Withers’ bid to take client money dispute to Supreme Court rejected

Withers has been refused permission to appeal to the Supreme Court a dispute brought against it over client money.

In December the appellate court ruled against Withers, finding that when determining whether client money held by a lawyer could be subject to a lien to cover legal fees, the issue was whether the money had been set aside for general purposes or for a purpose that was incompatible with a lien arising.

The ruling overturned a first-instance decision in favour of Withers handed down by Mr Justice Morgan last May (9 May 2011).

The firm found itself on the receiving end of a claim after it became tangled up in litigation between its client, Rybak, and Langbar International.

In that case Rybak had agreed to settle the claims against it for £30m. A proportion of that money was paid into the Withers client account to safeguard the cash.

Withers, which instructed Wilberforce Chambers’ Joanna Smith QC at the Court of Appeal (CoA), argued that it should be allowed to set aside £410,000 of that cash to cover the fees incurred by Rybak during the course of its dispute with Langbar.

Langbar, for which 3 Verulam Buildings’ Andrew Fletcher QC was instructed by Jones Day partner Sion Richards, argued that the money was owed to it as part of the settlement. The CoA agreed (5 December 2011).

The Supreme Court rejected the firm’s bid to take its case to the highest court because, it said, “the application does not raise an arguable point of law of general public importance which ought to be considered by the Supreme Court at this time”.

It continued that the case was a “one-off point of construction on which the Court of Appeal were correct”.