Judge puts solicitors’ negligence case on ice pending outcome of High Court challenge to advocates’ immunity

In Cairncross v Anderson [2016] NSWSC 258, Justice Button was asked to summarily dismiss a negligence claim against a solicitor on the basis that it was doomed to fail by virtue of the solicitors having taken the defence of advocates’ immunity.  The negligence is said to have arisen in the course of the Great Southern proceedings in the Supreme Court of Victoria.   In the course of the decision which the Court made yesterday to put the strike-out motion on ice, part-heard pending the High Court’s judgment, the judge had to assess the likelihood of the law changing.  This is what he said:

  1. First, a reading of the transcript of the special leave hearing establishes that (to use a phrase that I used in discussion with the parties at the hearing) there is a “reasonable circumstantial case” that the High Court will undertake a “root and branch” reconsideration of the immunity.
  2. Secondly, the parties respectfully predicted that the hearing of the appeal in the High Court would take place in March 2016, and that one might expect a judgment some months after that. Indeed, as at today the hearing in that Court has concluded, and one may respectfully expect a judgment shortly.
  3. In other words, I think it quite possible that the fundamental legal principles that underpinned the motion placed before me could be subject of significant revision by the ultimate court of this nation within three months or so, and within six months of the hearing of the motion.

I certainly hope that the immunity is abolished or greatly reduced in scope.  I am sick of charging people with good cases against litigation lawyers money to tell them that they should not sue, or that if they choose to sue there is a risk that their claim will be struck out with costs.

Just the other day, the Supreme Court of Victoria ruled that a solicitor who failed to tell his client the trial date, failed to prepare any evidence or arguments, failed to brief counsel to appear, and failed to turn up, so that the case proceeded undefended, unbeknown to the client, and the client lost catastrophically, was protected by the immunity in respect of that conduct.  The immunity has been held to extend to intentional torts, fraudulent conduct, and a failure to tell a client about a settlement offer which went unaccepted and turned out to be a lot better than the result obtained at trial.

Advocates’ immunity summarily defeats claim alleging negligent advice to settle

I once spent a long time writing an article called ‘Compromise of litigation and lawyers’ liability: Forensic immunity, litigation estoppels, the rule against collateral attack, confidentiality and the modified duty of care’ which was published in the Torts Law Journal when it was edited by Professor Luntz ((2002) 10 TLJ 167), and I acted for the Victorian Bar in relation to D’Orta-Ekenaike v Victoria Legal Aid and instructed in the hearing of that case in the High Court.  So a case like Stillman v Rushbourne [2014] NSWSC 730 is fairly well up my alley.  Three key areas of uncertainty about the scope of and operation of the immunity post-D’Orta have been:

1.  Whether advice to settle which results in settlement can be said to affect the conduct of the cause and so be within the immunity;

2. Whether the immunity extends to intentional wrongs; and

3. When it is appropriate to grant summary judgment by reference to the immunity.

Relatively recently, those issues have become relatively authoritatively resolved in favour of lawyers.  In Stillman, Davies J summarily dismissed a claim against solicitors that they negligently advised settlement and intentionally and wrongfully coerced the plaintiff into settling.  The various authorities on these questions are usefully rehearsed and consolidated by his Honour, making this judgment a useful one-stop shop on these issues.

In relation to allegations of intentional wrongdoing, see also Young v Hones (No.2) [2013] NSWSC 1429.  As to the desirability of dealing with an advocates’ immunity defence at an early stage, including in a summary judgment application, see also Donnellan v Woodland [2012] NSWCA 433, a decision of a bench of five.

A new advocates’ immunity case

On the 6th of last month, Justice Hislop of the New South Wales Supreme Court found a professional negligence claim against a solicitor to be defeated by the defence of advocates’ immunity in Gattellaro v Spencer [2010] NSWSC 1122.  Nothing particularly exciting about the decision, but I did learn a new word: ‘cerebration’.  I looked at it and my ‘that’s not a word’ alarm began to sound.  But it is a word, meaning reasoning, thinking. His Honour summarised the law relating to advocates’ immunity as follows:

Continue reading “A new advocates’ immunity case”

Fraudster’s negligence claim against appeal counsel permanently stayed as collateral attack abuse of process

Update, 16 August 2010: Justice Emerton’s decision dismissing the appeal is at [2010] VSC 351.

