Solicitors’ Undertakings

Nature of Undertaking

A solicitor’s undertaking is a promise by a solicitor or somebody on his behalf to or refrain from doing something.  It gives rise to personal liability for the solicitor.  It is enforceable as a disciplinary matter.  It subsists until released expressly or impliedly by its beneficiary.

Undertakings are frequently given in property transactions particularly in relation to the redemption of financial charges.  This facilitates the redemption of charges after the purchase of properties thereby facilitating a conveyancing transaction.  Undertakings are given in a broad range of other contexts.

Financial undertakings have caused particular concern and are now restricted to non-commercial property, by Law Society disciplinary regulation.  In the financial crisis, it was found that some solicitors had failed to honour undertakings in relation to mortgages. matter. A small number of multiple fraudulent undertakings were uncovered.

Nature of Obligation

An undertaking imposes a personal obligation on the solicitor. An undertaking is not equivalent to a contractual promise.  Consideration is not generally required.   Failure to comply is inherently misconduct under disciplinary provisions. An undertaking is enforceable under disciplinary jurisdiction.

The subject matter of an undertaking may also be contractual.  In order to have a contractual basis and be also enforceable as such, there must be consideration. The general principles of contract law apply.

An undertaking binds a solicitor even after he leaves practice or the practice becomes dissolved.A principal solicitor is responsible for undertakings given by his employees.  Undertakings given by the solicitor are enforceable against the firm by whom he is employed.

All partners are responsible for compliance with the undertaking. Undertakings given in the course of the partnership would be binding on other partners.

Equitable Charge

A solicitor’s undertaking may create an equitable charge..  It may constitute an agreement to assign a particular fund of monies, by way of charge In the case of a corporate, such charges should be registered in the companies registration office as such.

An equitable charge may clearly arise in the cases where an undertaking is given to create a charge over a property, as in the standard solicitor certificate of a title given with authority.

Where the undertaking relates to payment of monies from a particular fund, for example, the net proceeds of sale or compensation, there may or may not be sufficient language to create a charge.

Consideration will be required to create the charge over the client’s assets.  There must be a sufficiently identifiable fund.  A general obligation to pay a sum in the future would not generally constitute an equitable assignment.

Enforcement

An undertaking is usually unconditionally enforceable. Breach of the undertaking is a personal liability of the solicitor. Undertakings may be enforced on application to the High Court in legal action or by way of disciplinary complaint to the Law Society.  There is no time limit on the inherent powers of the court to enforce. An equitable release may arise where there has been an unjustifiable delay in enforcement.

Failure to comply with an undertaking may be the subject of a direct complaint to the Law Society for professional misconduct.  See separately the section on discipline and sanctions against solicitors.

In civil proceedings to enforce an undertaking, the normal defences to contractual enforcement may be employed.  Consideration will be required.There may be defences to the enforcement of an undertaking analogous to those in contract, in limited cases.  Where the undertaking was given due to fraud, duress misrepresentation on the part of the recipient, the solicitor may be relieved of the undertaking.

Summary Enforcement

There is a procedure for enforcement of an undertaking is by way of summary procedure.  The court has jurisdiction to award compensation.  In a number of cases involving failures of financial undertakings, the courts awarded compensation by way of full reimbursement of the payments undertaken to be made,. where the breach was particularly serious.

The court’s summary disciplinary jurisdiction is not just compensatory but is based on the need to keep the system uphold the integrity of the systems of solicitors. Undertakings The court will not make an order in vain. However, cases have also held that compensation will be granted only where the behaviour is inexcusable or egregious.

The civil right to sue for enforcement will still remain.  The amount awarded should not exceed the amount necessary to compensate the client for breach of undertaking.

Breach of an undertaking may be treated as contempt of court.  The solicitor may be committed for deliberate non-performance.