Every retainer ends, there are procedural steps you must take when ending a retainer. There are three scenarios to consider: (i) where you have performed all the required services, (ii) where the client ends the retainer and (ii) where you end the retainer.
In the first two instances you need to write to the client noting that:
1. The retainer has ended, and you are no longer advising the client; and
2. You are not responsible for reminding them of deadlines and follow on actions, they should note these (if any). If so, you might want to provide a list or some examples. Be clear if it is an exhaustive list or just some examples.
You may also want to add that if they need further help, they should get in touch, that they should keep their documents safe, you would appreciate your bill being paid by return and you might want to ask them for a review on Google or Trust Pilot.
It's relatively simple for a client to end the solicitor retainer but not so easy for a solicitor to do so. Bringing your retainer to an end is not straightforward and is best avoided. The best way to avoid it is to have a tight scope and at the end of the retainer simply not extend the scope. That is within your discretion and refusal to accept follow on instructions is a world away from the regulated position of having to cease acting.
That said, there will be times when you need to cease acting for a client. While this should be rare, it is permitted and in some cases, it is required (e.g. see Conflicts). A Pod Principal can terminate the retainer before the conclusion of a matter if (i) they give reasonable notice; (ii) if there is a good reason for refusing to act further and (iii) they cannot see any adverse consequences for the firm. Pod Principals can put their own fees at risk, but if a decision to terminate will impact the fee recovery of a colleague, then that colleague must agree with the decision to terminate. (Note: the rules on the "entire retainer" doctrine can mean that termination of the retainer causes us to have to refund all sums paid, potentially including disbursements, in the retainer. This is usually only relevant in litigation matters and is old law that could be used against us in a costs challenge. The position is not certain, but where this is a material risk, this should very much be considered.) If all the lawyers working on the client/matter are not in agreement as to termination then the matter must be referred to the General Counsel. If there is a foreseeable risk of a client complaint, a claim, or a threat of an allegation of regulatory breach, then you should consult the General Counsel. before terminating.
The Code no longer provides guidance on terminations of retainers, but it used to and the likelihood is that following the old guidance would be a good idea. The SRA Code of Conduct 2011 allowed you to "decline to act or cease to act where you cannot act in the client's best interests". The SRA Code of Conduct 2007 gave further (and still useful) guidance as follows:
"
8. A client can end the retainer with you at any time and for any reason. You may only end the relationship with the client if there is a good reason and after giving reasonable notice. Examples of good reasons include where there is a breakdown in confidence between you and the client, and where you are unable to obtain proper instructions.
9. If there is good reason to cease acting, you must give reasonable notice to the client. What amounts to reasonable notice will depend on the circumstances. For example, it would normally be unreasonable to stop acting for a client immediately before a court hearing where it is impossible for the client to find alternative representation. In such a case, if there is no alternative but to cease acting immediately, you should attend and explain the circumstances to the court. There may be circumstances where it is reasonable to give no notice."
The SRA Code of Conduct 2011 referred to Outcome 1.3 and Indicative Behaviour 1.26;
O(1.3): "when deciding whether to act, or terminate your instructions, you comply with the law and the Code";
IB(1.26): "ceasing to act for a client without good reason and without providing reasonable notice" would be an indicator of a breach of the SRA Principles.
Although there are no corresponding provisions in the current Code, you must still act in the best interests of your client. You should also bear in mind the retainer contract.
Good reasons for refusing to act further include:
We can cease to act if we cannot get proper instructions or if we are unable to act in the client's best interests. We also have a contractual right, subject to these regulatory fetters, to cease to act where our fees are not promptly settled. Under Section 65(2) of the Solicitors Act 1974, a failure by a client within a reasonable time to pay a reasonable sum on account of costs of contentious business is a "good cause whereby the solicitor may, upon giving reasonable notice to the client, withdraw from the retainer".
For help in deciding if you can no longer act, you are welcome to call the General Counsel. You should certainly think about what needs to be done before you cease to act. It might by then be optimistic but consider how we might get paid and ensure the file is complete before ceasing to act. Any leverage you have is lost when you are no longer acting.
