In the context of a dispute with a lawyer, which may typically involve opposing claims: a claim against the lawyer for a failure to perform under his contract of services, for professional negligence and/or malpractice and a claim against the client for the non-payment of fees, but also in other cases, lawyers often assert a right to hold onto clients’ documentation.
This typically forces the hand of the client, who may often be more concerned to proceed with his plans (and necessarily, make use of his documents) than to dispute the lawyer’s fee claims. Would clients be less amenable if they realise that such assertions by lawyers are on thinner ice in Bulgaria than they may be elsewhere?
Unlike other legal systems (eg, the rights that English solicitors may be able to exercise), Bulgarian law does not envisage the possibility of a lien by an advocate.
On the contrary, there is an express statutory obligation on advocates to return to his or her client his or her original documents, after the end of an instruction (art. 47 (1) Bulgarian Bar Act). General rules as to the right of lien would apply only insofar as they are strictly compatible with the provisions of the lex specialis, here, the special provisions of the Bar Act. The use of the rights of lien would thus appear to be strictly limited to certain cases and certain narrow conditions, interpreted against the proposer of a right of lien.
Bulgarian law in this area would appear to relate to the distinction between official and private documents. A lawyer may be able to withhold a contract, proxy, statement, court claim or in general a private document drafted by him- or herself on his or her client’s request, in case the client has not paid.
But at the moment this document becomes “official” – in the broadest meaning of this word, namely the contract, proxy, etc. is certified by a Notary, a draft statement of claim is filed at court, the lawyer would not have the right to refuse to hand over the document to the client. The one area where a right of lien may remain as a residual right would relate to the drafts of official documents – notary deeds, writs of execution, freezing injunction order, notary certified agreement or declaration or to documents which are otherwise entirely private but would never extend to “official” documents.
Stopping the improper use of insolvency proceedings
A client of our dispute resolution team (led by Kamen Shoylev and Yordan Neshkov) was recently the subject of an indirect claim by a Bulgarian bank with which this client has been engaged in a multi-stage dispute. Unusually, the bank acted through a vehicle registered in an African state, which made an unfounded claim in the tens of millions of euros against our client and sought the commencement of judicial insolvency proceedings against this client. The offshore vehicle was chosen to isolate the bank from liability and create certain evidential difficulties for our client's representation.
NBLO succeeded in terminating the insolvency proceedings, with direct loss fully awarded to our client. A second claim to recover our client's indirect losses is currently under way.
Where targeted in this way through insolvency proceedings, a company may be prevented from trading properly (e.g., by suffering restrictions on its financing or being unable to participate in public procurement).
Through our considerable experience in insolvency litigation, both entirely domestic and where there are European and cross-border elements, we are ideally placed to assist clients in resisting such attacks and recovering the real and considerable losses that may be suffered.
© New Balkans Law Office 2019