Terminating a retainer: It’s not just about having good reason

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The Solicitors Regulation Authority’s updated guidance[1] terminating a retainer is a timely reminder that ending a retainer is about far more than having good reason to cease acting. Firms must be able to demonstrate that the decision was fair, lawful and proportionate and that it was communicated in a way the client could genuinely understand.

[1] https://www.sra.org.uk/solicitors/guidance/terminating-retainer/

Vulnerability does not end when the retainer does

One of the most important features of the updated guidance is its focus on the individual client. Firms are reminded to consider vulnerability, make appropriate reasonable adjustments and comply with their obligations under the Equality Act 2010[1] when deciding whether, and how, to terminate a retainer.

Vulnerability is not limited to disability or age[2]. It may arise because a client is experiencing litigation stress, financial hardship, bereavement, domestic abuse, poor mental health, language barriers, limited literacy or is simply overwhelmed by the legal process.

For those clients, a termination letter may be only the beginning of the problem. If they do not understand why representation is ending, what deadlines remain or what they need to do next, the consequences can be serious.

Effective communication is an essential part of protecting consumers and managing professional risk.[3]

What does the guidance reinforce?

The SRA makes clear that firms should be able to demonstrate:

a legitimate and justifiable reason for terminating the retainer;
reasonable notice wherever possible;
compliance with professional obligations and the Equality Act 2010;
practical steps to minimise prejudice to the client; and
communication that reflects the client’s individual circumstances and needs.

The guidance also reminds firms that contractual termination clauses cannot override the common law. Every decision must be justifiable on a case-by-case basis.

Communication is part of compliance

The SRA’s updated guidance reflects a growing emphasis on consumer understanding rather than technical compliance alone. For vulnerable clients, adapting communication may itself be an important reasonable adjustment.

This is precisely the challenge that The Legal Lexi® was developed to address.

The Legal Lexi® is more than a plain English resource. It equips legal professionals to recognise when communication needs to change, identify indicators of vulnerability and explain complex legal issues in language clients can genuinely understand. By supporting better conversations; it helps firms improve consumer understanding, reduce avoidable complaints and evidence a client-centred approach that aligns with the SRA’s expectations.

The direction of travel is unmistakable: legal accuracy and consumer understanding must go hand in hand.

The courts are saying the same thing

These principles are reflected in Evans v Acuity Law Ltd [2025] EWHC 1661 (SCCO)[4] where the court considered allegations that a client had effectively been left without representation shortly before a hearing.

The court were able to reject that criticism because of the records the Solicitor had kept. Thus, enabling the Court to conclude that the firm had acted reasonably following persistent non-payment. That they had kept the client informed throughout the retainer and had not left them without options.

This decision reinforces the importance of documenting the reasons for termination, evidencing decision-making and demonstrating that the client’s interests were properly considered.

Practical steps for firms

The updated guidance provides a valuable opportunity to review:

engagement letters and termination clauses;
policies and procedures for ceasing to act;
template termination letters;
how vulnerability is identified and recorded;
whether reasonable adjustments are considered before terminating a retainer;
how decisions and reasons are documented; and
whether client communications are genuinely accessible, understandable and tailored to individual needs.

Terminating a retainer should never be treated as an administrative exercise. It is a professional decision with contractual, regulatory and reputational consequences.

[1] Equality Act 2010

[2] PRACTICE DIRECTION 1A – PARTICIPATION OF VULNERABLE PARTIES OR WITNESSES – Justice UK

[3] SRA Code of Conduct – 3.4 “You consider and take account of your client’s attributes, needs and circumstances” & 8.6 “You give clients information in a way they can understand. You ensure they are in a position to make informed decisions about the services they need, how their matter will be handled and the options available to them.”

[4] Evans v Acuity Law Ltd [2025] EWHC 1661 (SCCO) (20 June 2025).

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