Supreme Court of Ireland Decisions

1. This is an application brought by the Plaintiffs pursuant to Section 3 of the Legal Practitioners (Ireland) Act, 1876 and common law.

2. Notice of the application has been given to all five Defendants. For ease of reference I shall refer to the first Defendant as “The Bank” , to the second Defendant as “The Accountants ”, to the third Defendants as “The Quantity Surveyors”, to the fourth Defendants as “The Auctioneers” and to the fifth Defendant as “The Receiver”.

3. The application refers to five Orders for Costs made by this Court on the 11th day of February, 1998. These five Orders related to five appeals against five Orders relating to security for costs made by the High Court (Mr. Justice Keane) on the 2nd day of March, 1992.

4. In the first of the said Orders this Court made an Order for Costs in favour of the Plaintiff against the Bank. In the second of the said Orders this Court made an Order for Costs in favour of the Plaintiff against the Accountants. In the third of the said Orders this Court made an Order in favour of the Quantity Surveyors against the Plaintiff. In the fourth of the said Orders this Court made an Order for Costs in favour of the Auctioneers against the Plaintiff and in the fifth of the said Appeals this Court made an Order for Costs in favour of the Receiver against the Plaintiff.

5. The present application is brought by the Plaintiff’s Solicitor to secure the costs awarded to the Plaintiff by the first and second of the said Orders of this Court. It is common place that the Plaintiff Company is, at present, insolvent so that the Plaintiff’s Solicitor claims that if he does not recover his costs out of the taxed costs awarded to the Plaintiff by the said first and second Orders of this Court he would have difficulty in recovering them.

6. The Plaintiff’s Solicitor avers that the Quantity Surveyors and the Auctioneers have intimated their intention to issue garnishee proceedings to attach all sums due to the Plaintiff under the said first and second Orders to satisfy costs due to the Quantity Surveyors and the Auctioneers under the said third and fourth Orders referred to. The Plaintiff’s Solicitor anticipates that the Receiver will make a similar application to attach sums due to the Plaintiff under the first and second Orders in satisfaction of sums due to the Receiver on foot of the said fifth Order of this Court.

7. In these circumstances the Plaintiff’s Solicitor applies to this Court for a Charging Order pursuant to the provisions of Section 3 of the Legal Practitioners (Ireland) Act, 1876.

8. Section 3 of the said Act provides as follows:-

9. There is no doubt that a Solicitor, whose fees and outlay have not been paid by his client, will normally have a lien on a property or fund recovered by his efforts to secure professional costs and outlay incurred by him. The same principle applies to a fund recovered under an Order for the payment of costs. For the same reason it is proper for a Court to protect the Solicitor's position by granting him a charge on property or costs recovered or preserved as a result of his efforts. Section 3 of the 1876 Act also contemplates that the Charging Order should be made by the Court which made the Order under which the claim to costs arises. The Solicitor’s application is therefore properly made in this Court and this Court will therefore make an Order charging all monies recovered under the said first and second Orders of this Court dated the 11th day of February, 1998 with the payment of all costs and outlay due and owing by the Plaintiff to his Solicitor arising out of the Solicitor’s conduct of these proceedings.

10. Just as his Solicitor’s lien attaches only to so much of a fund recovered by his efforts as is necessary to ensure that the Solicitor is paid for the work done in those proceedings so the Charging Order is effective to secure payment to the Solicitor of so much only of the fund as is necessary to defray the costs and outlay still owing to the Solicitor in respect of his efforts. In other words the primary purpose of the lien and the Charging Order is to protect the Solicitor against his client though the existence of the Charging Order or lien may have adverse consequences for other people. If the Solicitor has been paid in full by the client there will be no lien and no Charging Order. If the Solicitor has been paid nothing by his client and the fund out of which the costs are to be paid arises on a party and party taxation the amount due to the Solicitor on a Solicitor and client basis will usually be greater than the fund to be charged so that the sum due on a party and party taxation will merely satisfy the Solicitor and client bill pro tanto. If on the other hand the Solicitor has already been paid in part by his client the lien or Charging Order will affect only so much of the funds arising on a party and party taxation as is sufficient to defray the balance of the costs actually due to the Solicitor on a Solicitor and client basis. The amount due on foot of the Order for Costs in a party and party taxation is due to the client. In the normal course therefore he will have no charge over it. Nor may he avail of the Solicitor’s lien or charge to defeat, or gain priority over, any charge which any third party may have over the fund.

11. I mention these matters because the Respondents have suggested that some of the items in the Applicants Bill of Costs have already been paid or defrayed by the Plaintiff or some third person. This Court makes no finding on this point. It confines itself to deciding that the Solicitor is entitled to an Order charging all monies due and owing to the Plaintiff under the said first and second Orders of this Court dated the 11th day of February, 1998 with the payment of all costs and outlay now due and owing, on a Solicitor and client basis, by the Plaintiff to the Solicitor arising out of the Solicitor’s conduct of these proceedings.

12. If there is a dispute between the Bank and the Accountants on the one part and the Plaintiff and his Solicitor on the other part as to the amount of costs or outlay presently due from the Plaintiff to its Solicitor it will have to be decided elsewhere. It would not be appropriate that this Court, on an application such as the present, should attempt to resolve disputed questions of fact or disputed questions of priority as between charges or prospective charges.