Original post: In Walsh v Croucher [2010] VSC 296, a convicted fraudster who was, at least in about the year 2000, a bald-faced, opportunistic, calculating and manipulative liar (see R v Walsh [2002] VSCA 98 and R v Walsh [2000] VSC 114), sued his appeal counsel for negligence, breach of fiduciary duties, and misleading and deceptive conduct.  But for the negligence, the claim contended, his appeal would have succeeded.  The Supreme Court let the proceedings roll along for two and a half years before Associate Justice Mukhtar permanently stayed them as an abuse of process.  Mr Walsh’s attempts, in the very last days in Victoria of the grand jury, to convene one, were not enough to avoid the termination of his negligence claim.

The proceedings were an abuse of process in that they sought impermissibly to attack collaterally the decisions of the jury and of the Court of Appeal that he was guilty of the frauds he was convicted of.  It was impermissible for him now to contend, as a foundation of his cause of action against the barrister, and not having appealed the decision of the Court of Appeal, that he was not guilty, because to do so is against public policy.  I considered the law of collateral attack abuse of process in its applications to solicitor’s negligence claims in ‘Compromise of litigation and lawyers’ liability: Forensic immunity, litigation estoppels, the rule against collateral attack, confidentiality and the modified duty of care’, (2002) 10 Torts Law Journal, 167.  Let me know if you would like a copy by email.  Associate Justice Mukhtar’s explanation is concise and worth setting out in full: Continue reading “Fraudster’s negligence claim against appeal counsel permanently stayed as collateral attack abuse of process”

NSW Court of Appeal on advocates’ immunity for out of court work

The NSW Court of Appeal dismissed an appeal from a decision finding that a solicitor was not immune from a negligence suit based on a failure to prepare evidence promptly, though its comments in relation to immunity were obiter dicta [102]. Although the evidence did get adduced after a change of solicitors and before the end of the trial, so that the solicitor’s client succeeded, the client was penalised when it came to costs for adducing the critical evidence at the last moment, contrary to case management pre-trial directions. Not only did the succeesful client not get an order that the other side repay its costs, but it was ordered to pay the other side’s costs. The decision is Walton v Efato Pty Ltd [2008] NSWCA 86. Another aspect of the decision is noted at this sister post. Justices of Appeal Beazley and Giles agreed with the lead judgment of Justice of Appeal Tobias.

What happened was that a creditor of a company served a statutory demand on a company. The company’s solicitor did not file and serve within the necessary 21 days the application to set it aside on the basis of a genuine dispute as to the existence of the debt. He did so out of time. So by operation of the Corporations Law, 2001, the company was presumed to be insolvent, and the courts had no power to extend the time retrospectively. Continue reading “NSW Court of Appeal on advocates’ immunity for out of court work”

Judge says finality has overtaken intimate connection as immunity touchstone

A New South Wales District Court judge has handed down an important decision on advocates’ immunity, which is under appeal. The case is Fowler v La Fontaine [2007] NSWDC 207. It is a case which explores what the test for the immunity really is now that the High Court has said ‘it’s all about finality’. The decision on appeal will be important especially in those cases where there is no adjudicated outcome after a contested hearing, such as where there is a discontinuance, or a default judgment, or a striking out consequent upon terms of settlement. The facts, and the relevant bit of the judgment, are set out below. Continue reading “Judge says finality has overtaken intimate connection as immunity touchstone”

2nd edition of Professional Liability in Australia reviewed

I was already a fan of the first edition of Judge Stephen Walmsley SC, Alister Abadee, and Ben Zipser‘s excellent Professional Liability in Australia, published by Thomson, and had been waiting for the new edition with interest. I got myself a copy the other day. It’s good, and there are substantial additions since the first edition, including a lot on expert evidence, a new bit on professional discipline, analysis of the Financial Services Reform Act, 2001, analysis of the cases on the civil liability acts and a good analysis of proportionate liability.

