Ethics Ruling Number
R5017
Area of Law
Personal injury
Category
Solicitor's lien
Ethics Ruling Date
20/04/2023
Ethics Pub Date
18/09/2025
Ethics Background
Law Practice C sought guidance from the Ethics Committee regarding the course they should adopt regarding the withholding of client settlements funds in their trust account as a result of two former firms purporting to exert a lien over the funds. In brief, the client engaged Law Practice A to act on their behalf in relation to a serious injury application and a superannuation claim. After the Originating Motion had been issued, the client terminated the retainer with Law Practice A and sought to engage Law Practice B. The client had incurred legal costs and disbursements with both Law Practice A and Law Practice B and both firms sought to recoup their costs. The client declined to instruct Law Practice C to release the funds. Law Practice C advised their client to engage a costs lawyer to settle the costs disputes as a matter of priority. They have retained a sum of money in their trust account out of the client’s settlement funds in contemplation of a resolution of these matters.
Ruling
Subject to the monies in trust not involving any Workcover claim, in the opinion of the Ethics Committee and on the information presented: 1. Law Practice C should hold sufficient money in their trust account to satisfy the liens claimed pending any agreement, or court order. 2. Law Practice C should hold the funds in their trust account until such time as the costs issue has been resolved, and the equitable/fruits of litigation liens have been discharged, either by agreement or court order. 3. Law Practice C could apply to the court for the court to hold the money on an interpleader pending resolution of the issues or any court order.

Law Institute of Victoria
Ethics Committee of Law Institute of Victoria Ltd
Legal Ethics Manager
Phone: 03 9607 9336
Email: ethics@liv.asn.au

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