presentation to the Court was that the plaintiff's erratic conduct was unwarranted and inexplicable. 106 The refusal by a solicitor to continue to act unless he is put in funds has been regarded as the effective discharge of his retainer: Gamlen Chemical Co (UK) Ltd v Rochem Ltd per Goff LJ at 621; Ismail & Anor v Richards Butler (a firm) [1996] 2 All ER 506 at 522. However after GMP made the series of threats to cease acting they remained instructed and advised the plaintiff that they were still his legal representatives. GMP then sought the leave of the Court to cease acting for the plaintiff and was granted such leave. It was then that the relationship between the plaintiff and GMP was terminated. As was the case with the solicitors in Gamlen Chemical Co (UK) Ltd v Rochem Ltd, GMP cannot now claim that it was the plaintiff who terminated the relationship or left the firm.

[167]

107 There is nothing in the Retainer dealing with GMP's entitlement to payment of costs if GMP terminates the Retainer. However it has not been argued in these proceedings that GMP does not, or may not have a fruits of the action lien. All I am dealing with is the application for the production of the file and whether the plaintiff presently owes GMP any costs. GMP has already served notices in purported protection of its claimed fruits of the action lien. That may be a matter for another time, if necessary. 108 The plaintiff did not leave the firm. The firm discharged itself and terminated the relationship with the plaintiff. There being a "no-win" either in Court or by way of settlement at this stage, the plaintiff does not presently "owe" GMP any costs. Accordingly GMP do not have a possessory lien over the file and are not entitled to resist production of the file. Nor are they entitled to be "satisfactorily secured" as that term is understood under the Solicitors Rules. However, I am satisfied that it is appropriate to require the solicitors for the plaintiff to return the file to GMP after settlement or when the Proceedings are terminated or concluded, to enable GMP to pursue the claimed fruits of the action lien. 109 This case has exposed some unsatisfactory by-products of retainers on the basis of a "No Win- No Charge" policy. It is obvious that the promotional statements made in the Retainer were made for the purpose of luring the plaintiff to instruct the firm. The claim that GMP "is successful in at least 98% of claims", clearly conveying that they "win" one way or the other, not less than 98% of the claims, would give any prospective litigant cause for comfort. 110 It is clear to me that the solicitors were very concerned that if they did not secure a settlement they would not be paid any fees or costs. I am satisfied that this concern caused the highly inappropriate threat to be made in the letter of 24 February 2010. In a "No Win - No Charge" retainer when solicitors' livelihoods and incomes are bound up with and dependent upon the client taking a particular step in litigation, it seems to me that the capacity to provide the client with objective advice about taking that step is compromised. The greater the amount of fees to be lost the greater the prospect of compromise. These types of retainers are fraught with difficulties if they are not drafted with exquisite clarity. Experience shows that there are always prospects of a client wanting to take a second opinion or change solicitors. Great care must be taken to explain the circumstances in which a client will be responsible for the solicitors' fees. In the competitive world of securing clients, it is also very important that prospective clients are informed of the specific circumstances in which a solicitor may terminate the retainer, particularly on the basis that there will be an entitlement to do so if the client refuses to accept reasonable advice. Orders 111 GMP is to produce the file to the solicitors for the plaintiff, Lawjet Lawyers, within 7 days. The solicitors for the plaintiff are to return the file to GMP after settlement or when the Proceedings are terminated or concluded, to enable GMP to pursue their claimed fruits of the action lien. The defendant is to pay the plaintiff's costs of this application. **********************************