It is a text which delves into all of the legislation which clusters around professional liability these days and grapples with it, a thankless task for an Australian text writer compelled to read and understand all of the states’ and territories’ regimes and then synthesise them. So the availability of compensation in professional discipline regimes is treated properly, as is the effect of professional standards legislation, which caps liability for scheme mebers. The research is wide-ranging and thorough: a VCAT decision is cited. It is written from a practical perspective rather than a theoretical perspective. There is not the over-reliance on English authority which sometimes characterises texts in this area. The writing tends to take positions rather than carrying on at great length about parallel or divergent lines of authorities without suggesting which is to be preferred. One suspects that bad decisions have simply been ignored in the hope that they will be forgotten. If only more text writers would operate in this fashion.

Professional negligence is one of those areas of law in which everyone claims to be a specialist. There are, for example, 387 barristers at the Victorian Bar who claim on their web profile to practise in professional negligence. Then there are undoubtedly many others, like me, who haven’t listed their practice areas using the scheme which allows for searching like that.

Thomson has kindly offered a 10% discount for readers of this blog if you go to their bookshop at 160 William St, Melbourne. Alternatively, the book can be purchased online, for $220 inclusive of postage and handling.

Continue reading “2nd edition of Professional Liability in Australia reviewed”

NSW Supreme Court says solicitor immune from suit for out of court omissions

Update, 12 March 2009: The advocates’ immunity part of the trial judge’s reasons did not really survive on appeal: Coshott v Barry [2009] NSWCA 34. Quite where that leaves the authority of Keefe v Marks (1989) 16 NSWLR 713, a decision of Chief Justice Gleeson, remains to be worked out. Justice of Appeal Ipp with whom and Justices of Appeal Beazley and Campbell said, remarkably pithily:

Advocate’s immunity
61 James J also rejected the Citibank Claim “by reason of advocate’s immunity”. His Honour said, “[d]etermining what claims for relief should be included in the pleading was work done out of court which led to a decision effecting the conduct of the case in court.”

62 In my opinion, this finding by his Honour went too far. Mr Coshott’s case was that Mr Barry breached his duty to advise virtually from the inception of the retainer. Such an alleged failure would be too far removed from the actual conduct of the trial to be covered by the doctrine of advocate’s immunity. I do not think that, when the retainer commenced, a failure to advise as alleged could be regarded, properly, as leading to a decision affecting the conduct of the case in court (Giannarelli v Wraith [1988] HCA 52; (1988) 165 CLR 543 at 560 per Mason CJ). The period from the time the retainer commenced to the trial itself was too long for the requisite connection to the conduct of the case in court to be established.’


’76 Having regard to the degree of control exercised by Mr Coshott over the proceedings, and to the fact that senior counsel did not query the admissibility of Mr Davis’s report, I consider that James J was correct in finding that, had Mr Barry advised that Mr Davis’s evidence was not admissible, Mr Coshott would have not accepted that advice. For the reasons given in connection with the Citibank Claim I do not consider that his Honour ignored s 5D of the Civil Liability Act when making this finding.

77 The question whether the defence of advocate’s immunity applies to the PSO claim is open to question. Mr Coshott contended that Mr Barry breached his duty in regard to the admissibility of Mr Davis’s evidence as from the time Mr Davis provided his report; hence, the breach occurred too long before the trial to be regarded as involving a decision affecting the conduct of the case in court. There are difficulties in determining this question, as it is not clear when Mr Barry was first duty-bound to consider the admissibility of the report. It may well be that James J correctly decided that Mr Barry’s conduct in regard to Mr Davis’s report involved “[w]ork done in deciding what witnesses should be called and what evidence should be sought to be adduced from them” (as his Honour put it). In view of the other conclusions to which I have come in regard to the PSO Claim, it is not necessary to decide this issue.’

Original post: The New South Wales Supreme Court yesterday gave judgment for a solicitor on an advocates’ immunity defence to a claim of professional negligence in respect of out of court work by the solicitor. The decision of Justice James was in the matter of Coshott v Barry [2007] NSWSC 1094. This disciplinary decision seems to be related in some way: Law Society of New South Wales v Vardas [2006] NSWADT 118. Anyone want to contribute a case note to this blog? Could be a while until I get around to it. What the Court said about immunity in the first case is reproduced below: Continue reading “NSW Supreme Court says solicitor immune from suit for out of court omissions”

