When a file is transferred from one solicitor to another, it is quite common for the second solicitor to give an undertaking to the first solicitor in respect of the payment of the first solicitor’s costs and outlays.

However, a matter that is often overlooked is that a problem will arise if the client does not stay with the second solicitor. Accordingly, these undertakings should be qualified to allow for this eventuality.

In addition, the undertaking should only be given if it is clear that sufficient monies will be coming into the solicitor’s control to pay the first solicitor’s costs. The undertaking should be qualified to take account of this.

In summary, the undertaking should be qualified in two ways:

• To say that it is conditional on the second solicitor not being discharged by the client,
  
• To say that it is conditional on sufficient monies coming into the solicitor’s control to pay the costs.

It would also be prudent to ensure that the client’s retainer and authority to give the undertaking is comprehensive. The following wording (also used in the Law Society’s precedent residential mortgage lending solicitor’s undertaking) could be included:

Client(s) retainer and authority

“…and in consideration of your giving the foregoing undertaking, I/we hereby undertake that I/we will not discharge your retainer as my/our solicitor(s) in connection with the foregoing matter unless and until I/we have procured from the recipient of the undertaking your effective release from the obligations imposed by such undertaking and I/we hereby indemnify you and all your partners and your and their executors, administrators and assigns against any loss arising from my/our act or default.”