Retainers can end in three ways: (i) the client terminates; (ii) you terminate; or (iii) you complete the work and no more is required.
The end of a retainer is an important event and should never be left ambiguous. During a retainer, we owe a wide range of duties to our clients, including duties to advise, act, communicate and protect their interests. Once the retainer has ended, your duties cease, save for those of confidentiality. It is therefore essential that you know whether a retainer remains live or has come to an end.
Where a retainer is intended to terminate, this should usually be confirmed to the client in writing, together with any appropriate warnings regarding outstanding deadlines, limitation periods, future steps or the need to seek alternative legal advice.
4.4.8.1 Termination by completion of work
When you have completed the work for which you were instructed and no further work is required, you should write to the client confirming that the retainer has come to an end. Your closing note to the client should address the following matters:
Then tidy up the file for archiving either there and then or when you have time a little later.
4.4.8.2 Termination by the client
When the client terminates your retainer, you should consider if this is odd and an indicator of a potential risk, complaint or claim. If it is, then you must contact the General Counsel you can also contact the General Counsel if you'd like to discuss any element of the termination notice.
Once the retainer has been terminated, you must stop acting for the client immediately. Your warrant of authority to act ceases upon termination and you must not take any substantive step on the client's behalf. If there are matters which you believe need urgently to be addressed, then you should discuss to what extent you can address them with the General Counsel. Applying to come off the court record is something you should do after termination, as is letting colleagues, the other side, experts, counsel and all relevant others know, especially if that stops additional fees being incurred. There may be other similar items where good practice or professional duty requires you to act. That though is the limit of what you can do with authority. It would be possible to agree a new retainer, and then to act under that, but that can only be done once you have established there is nothing of concern in the client's rationale for termination. You may charge the client for these reasonably necessary steps taken after the notice of termination.
You should consider if there are steps you should take as part of risk mitigation, for example telling the client to instruct new lawyers and warning them of the next steps they must take and the risks that may follow if they do not. Unfortunately, this is not chargeable work.
You will of course need to issue your bill and close down your file, in the usual way.
Where you are on the court record and a hearing is imminent, you must ask the client or their new lawyers to file a Notice of Acting without delay. If they do not, then you will need to apply to come off the Court record urgently. If time is too short even for this, then you will most likely have to attend court without instructions and explain the situation to the judge. You should discuss this in advance with the General Counsel. This is considered in the following section as well and detailed guidance is included there.
For completeness, the insolvency of a client or their death also terminates the retainer and is analogous to a client termination.
4.4.8.3 Termination by you
There will be times when you need to cease acting for a client. The SRA's guidance on the termination of retainers is available here and should be read alongside this section. The guidance emphasises that termination of a retainer is primarily governed by the common law and that solicitors must carefully consider both the legal basis for termination and the steps required to mitigate any resulting prejudice to the client.
Multiple affected fee earners
While terminating a retainer with a client 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, during 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.
Involvement of the General Counsel
If there is a foreseeable risk of a client complaint, a negligence claim, an allegation of professional misconduct, a regulatory issue, or if you have any concerns whatsoever about terminating the retainer, you must consult the General Counsel before taking any steps to cease acting.
Termination of a retainer is often more complex than it first appears. Any decision to terminate a retainer must itself be lawful. In particular, care should be taken to ensure that the decision is not influenced by any protected characteristic of the client and that it complies with the Equality Act 2010 and the firm's equality and diversity obligations. If not handled properly, termination can expose the firm to complaints, negligence claims, wasted costs orders and regulatory scrutiny. Care must therefore be taken to ensure that any termination is lawful, professionally appropriate, properly documented and does not prejudice the client's position.
The regulatory framework
The Code does not contain the detailed guidance on terminations of retainers that appeared in earlier versions of the Code. However, the principles underlying that guidance remain useful when considering whether it is appropriate to cease acting for a client.
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:
"Ceasing to act
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, as follows:
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, maintain public trust and confidence in the profession, and comply with the firm's contractual obligations. 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".
Considering whether you should cease to act
For help in deciding if you can no longer act, you are encouraged to discuss the matter with 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 may have will be lost when you are no longer acting. If there is some choice as to timing (e.g. where terminating for non-payment), then it's worth considering when to serve a notice. Where you are compelled to terminate (e.g. on account of a conflict of interest), then there may be little scope to pick a suitable time.
The process: telling the client and giving reasonable notice
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 in any suspension letter what will cause you to recommence your instructions 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 here, although you should amend the letter as appropriate to ensure that the reasons for termination and its consequences are communicated in a manner that the particular client can understand, taking into account any known vulnerabilities, disabilities, language issues or other relevant circumstances.
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 avoid this issue is to request 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. It is prudent to explain in that letter/email why the notice period being provided is reasonable in the circumstances. In most cases, that will require enough notice to enable a client a realistic opportunity to obtain alternative legal representation and to protect their position. You should also remind the client of any known imminent deadlines, hearings, limitation dates, costs liabilities, counsel's fees, funding obligations or other matters requiring urgent attention, and clearly explain the potential consequences of inaction.
You should not cease to act at a time when to do so would prejudice the client.
Duty to mitigate prejudice
Before terminating a retainer, you should consider what steps can reasonably be taken to mitigate any prejudice to the client. Depending on the circumstances, this may include assisting the client to obtain replacement solicitors, assisting successor solicitors to become acquainted with the matter, notifying relevant third parties, informing the client of impending deadlines and taking any other reasonable steps necessary to protect the client's position
Litigated matters - the Court process
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) in order to preserve privilege and confidentiality. For more information, see Re Creehouse Ltd [1983] 1 WLR 77 and other relevant cases.
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 of the Order 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.
Fee recovery
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 cannot 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.