Solicitors’ settlement advice immune from suit

I know for a fact that the profession does not understand the extent of the advocates’ immunity which is set out in the decision of the majority in D’Orta-Ekenaike v Victoria Legal Aid [2005] 223 CLR 1. Not uncommonly I see lawyers’ negligence claims arising out of litigation being defended without claiming the immunity, or wasting costs by failing to claim it at the outset. In Jezovita v AGL [2007] VCAT 1447, VCAT’s Senior Member Howell, undoubtedly the most experienced examiner of immunity defences in the world, has delivered a pithy judgment which reiterates two matters in a clear way, and states clearly something which is relatively newly brought out into the open, though it has been lurking around quietly if you looked hard enough. The two matters reiterated are:

  • in relation to out-of-court litigation work, solicitors are as entitled to the immunity as barristers, regardless of whether they are appearing as advocates or engaging in the solicitor’s traditional role; and
  • advice as to settlement of litigation, as well as failures to advise in relation to settlement issues, may not be sued on because of the immunity: Biggar v McLeod [1978] 2 NZLR 9; Kelley v Corston [1997] 4 All ER 466.

In this matter, both solicitors and barrister were entitled to summary disposition of Mr Jezovita’s claim against them that they pressured him into the settlement, should have realised he did not understand the terms of settlement, that they negotiated negligently and did not get a satisfactory result, and that they should have advised him to run his case. In other words, just another failed regretted settlement case.

The relatively new matter clearly expressed in this judgment is that adding an allegation of undue influence into the plaintiff’s case will not assist, because the equitable doctrine of undue influence either founds a defence to a claim based on a transaction said to have been induced by undue influence of the counterparty or founds a claim to set aside a disposition said to have been brought about by the exercise of undue influence on the part of the counterparty to the disposition, but does not lead to an entitlement to damages: D’Orta-Ekenaike v Victoria Legal Aid (per Buchanan JA in the reasons for decision of the Court of Appeal’s refusal to grant leave to appeal from Judge Wodak’s decision at first instance, approved by Justice Callinan on appeal at (2005) 223 CLR 1 at 121).

WA Supreme Court says advocates’ immunity applies to misleading and deceptive conduct claims against lawyers

In Alpine Holdings Ltd v Feinauer[2007] WASC 58, the Supreme Court of Western Australia gave very short shrift indeed to an argument that a statutory claim of misleading and deceptive conduct was not met by advocates’ immunity. The decision is interesting for this reason alone. It is also interesting because of:

New Zealand ditches advocates’ immunity; Scotland confirms it

It took New Zealand’s new ultimate appellate court a long time to hear Chamberlains v Lai [2006] NZSC 70 and make a decision, but after a long think, its judges have decided to give advocates’ immunity the boot. Advocates’ immunity, otherwise sometimes known as “barristers’ immunity” or “forensic immunity”, applies equally to solicitors involved in litigation as to barristers involved in litigation. It is an immunity from being sued for negligence or anything else for work in court or work intimately connected with such work in court, and is based on the public policy that the umpire’s decision is final.

Many will be the analyses of how Australia is alone in the civilised world in retaining the immunity (though they will be wrong, because Scotland recently followed Australia’s lead and thumbed their noses at the House of Lords: see below). But what needs to be analysed is whether as a practical matter, clients can successfully sue barristers in any particular place, whatever the name of the impediment to doing so is. A right to sue which gives rise to an unsuccessful suit is a right to make a very poor investment of a lot of legal fees. The law in places which profess not to recognise the immunity is less different than we might imagine from the law in places which do profess to do so. The more I know about the law, the more interested I am in analyses of facts against results, ignoring the legal language interposed between them.

Meanwhile, the Inner House of Scotland’s Court of Session declined an invitation to abolish the immunity in criminal cases in Wright v Paton Farrell [2006] SLT 269, showing uncharacteristic restraint in this curious corner of jurisprudence by not commenting on civil cases.

Barrister leaves claiming the immunity too late to get costs when he wins

Zunica’s Case [2006] VCAT 110

A barrister succeeded on an immunity defence and sought costs upon receiving the reasons. The applicant sought recognition of the fact that a costs dispute survived the immunity decision. Mr Butcher said [7]:

“The jurisdiction of the Tribunal to hear and determine a dispute is based upon the dispute as it is originated and described to the relevant RPA, in this case the Victorian Bar.”

