Can I exercise a lien over a bankrupt client's papers?
My client became bankrupt before paying their final bill. Their trustee in bankruptcy has asked for certain documents from the file. Can I exercise a lien over the client's papers?
A solicitor has a common law right to retain any money, papers or property belonging to a client that have come into their possession until their costs are paid.
The solicitor's right to exercise a lien over documents belonging to a bankrupt is significantly restricted by section 349 of the Insolvency Act 1986.
There is an exception for documents of title to property, which are held "as such" – see the decision in Re SEIL Trade Finance Ltd  BCC 538.
A trustee in bankruptcy's power to obtain property stems from section 312(3) of the Insolvency Act 1986.
This places an obligation on any person including a solicitor "who holds any property to the account of, or for the bankrupt" to "pay or deliver to the trustee all property in his possession or under his control which forms part of the bankrupt's estate".
The trustee in bankruptcy's power relates to the property belonging to the bankrupt.
Asolicitor should only give to the trustee in bankruptcy the papers in a client's file that belong to the bankrupt client.
A solicitor can be compelled under section 366 of the Insolvency Act 1986 by the court to disclose the documents on the application by the trustee in bankruptcy.
While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.
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