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Changing lawyers – things to know

From time to time, we get enquiries from potential clients who have an existing lawyer, but for one reason or another, want to change lawyers. Can they do this? How do they do this? What should you know?

The legal industry, is a professional service industry, and like any service industry, lawyers need to provide a high level of service, communicate well with their clients, and be responsive to their client’s requirements. Unfortunately, from time to time, potential clients have consulted me and complained about a number of those characteristics, being absent. I have been asked “Can I change lawyers?”; or “How do I change lawyers?” Some client’s even had a belief, that having engaged a lawyer, they were “locked in.”

Consumers should expect to receive good service and advice from the lawyers, as they would of any supplier. My first recommendation, would be for a client to discuss his or her issues with their existing lawyer, to see if their concerns can be successfully addressed. This may be easier in a case of a simple misunderstanding or mistake. Other times, the client may not wish to do this, as the client has lost confidence in his or her lawyer, which may be due to a continuing pattern of behaviour, leading to client dissatisfaction: - the “I’ve had enough” scenario.

When a consumer reaches the point that they no longer have confidence in the lawyer’s ability to service their requirements, then in my opinion, it may be in both the best interests of the lawyer and the client, that the client has a way to exit the relationship. This in my experience, is important in personal injury compensation claims, where, it is likely that if a client has lost confidence in the lawyer, that client may have reluctance difficulty in accepting the lawyer’s recommendation, when the lawyer gets to the stage of negotiating settlement of the claim. This in turn, in my opinion, unnecessarily adds to the client’s stress.

So, in answer is the question, “Can I change lawyers”, the answer is “yes”, subject to the contractual relationship between the client and the existing lawyer. In commercial transactions, there is likely to be a specific legal service contract, which will set out the terms, including the ability of the relationship to be terminated by either party.

In many other matters, including personal injury compensation claims, the contractual relationship between the client and the lawyer is contained in what is broadly described as a “Retainer Agreement”, or other similar terminology. This Retainer Agreement would have been signed by both the client and the lawyer.

In my experience, the usual Retainer Agreement, in personal injury compensation cases, contains a provision, that the client can terminate the retainer, but that the law firm has the right to bill the client for the work done to the date of termination, and the right to require payment of the bill at that time. The Retainer Agreement, may also contain provisions that until the bill is paid, the firm has a right to retain the file and documents. This is classed as a “lien”. As many personal injury law firms, offer a “No Win, No Fee” arrangement, this can be an important factor to consider. The reason for this, is that under such arrangements, if the law firm continued to act in the usual fashion, and not have its retainer terminated, then if the law firm was not successful in obtaining compensation, the law firm would not charge the client under the “No Win, No Fee” arrangement.

Accordingly, a client when terminating such retainer, may trigger (depending on the contents of the agreement), the right to be invoiced by the firm, and therefore not have the benefit of the “No Win, No Fee” arrangement. This may be of critical importance in a very difficult and complex case where there is a reasonable chance that the law firm may not be successful. It will be of less importance, in a case where the chance of success is strong. This is one of the aspects, I discuss with a potential client, when approached about changing lawyers, for their personal injury claim.

Another aspect I would discuss, would be the potential “lien”, the existing law firm may have over documents, until its fees are paid. The Australian Conduct Rules (ACR), which govern lawyers, sets out various provisions relating to client documents. ACR 14 refers to the common law recognising that a solicitor may have a “retaining” or ”general” lien, over client documents for unpaid costs, with such lien entitling the solicitor to resist a claim by the client for delivery of client documents, until costs are paid, or in some cases, until security is provided.

ACR 15 provides that, notwithstanding ACR 14, in a case where client documents are essential to the client’s defence or prosecution of current proceedings, then the existing lawyer must surrender the documents to the new lawyer, in the following circumstances:

  1. The new lawyer undertakes to hold the documents subject to the lien, and with reasonable security for the unpaid costs; or
  2. The existing lawyer agrees to the new lawyer agreeing to pay, or entering into an agreement with the client to procure payment of, the existing lawyer’s costs upon completion of the relevant proceedings.

Alternatively, the existing lawyer, upon receiving reasonable security for the unpaid costs, must deliver the documents to the client.

Reasonable security may include:

  1. An undertaking given by a solicitor;
  2. A deed entered into by the relevant parties, such as the existing lawyer, the new lawyer, and the client.

In my experience, in personal injury files, when a client wants to change from one lawyer to another, it is usual practice for the existing lawyer to release the documents, on the client signing an Irrevocable Authority, which directs the new lawyer to pay to the existing lawyer the costs, upon receipt of settlement funds, following conclusion of the claim.

To facilitate a change of lawyers, the new lawyer will normally write to the old lawyer, providing an Authority from the client to provide documents and files to the new lawyer, which may, (depending on the wording) constitute a termination of the client’s retainer of the existing lawyer. As an alternative, the potential new lawyer, may make enquiries on behalf of the client, as to how the transfer of file, could be facilitated, if the client elected to terminate the retainer. This may reserve the client’s rights to remain with the existing lawyer, if the terms of transfer were unacceptable. It should however be noted, that in a situation where there are proceedings on foot, if there was disagreement on the terms of transfer of the documents, an Application could be made to the Court, seeking release of the documents. If the terms of the transfer sought to be imposed by the existing lawyer, were considered to be too onerous, by the Court, it is likely that an Order would be made for the release of the documents, on appropriate terms.

If you are injured, or need advice on changing lawyers, please contact an expert compensation lawyer here at LawCall for a no obligation initial free consultation.

Written by
Graeme Kirkham
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