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29 September 2021
Supreme Court Discusses Undertakings Given by Incorporated Law Firms and Interests Protectable by Restraints of Trade

Civil practitioners will be well aware of the court’s important power to enforce solicitors’ undertakings summarily. Such undertakings are given in a wide range of situations but particularly conveyancing and litigation. Solicitors are held to the highest standards of professional conduct because they are officers of the court.

Rapid summary enforcement of solicitors’ undertakings underpins, for example, modern domestic conveyancing. In a chain of transactions all completing at the same time there will be interlocking undertakings from a significant number of different firms.

For some years solicitors’ services have also been provided by limited liability partnerships and companies whose owners and managers may not be solicitors. Are such alternative business structures ever subject to the court’s useful summary jurisdiction? The Court of Appeal in Assaubayev v Michael Wilson & Partners Ltd [2014] EWCA Civ 1491 thought not.

The issue was revisited recently in Harcus Sinclair LLP v Yours Lawyers Ltd [2021] UKSC 32.

The Supreme Court held that Assaubayev was not a binding precedent against extending the summary jurisdiction to incorporated law firms that provided the legal services formerly supplied only by solicitors. However, with considerable reluctance, the Court decided this was not the case in which to do so: its views would only be obiter dicta, it had not had the benefit of submissions from the relevant professional and regulatory bodies and Parliament was probably better placed to decide such matters.

The Supreme Court expressed the hope that Parliament would address the lacuna and pointed out that ensuring that a relevant undertaking was given personally by a solicitor, as well as, or in the alternative to, their incorporated law firm may not always be a satisfactory solution where summary enforcement is sought, if the individual solicitor lacks the power within the law firm to ensure that compliance occurs.

Some key points that emerge from the decision:

  • A promise by a solicitor will not generally be subject to summary enforcement unless it involves the sort of work which solicitors undertake as part of their ordinary professional practice.
  • Under agency principles, where an undertaking is given by a solicitor expressly on behalf of an incorporated law firm, it is not enforceable summarily against the solicitor personally.
  • Contractual promises and solicitors’ undertakings are not considered differently under the doctrine of restraint of trade.
  • When assessing the legitimate interests that may be protected by a non-competition clause the court can consider what at the time of the contract the parties objectively contemplated or intended even if such matters were not the subject of any legal obligation.

The last point is the ratio of the case and breaks significant new ground.

Harcus Sinclair had agreed not to accept instructions from other clients in the VW emissions group litigation for 6 years in exchange for Your Lawyers’ provision of confidential information about clients and progress to date. The parties contemplated that they would subsequently cooperate in taking the group litigation forward but neither was contractually obliged to do so. The Supreme Court found the restraint was enforceable, overturning the Court of Appeal’s decision that had been based on the view that non-contractual expectations were not protectable. The promise was enforceable but only in contract. Even if it had been a solicitor’s undertaking it would not have been enforceable as such against either the solicitor who signed it or the LLP on whose behalf he expressly did so.

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Stephen Beresford

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