If you decide you can no longer act, then you need to tell the client. It is best to do so by phone and then to follow up with an email. Though if relations are poor, then just an email will suffice. If possible, it is a good idea to suspend our services before ceasing to act. The effect is the same, but by suspending first it shows you have been reasonable. You need to say what will cause you to recommence your instructions in any suspension letter and of course you need to mean it. You can say that if it happens again, then that will entitle you to terminate on a given number of days' notice. Getting paid or the proper provision of instructions are two common triggers for lifting any suspension. There is a template termination of our retainer letter although you may wish to adopt a less formal style with your client.
Where we wish to terminate on account of our not being paid, there are additional considerations. If an invoice can be challenged (and often they can) or if the invoice is not overdue, then that is not a good reason for termination. As a result the best way to address this is to demand costs on account as well as having our invoices settled. The failure to pay costs on account is harder to challenge and is immediate and so, in practice, it is this ground which is the most fruitful and lowest risk way to terminate a retainer. You should discuss this with the General Counsel. You will find this template email to the client addressing costs on account and arrears helpful
However you do it, your reasonable notice needs to be in writing and it is a good idea in that letter/email to say why the notice given is reasonable. The notice will be reasonable if the period given allows the client time to find another lawyer. You should also provide the client with guidance as to what to do next (e.g. secure further legal advice). It is advisable to remind the client of all imminent deadlines including payment for counsel etc. and then set out what the consequences will be if you don't get instructions/funds by a certain date. You should not cease to act at a time when to do so would prejudice the client.
In most cases, when you terminate a retainer with the client, the former client or their new solicitor will give notice of the change under CPR 42.2. However, if the client or client's new solicitor fails to do this, you will need to apply for a court order that you have ceased to act, therefore removing the firm's name from the court record
As the former solicitor is considered as continuing to act for the client until the provisions of CPR 42 are complied with, the application should be made as soon as possible after the termination of the retainer.
When applying under CPR 42.3 (and 23), you need to serve a copy of the application notice and supporting evidence on the former client only (not on the other parties). Please note that the covering letter to the court should expressly state the application is not to be served on the other parties to the litigation (unless the court directs otherwise). For more information, see Re Creehouse Ltd [1983] 1 WLR 77 and other relevant cases).
Please also see some extremely helpful templates that were prepared by John McLinden KC at a CPD talk on the topic.
Where the court subsequently makes an order that the solicitor has ceased to act, a copy must be served on every party to the proceedings (including the former client). It is the former client's responsibility to provide the court and other parties with a new address for service in compliance with CPR 6. The order takes effect when it is served.
Without the order we become an unwilling post box, but there is no alternative, and we cannot charge for receiving documents and passing them on to the client.
Please note the following warning in PLC's guidance.
In John O'Hare and Kevin Browne, O'Hare & Browne: Civil Litigation (Sweet & Maxwell, 21st ed, 2024), the authors suggest that:
If solicitors on the record for a party become aware that a forthcoming court hearing is likely to be ineffective because of client-solicitor problems, the solicitors are "duty bound to warn the court and their opponents even if that has to be done at some modest cost to themselves". The authors refer to Holden & Co v Eastbourne BC [2014] EWHC 1322 (QB), in which a wasted costs order was made against the solicitors in circumstances where, the day before a hearing, the solicitors informed the court that there was insufficient time to prepare, they would take no active part and would agree to an adjournment. The court held that the solicitors could have notified the court earlier.
Where possible, it is therefore preferable to avoid leaving applications to come off the record to the last minute, as this may prejudice the client and expose the firm to the risk of a wasted costs order
In matters where you are not yet off the court record, once you have ceased to act you may consider it courteous to notify the opponent. It is suggested that you simply state: "We no longer act on behalf of [client] in this matter. Please therefore now correspond with [client] directly". Do not say anything about not having instructions as this could breach your client's confidentiality. Likewise, with regards to client contact details etc.
In Evans v Morgan and others (unreported), 11 September 2023, (County Court at Swansea) , the court gave guidance on the proper approach to applications to come off the record under CPR 42.3.
It's important to also consider the legal position as well as conduct matters. This includes the case law on wrongful termination and instances where you can't recover costs. This is under the "entire retainer doctrine".
Failure to give reasonable notice has prevented other firms in the past from recovering their unpaid fees (see recent case law including Buxton v Mills).
If the notice is not "reasonable", then the firm cannot point to any applicable provision departing from the general principle that remuneration can only be claimed when all work has been completed. In the absence of reasonable notice, the firm would be unable to claim for the costs sought.