Undertakings – a difficult undertaking?

Published 30 July 2021

The Supreme Court has provided some guidance as to the limits of solicitors’ undertakings. We look at what this means in practice.

In the case of Harcus Sinclair LLP v Your Lawyers Ltd [2021] UKSC 32, the Court was asked to consider whether a non-compete undertaking given by one law firm to another could also be classed as a solicitor’s undertaking. If so, the Court was asked to decide whether that solicitor’s undertaking could be enforced against an incorporated body, such as an LLP.

In their unanimous Judgment, the Supreme Court gave some helpful guidance to assist in establishing when an undertaking has the formal status of a solicitor’s undertaking. There are two elements to the test:-

(i)       Is the undertaking, and what the undertaking requires the solicitor to do (or not do), something which solicitors regularly do (or refrain from doing) as part of their ordinary professional practice?

(ii)      Does the reason for giving the undertaking, and the cause or matter to which it relates, involve the sort of work which solicitors regularly carry out as part of their ordinary professional practice?

It is only if the answer to both of these questions is ‘yes’, that the undertaking is likely to be classed as a “solicitor’s undertaking”.

The unifying factor, therefore, appears to be that the undertaking is given to protect a client’s interests, rather than those of the firm. This outcome appears to us to be sensible, and corresponds with what most practitioners would consider to be an essential element of a solicitor’s undertaking.

Even though it was not necessary for the Court to consider the undertaking on the facts of the particular case, since the Court held that no solicitor’s undertaking had been given, it did address the question of enforceability. In particular, the Court considered whether its supervisory jurisdiction over solicitors would apply to undertakings given by incorporated entities, such as law firms who are LLPs and limited companies.

Whilst the Court recognised the many benefits of finding that undertakings given by such firms, as opposed to individuals, would invoke the Court’s supervisory jurisdiction, it reluctantly concluded that this case did not provide the “appropriate occasion” for making a decision on that issue. It confirmed, however, that undertakings provided by incorporated bodies could not at present properly be classed as solicitor’s undertakings. Similarly, an undertaking given by a solicitor who is a partner in an LLP or by a director of a limited company would not be a solicitor’s undertaking, because that solicitor would only bind the company or the LLP and not its members/directors.

The critical issue is that an undertaking must be given by, or bind, an officer of the Court. As matters stand, that can only be an individual solicitor and not an incorporated body. In consequence, an undertaking given by a partner in an unincorporated practice would bind the partners and would, therefore, be classed as a solicitor’s undertaking.

This is a significant decision, particularly for conveyancers. The conveyancing process relies heavily on solicitor’s undertakings and their enforceability. Practitioners should now consider the status of the firm with which they are dealing. If that firm is incorporated then they should ask for the undertaking to be given by a solicitor personally. We predict that this will cause nervousness and delay. The law in this area has not been considered since before solicitors could operate as part of incorporated entities, and accordingly urgent reform is needed. A failure to appreciate the potential limits of undertakings could, in the meantime, lead to claims and firms will wish to review whether they allow any non-partner solicitors to give undertakings in the meantime if they could risk personal liability by doing so.