Although the Victorian Bar had described the matter as a costs dispute and a pecuniary loss dispute in the critical notice under s. 128 of the old Act to the effect that it could not settle the problems, allowing the parties to refer the matter to the Tribunal should one of them wish to do so, he found that properly construed, the documents which had led the Victorian Bar to describe the matter as in part a costs dispute were found in fact to constitute purely a pecuniary loss dispute. And that was despite the fact that the box on the form used to lodge costs and pecuniary loss dispute resolution requests next to the statement “I think the legal practitioner handled the matter badly and I don’t want to pay for this” was ticked. It was so because the covering letter under which the form had been lodged, drafted by a solicitor, “formally claim[ed] pecuniary loss”, and there was no evidence that the discretion to exercise the 6 month time limit for the lodgment of costs disputes had been exercised by the Victorian Bar.

The costs application failed because the whole dispute resolution process took almost 18 months, but the respondent barrister did not assert the immunity as a defence until a week before the hearing. He asserted that:

“it was not proper for a claim for immunity to have been brought [during the attempts at dispute resolution by the Victorian Bar] on the basis that the dispute is misconceived or lacking in substance” [26].

Mr Butcher agreed with that submission, though later he said more equivocally:

“Even if the matter were to be allowed to go through the process of the Bar Ethics Committee before claiming the immunity…”.

It is not at all clear why a barrister ought not claim the immunity during the process of the Bar Ethics Committee. What that Committee was charged with doing, under s. 128 of the Legal Practice Act, 1996 was to attempt to settle the dispute. A dispute with a man who is immune from the dispute and relies on it must be easier to settle than a dispute with a man who does not.

The proposition that:

“It is no answer to say that the applicant client should have known of the immunity; what is relevant is when and how it is notified by the legal practitioner claiming that immunity”

is superficially unattractive since the test for the award of costs against an applicant is whether the dispute was misconceived, but the reasoning is in fact correct, because the immunity is a defence and the dispute is not misconceived until such time as the respondent advises he wishes to avail himself of the defence.

Ed Richards was for the applicant, Peter Cawthorn for the respondent, a barrister.

Barrister claims immunity too late to get costs; regretted settlement suit fails

Phua’s Case (solicitors) [2005] VCAT 2919 Costs dispute; s. 86 discount; regretted settlement

Phua’s Case (barrister) [2005] VCAT 2918 Costs of hearing; immunity

Mrs Phua was alleged to have stolen from her employer. Mr Phua admitted complicitly and made restitution. The employer commenced Magistrates’ Court proceedings. The Phuas defended and counterclaimed for wages and travelling expenses. Then they retained the solicitors in February, briefing them with tape recordings of a police interview. Mrs Phua was subsequently charged and convicted in October, but the solicitors did not act in those proceedings which resulted in a bond and an order to make restitution of a further $7,500 or so. It seems the solicitors acted in the counterclaim, the civil proceedings having been perhaps overtaken by the restitution order in the criminal proceedings. It settled on the afternoon of the first day’s hearing, 11 months into the retainer (quaere the date in [5] is wrong).

The solicitor’s estimate of future costs under s. 86 of the Legal Practice Act, 1996 was $3,500 for costs and disbursements. In fact they charged $1,100 more than that. They had charged twice for one letter, and the duplication was disallowed.

Phua’s claim was that he settled “only because counsel for the emplolyer insisted that provision of [certain pieces of documentary evidence] at such a late stage would cause the hearing to enter a second day, with the consequential increase in legal costs”. The claim for compensation was dismissed on the basis that the evidence other than that which was not discovered until the day of the trial could not have been completed on that day anyway.

Mr Howell referred to the understimate by $1,100 as “a signifcant amount” but did nothing about it. He characterised the breach as one of failing to advise changes to the original estimate promptly, and noted that before the trial, Phua knew what the costs would be. Though it was “rather late for [the solicitors] to be asking for counsel’s fees and thus, in substance, to be changing the estimate” he was not satisfied “that the delay in changing the estimate was of a sufficient degree of seriousness to warrant the reduction of the accounts”. So Phua was awarded the grand sum of $19.60. The barrister who was also sued was immune from suit because advice as to settlement during a trial is immune: Biggar v McLeod; Kelley v Corston. He did not get costs “but only because” he did not claim the immunity prior to the hearing.

The parties were unrepresented. Alan Hebb was for the Tribunal.