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Latest on whether barrister-litigants can recover legal fees for their own work

May 8th, 2014 · No Comments

The award of costs is by way of an indemnity — usually only a partial indemnity — against out of pocket expenses and the cost of legal services reasonably incurred in litigation.  Except in no-costs jurisdictions, everyone can usually recover their out of pocket expenses, but only those who incur a liability for fees charged by lawyers can claim costs other than for out of pocket expenses.  Because solicitors are so special, though, where they act for themselves, they can recover costs other than out of pocket expenses even though there is nothing but their own effort for the indemnity to indemnify against.  Whether barristers in the same situation can avail themselves of the same exception to the general rule seems not to be entirely clear.

The question arose in Ada Evans Chambers P/L v Santisi [2014] NSWSC 538.  A Magistrate had allowed a barrister to avail himself of the exception.  The Supreme Court considered that the question of whether barristers are entitled to costs of acting for themselves was an important one, but declined to grant leave to appeal the Magistrate’s decision in this regard because the dispute was an inappropriate vehicle for the determination of that question.  Very interestingly to my mind, a principal reason for not granting leave was that the costs of arguing it were disproportionate to the amount in issue in the case.  Nevertheless, the Court gathered together the authorities on the question:

’23. The Magistrate’s finding as to Mr Santisi’s role is set out in the reasons above. His Honour’s consideration of the law that applied was set out in a separate note of reasons that was provided to the parties on 18 December 2013. His Honour set out in the note (which I admitted and marked Exhibit C) his reasons for considering that there was no basis to exclude barristers from the exception that applies to solicitors who act for themselves. The note of reasons concluded as follows:

My view is that the authorities are very clear that there is an exception to the rule against self-represented litigants recovering fees for acting for themselves. It is an exception which relies on the fact that (in times gone by only solicitors, but now counsel as well) their fees can be quantified, and that if they were not permitted to recover such fees they would simply retain another lawyer and recover them that way. To read the rule as applying to counsel is not so much to “extend it”, as Mr. Freeman argues, but to recognize its underlying rationale as applying to any variety of lawyer, whether counsel and solicitor. With respect, I disagree with the inter-State decisions cited by Mr. Freeman. Those cases seem to me to be more in the nature of passing remarks cautioning against extending the rule to counsel, and with great respect, not to be at all well-based.

  1. It was on this basis that the costs order was made. The Chambers argued before me that this was erroneous in law, or that it involved a mixed question of fact and law. Mr Freeman submitted that it was erroneous for costs to be allowed for barristers appearing in their own causes, although he accepted that there was an exception for solicitors.
  1. Mr Burchett relied on the decision of Bergin J in Farkas v Northcity Financial Services Pty Limited [2006] NSWSC 1036, in which the question arose whether a litigant was entitled to interest on costs that related to work he performed as junior counsel in the case. The Costs Assessor had already determined that the litigant was entitled to such fees, as appears from the following reasons given by the Costs Assessor which are extracted in the judgment:

“The litigant in this matter is a barrister and it is submitted that much of the work undertaken by the litigant was work undertaken by a solicitor and therefore offends some of the New South Wales Barrister’s Rules. It is fair to say that the distinction between barristers and solicitors in this day is considerably less than before, and indeed it is acceptable, although unusual, for barristers to accept a brief direct from the public without the intervention of a solicitor. Both barristers and solicitors are legal practitioners under the Act. It is the style under which they seek to practice under different practice rules which sets them apart.

I have carefully considered the submissions from the Costs Applicant and the Costs Respondent on this aspect of the assessment. I have determined that the Costs Applicant is entitled to costs for the work undertaken by him as a junior counsel.”

  1. Although Bergin J was only required to decide whether interest under s 101 of the Civil Procedure Act ought be awarded, and not whether it was appropriate that such costs be allowed at all, it appears from her Honour’s judgment that her Honour accepted the appropriateness of the Costs Assessor’s decision to allow the costs of a barrister who appeared in his own cause. The relevant cases on recoverability of costs by a legal practitioner were summarised by Basten JA in Wang v Farkas [2014] NSWCA 29. However, that case turned on the construction of the Criminal Procedure Act 1986 (NSW) which, by s 215 conferred power to order “professional costs”, which was defined to mean “costs . . . relating to professional expenses and disbursements”, and was held to exclude the valuation of time devoted by a litigant, even if a legal practitioner, to his or her own legal proceedings.
  1. Mr Burchett relied on the cases referred to above, as well as Soia v Bennett [2014] WASCA 27, which summarised the law in various jurisdictions in Australia.
  1. Mr Freeman relied on Winn v Garland Hawthorn Brahe [2007] VSC 360 in which Kaye J was not prepared to extend the Chorley exception to barrister’s fees. Mr Freeman also relied on Murphy v Legal Services Commissioner (No. 2) [2013] QSC 253, in which Daubney J was not prepared to extend the ambit of the Chorley exception (named after London Scottish Benefit Society v Chorley, Crawford & Chester (1984) 13 QBD 872) to barristers in the absence of clear authority.
  1. In the instant case, the Magistrate was referred to relevant authority having heard full argument on the question. His Honour considered it to be material that there were solicitors on the record, as his reasons disclose. I consider that, at best, the question that arises is one of mixed law and fact. It also concerns costs and therefore leave is required on two bases. In my view, leave, if sought, ought not be granted in the instant case to argue this ground. This is not to say that the question whether a legal practitioner who is a barrister is entitled to costs when also a litigant is not an important one. However, I consider that it was open to the Magistrate to exercise his discretion to allow the costs associated with the work Mr Santisi did. The distinction between solicitors and barristers has become less important in circumstances where all legal practitioners are admitted as such. Furthermore I do not consider that, even given the importance of the point, it would be desirable for it to be determined by this Court in the instant case where the costs of so doing are already grossly disproportionate to the amount originally in issue in the proceedings.’

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Tags: Party party costs