Ethics Opinion

Opinion No. 76-24

December 1976

Summary: Whether a retaining or possessory lien on a client's books and papers, the purpose of which is to secure payment of legal fees and expenses, exists in Massachusetts is beyond the jurisdiction of this committee, since it is a question of law which should be submitted to the courts for determination.

Facts: Attorney A entered into a contingent fee agreement with a client, brought suit on behalf of the client, and undertook discovery proceedings. The client later discharged Attorney A and retained Attorney B, who entered his appearance on behalf of the client.

Both the client and Attorney B have requested that Attorney A turn over to successor counsel A's file, which contains the pleadings, discovery information, and, presumably, correspondence and other material relating to the client's case. A has refused to relinquish control of the file, and insists upon retaining the file until the client reimburses him for expenses and pays him for services rendered up to the time he was discharged.

We are asked whether A's actions in retaining the file under these circumstances constitute unethical conduct.

Discussion: Essentially, the issue presented is whether in Massachusetts an attorney who has rendered services to a client has a retaining or possessory lien on a client's papers or file until the attorney has been paid expenses and the reasonable value of his/her services. The question is one of substantive law on which this committee may not state its views, and not one of ethics. See ABA Formal Opinion 209 (1940), to this effect.

We do deem it appropriate to make reference to the law in the area of attorney's liens, and the ethical guidelines involved. There are two types of attorneys' liens to secure payment of expenses and fees that have been recognized in this country. The first is the "charging lien" which (as provided in G.L. c.221, S50) attaches "after authorized commencement of action" upon the proceeds of any judgment in favor of the client. This lien is for reasonable fees and expenses with regard to the action involved, and may be determined and enforced upon petition to the court where the action is pending. Torphy v. Reder, 357 Mass. 153 (1970).

The second type of lien, the retaining or possessory lien, has its origins in the common law. By virtue of the lien, an attorney may hold the records and papers of the client until the attorney's services have been paid for. See 10 Williston, A Treatise on the Law of Contracts, S1285B (3l1 ed. 1967); Restatement of Agency 2d (1958) S464(a) and Note, Attorney's Lien on Former client's Papers, 65 Colum. L. Rev. 296-309 (1965). Our Supreme Judicial Court has never squarely recognized the existence of a common law retaining lien in Massachusetts, Torphy v. Reder, supra at 156 and cases cited, and it is therefore questionable whether one exists.

Attention should also be called to G.L. c.255, S32, which states that certain liens, including liens "by attorneys at law upon books, papers, documents or other personal property," may be dissolved as provided in S33, by giving a bond. It is still unclear whether, by this statute, the legislature has created an attorney's retaining lien in Massachusetts. See Torphy v. Reder, supra at 156.

Even in jurisdictions which do recognize the attorney's retaining lien, it has been held in some states that the attorney may be compelled to produce the records and papers if they are required for impending litigation, the attorney has unjustifiably withdrawn from the case or the client is impecunious, or is charged with a serious crime. See Note, 65 Colum. L. Rev. 296-309, supra, and Wentworth, Attorney's Lien--A Survey and a Proposal, 35 Conn. B.J. 191(1961).

Recently, in two jurisdictions, the existence of the attorney's retaining lien has been denied, or it has been made ineffective. Academy of California Optometrists, Inc. v. Superior Court, 51 Cal. App 3d 999, 124 Cal. Rptr. 668 (Ct. App. 1975), invalidated a contractual retaining lien on the ground that an attorney who is discharged must act in a way to minimize the possibility of prejudice to the client, analogizing from DR 2-110(A) and EC 2-32, which require that an attorney who withdraws from a case act in a way to avoid prejudice to the client. Opinion No. 39 of the Maine Bar Association Professional Ethics Committee stated:

It is therefore our opinion that whether or not an attorney's lien on the client's file existed at common law, the discharged attorney may not ethically refuse to turn over the file of his former client. He may, of course, reproduce for his files any legal memoranda or other materials which might prove useful in other cases.
There are few references in the Disciplinary Rules to attorneys' retaining liens. DR 5-103(A)(1) permits a lawyer "to acquire a lien granted by law to secure his fee or expenses." DR 2-110(A)(2) provides that "a lawyer shall not withdraw from employment until he has taken reasonable steps to avoid foreseeable prejudice to the rights of his client, including ... delivering to the client all papers and property to which the client is entitled." But these disciplinary rules have been held not to preclude the first attorney from having any controversy as to the existence of a retaining lien, and the amount due him, determined by the courts, unless the assertion of the lien is deemed made in bad faith in order to overreach the client and force payment of a flagrant overcharge. See ABA Formal Opinion 209, supra, and Academy of California Optometrists, Inc. v. Superior Court, supra. Assuming the good faith of Attorney A's assertion of a retaining lien, we therefore conclude (as did ABA Opinion 209, supra) that "no ethical question is involved in such a controversy."

There are a number of legal remedies available to Attorney B in this situation. If the client is willing and able to do so, a lien may be dissolved by giving a bond, as provided in G.L. c.255, S33. The existence and extent of the lien may be tested by order or subpoena duces tecum in the trial court addressed to Attorney A, as in Brauer v. Hotel Associates, Inc. 40 N.J. 415, 192 A. 2d 83 (1963). An adverse decision by the court below may be tested by petition for mandamus in the intermediate appellate court, as in Academy of California Optometrists, Inc v. Superior Court, supra.

Permission to publish granted by the Board of Delegates, 1976. As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without official governmental status.