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Can I exercise a lien over a bankrupt clients papers
I acted for a client in a property matter and issued a final bill. However, my client became bankrupt before paying the bill. His trustee in bankruptcy has asked me to provide 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 his possession until his costs are paid.
The solicitor's right to exercise a lien over documents belonging to a bankrupt is significantly restricted by section 349 Insolvency Act 1986 ('the Act').
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 Act and 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 that belongs to the bankrupt and, therefore, a solicitor 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 Act by the court to disclose the documents on the application by the trustee in bankruptcy.
For further information, please see the Law Society's practice note on confidentiality around client insolvency.
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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