Updated, 23 June 2015: See Doulman v ACT Electronic Solutions Pty Limited (No 2) [2015] FCCA 1664
Updated, 16 July 2014: Brereton J summarised the authorities on this question in In the matter of HIH Insurance Limited (in liquidation); Smith v McGrath [2014] NSWSC 922 at [17], as follows:
‘Fundamentally, the extent of a lawyer’s authority depends on the construction of the retainer, in which terms can be implied as well as express [Hawkins Hill Gold Mining Co v Briscoe]. However, generally speaking, clear and specific words are required to authorise the institution of court proceedings Atkinson v Abbott; Wray v Kemp; Hawkins Hill Gold Mining Co v Briscoe]. This is because of the serious consequences, including in particular exposure to the possibility of adverse costs orders [City of Glenorchy v Addison]; and also because a solicitor ought not readily be implied to be authorised to decide whether or not to institute proceedings [Hawkins Hill Gold Mining Co v Briscoe; Atkinson v Abbott]. Where words to the effect of authorising “such further steps as may be necessary” follow the main object of the retainer, those words are not sufficient to authorise institution of proceedings where the specific words would not do so, the general words being restricted to what is necessary for the proper performance of the particular acts [Kemp v Wray; Knox Street Apartments v Flexman]. While authority to institute proceedings once given extends to final judgment and execution, it does not authorise institution of an appeal without further express instructions [James v Ricknell; In re Joseph Woolf; City of Glenorchy v Addison].’
Original post: Bray v Dye (No 2) [2010] VSC 152, a decision of Justice Judd, is a salutary reminder of the importance of solicitors getting very clear instructions from anyone on whose behalf they intend to commence or defend legal proceedings, and checking that they have capacity to engage in litigation (i.e. that they are of sound mind, and are not minors). In relation to this fundamental instruction in a retainer, it is more dangerous to rely on instructions through agents than it is to take instructions from agents in relation to steps in the litigation. Get it wrong, and the lawyer will be ordered personally to pay adverse costs ordered against the phantom litigant, once the truth is ascertained, generally following an attempt at execution. That is what happened in this case: the solicitor and the barrister were substituted for the person on whose behalf they instituted proceedings, unbeknown to her, which failed and resulted in adverse costs orders. According to the lawyers’ version of events, they did so on the basis of the second plaintiff’s oral instructions that he was authorised by the first plaintiff to instruct them to commence proceedings. Continue reading “Reminder: you need very clear instructions before commencing proceedings on a person’s behalf”