Differentiate “retaining lien” from “charging lien.” (5%)
Suggested answer only. Not an official answer and not legal advice.
A retaining lien is a passive general lien on a client's papers and funds in a lawyer's possession, whereas a charging lien is an active special lien on a client's favorable money judgment.
Under Rule 138, Section 37 of the Rules of Court and the CPRA, a retaining lien permits a lawyer to retain a client's documents and funds lawfully possessed until fees are paid. A charging lien attaches to all money judgments and executions secured for the client once recorded with notice.
They differ in nature, basis, and scope: retaining liens are passive, require possession, and need no court notice. Charging liens are active, require a favorable money judgment, and require formal recording with notice to parties.
Therefore, retaining liens depend on possessing client property, while charging liens depend on securing money judgments.
This is not an official scoring system and carries no weight with the Supreme Court or any bar review provider. It measures how much of the suggested answer's wording your response covers, not whether your reasoning is correct. For practice only.
Quick check
What is the nature of an attorney's retaining lien under Rule 138, Section 37 of the Rules of Court?
A retaining lien is a passive general lien that depends on lawful physical possession of the client's documents and funds.
What is a mandatory requirement for an attorney's charging lien to take effect against adverse parties?
A charging lien must be formally entered upon the court records with written notice served to the client and adverse party.
To what property or asset does an attorney's charging lien attach?
A charging lien attaches specifically to favorable money judgments and executions secured for the client.
How does a retaining lien differ from a charging lien regarding the necessity of physical possession?
A retaining lien relies on physical possession of client property, while a charging lien attaches to money judgments without needing possession.
Can an attorney actively enforce a retaining lien by selling the client's documents at public auction?
A retaining lien is purely passive and gives the attorney only the right to retain possession, not to sell or execute upon the property.
Learn more about these topics
1. Retaining Lien Nature
Under Rule 138, Section 37 of the Rules of Court and the Code of Professional Responsibility and Accountability, a retaining lien is a passive, general lien. It entitles an attorney to retain physical possession of all documents, papers, funds, and property belonging to the client that lawfully came into the lawyer's possession in a professional capacity until all lawful fees and disbursements are paid. A retaining lien takes effect from the moment lawful possession is established and does not require court recording or formal notice to adverse parties to be enforceable.
2. Charging Lien Requisites
A charging lien is an active, special lien that attaches to all judgments for the payment of money, and executions issued in pursuance of such judgments, rendered in favor of the client. Unlike a retaining lien, a charging lien does not depend on physical possession of client papers or funds. To be effective against third parties and the judgment debtor, a charging lien must be formally entered upon the records of the trial court with written notice served upon both the client and the adverse party.
3. Legal Lien Distinctions
The fundamental distinctions between retaining and charging liens lie in their scope, prerequisites, and enforcement mechanisms. A retaining lien is passive, applies to general client property in the lawyer's possession, and cannot be actively enforced through execution. Conversely, a charging lien is active, limited strictly to favorable monetary judgments or executions secured by the lawyer's services, and enables the attorney to seek execution against the judgment proceeds directly to satisfy unpaid professional fees.