Solis who fail to tell client about settlement offer immune from suit

Kendirjian v Lepore [2014] NSWDC 66 is only a decision of the District Court of NSW, but it purports to apply law binding on the judge, namely that identified in the NSW Court of Appeal’s decision in Donnellan v Woodland [2012] NSWCA 433.

The following facts were presumed to be true for the purposes of a summary judgment application brought by the defendant solicitor exclusively by reference to advocates’ immunity.  A man was advised his claim for personal injury was worth about $1.2 million.  Personal injury proceedings were commenced. The defendant offered to settle for $600,000 plus costs.  The man’s solicitors failed to advise him of the offer and rejected it.  When the man obtained about $310,000 plus costs at trial, he sued for the difference between his position after the trial and an appeal and the position he would have been in had he been informed of the offer, which he said he would have accepted.

The Court summarily dismissed the suit.  This passage should be carefully considered, unfortunately, by any plaintiff considering suing a lawyer for negligence in litigation, especially when the law of NSW applies, and especially when it is alleged that but for the negligence, a different final or interlocutory result would have obtained:

  1. It is not easy to identify any operative negligence by legal representatives in litigation that does not fall within the immunity as explained in Donnellan v Woodland
  1. The very matter that establishes causation enlivens the immunity. If the negligence did not impact upon the decision of the court, then it was not causative of loss, so the immunity is unnecessary. But if it impacted upon the decision (whether by consent or after a trial), then it is also likely to have led “to a decision affecting the conduct of the case in court“, and is therefore within the immunity. At its broadest, the test might suggest that an omission to commence proceedings timeously impacts upon decisions affecting the conduct of a case in court, such as evidence and submissions going to limitation issues or the continuance of the case to a hearing.
  1. Further, it is not easy to reconcile the policy behind the immunity with the substantial increase in the ambit of the liability of legal practitioners for wasted costs under ss 345-349 of the Legal Profession Act 2004 (see generally Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300; [2005] NSWCA 153, esp at [83]), but as this was not a matter canvassed by the parties I need not consider it.
  1. In my view, any decision not to discuss the settlement offer with Mr Kendirjian or properly advise him was necessarily a decision affecting the conduct of the case in court, namely, “deciding to continue with proceedings” (Donnellan v Woodland at [229]).


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