Costs of a solicitor’s negligence claim which bombed only on causation; costs of the successful solicitor’s unsuccessful proportionate liability defence

In King v Benecke [2014] NSWSC 957, Mr King alleged that his solicitor was negligent.  The solicitor denied everything and lost on all but one issue, namely causation, with the result that the solicitor got judgment and Mr King only Pyrrhic victories.

Mr King argued he should not have to pay all of the solicitor’s costs.  Rather, he argued, he should have his costs of the issues on which he succeeded (duty, breach, the proportionate liability defence), which took up most of the case.

Harrison J only acceded to that argument in one respect.  The solicitor had alleged that Mr King’s solicitors in the professional negligence suit were themselves concurrent wrongdoers against whom some of any liability which might be established against him ought to be apportioned under the proportionate liability regime.  The consequence was that Mr King had to get new solicitors, the plea having put the old ones into a position of conflict between self-interest and duty to Mr King.

The solicitor never adduced any evidence in support of the proportionate liability defence.  His Honour found that Mr King should have his costs of and incidental to it, but otherwise pay the solicitor’s costs of the entire proceeding:

’25 On the discrete issue of Mr Benecke’s proportionate liability defence, Mr King’s written submissions traced the evidentiary background to this issue in great detail. It is presently unnecessary to repeat that material here. Mr King submitted that he should have the costs of this issue, whatever else I may decide with respect to his application as a whole.

 26 One of my conclusions on the proportionate liability issue was that as a direct result of being nominated as concurrent wrongdoers, Mr King’s former solicitors and counsel were confronted with an apparent conflict of interest that prevented them from continuing to appear for him. Mr King was therefore forced to retain alternative representation. That caused significant cost, disruption and delay. I referred to this at [726] as follows:

“[726] Those allegations were first pleaded in September 2011, more than two years after the proceedings were commenced. Cheney & Wilson and Mr Kerr were at that time acting for him in relation to these proceedings. As a direct result of being named as concurrent wrongdoers by the defendants, Cheney & Wilson and Mr Kerr were prevented by reason of a conflict of interest from continuing to act. George King was forced to engage new legal representation, causing significant cost, disruption and delay.”

 27 I disposed of Mr Benecke’s contentions at [731]:

“[731] George King’s submissions on this issue are unanswerable. Mr Benecke’s contention that George King’s lawyers were somehow at fault fail for a complete want of supporting evidence.”

 28 Mr King contended that the proportionate liability allegations were discrete and separable. He succeeded on that issue. Mr King submitted that he should have his costs of defending these allegations as they were never supported by evidence and should never have formed any part of the proceedings. He insisted that such a result should follow whatever the ultimate fate of his costs application generally.

57 The issue concerning the proportionate liability defence is more difficult. On balance I consider that Mr Benecke’s failure to lead any evidence in support of the defence indicates that it was always destined to fail. I appreciate that Mr Benecke says that evidence to support it was both difficult to acquire in the first place and only ever likely to emerge, if ever, in the course of the trial in the second place. However, that seems to me to be a forensic risk that necessarily falls at his feet. It was a separate and severable issue upon which Mr Benecke failed and he took the chance that Mr King would be required to incur legal costs to respond to it. In the events that occurred, Mr King’s costs were also significantly increased by the consequent disruption to his preparation occasioned by the need to retain and instruct an entirely different legal team.

58 In the circumstances I consider that Mr Benecke should pay Mr King’s costs of and incidental to that issue.’

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