All-new High Court to hear advocates’ immunity appeal

The plurality judgment in the last decision of the High Court squarely about the advocates’ immunity was written by Chief Justice Gleeson and Justices Gummow, Hayne and Heydon JJ.  They have now retired from the Court.  As have the other judges who constituted the Court in D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1, Justices McHugh, Kirby and Callinan.  Now, a Court constituted by a selection of the current justices (Chief Justice French and Justices Kiefel, Bell, Gageler, Keane, Nettle and Gordon) will hear an appeal from the New South Wales Court of Appeal’s decision in Jackson Lalic Lawyers Pty Ltd v Attwells [2014] NSWCA 335 (trial judge’s decision here, and special leave application transcript here: the application was heard by Justices Bell, Gageler and Gordon, and the appellant’s counsel was R. D. Newell), and the appeal seems set to be heard in November.  Lawyers allegedly negligently settled litigation, were sued for damages, and successfully invoked advocates’ immunity.

I have been thinking about these questions for a long time and many times as a lawyer representing solicitors and barristers, called on the immunity successfully.  I published the concisely titled ‘Compromise of litigation and lawyers’ liability: Forensic immunity, litigation estoppels, the rule against collateral attack, confidentiality and the modified duty of care’ in 2002 at 10 Torts Law Journal 167 and would be happy to provide a copy upon request.  I was also in the High Court for argument of D’Orta-Ekenaike’s Case as one of the barrister respondent’s instructing solicitors.  I might even pop up to Canberra to watch the argument in this latest case.

It was third time lucky for a leave application in this kind of case, after the Court declined special leave in Young v Hones [2015] HCASL 73 (6 May 2015, Bell and Gageler JJ) and Nikolidis v Satouris [2015] HCASL 117 (4 August 2015, Nettle and Gordon JJ (‘Given the procedural history of those initial proceedings, including that the applicants agreed to settle those proceedings, the present case does not provide an appropriate vehicle for reconsidering [the immunity]’).

In the Court of Appeal, Chief Justice Bathurst, with whom Justices of Appeal Meagher and Ward agreed, reversed the decision of Harrison J.  The trial judge was quite frank: he said in a cri de cœur which met with little sympathy on appeal:

‘Notwithstanding all of the above, there remain at least two related matters that in my opinion are particularly troubling in this case, and which directly intersect with the way in which I am able to dispose of this application. The first matter is the apparent or potential strength of the plaintiffs’ allegations that the defendants have been negligent. As I have already commented, the plaintiffs would have been substantially better off if they had simply not defended the proceedings. The predicament that the judgment created for them is difficult to explain but even more difficult to understand. It is also difficult not to have a sense of unease about the possibility that an egregious error may go without the prospect of a remedy.’

Even if the immunity is not abolished, the decision has the potential to radically re-write the immunity landscape.  The other thing it will do is promote discussion of the immunity, see good people marshalling the increasingly excellent arguments in favour of its abolition, and provide the possibility (again) for legislative amendment or abolition.

What has happened since D’Orta-Ekenaike’s Case?  My (admittedly somewhat) Victorian-centric thinking suggests the following:

First, The New Zealanders have ditched the immunity in Chamberlains v Lai [2007] 2 NZLR 7, rejecting the new (‘It’s all about finality which is a very good thing’) justification for the immunity substituted in D’Orta-Ekenaike’s Case for the old English justifications which had sufficed in the previous High Court case, Giannarelli v Wraith (1988) 165 CLR 543.

Secondly, New South Welsh have continued to sue lawyers for error in litigation as if the immunity did not exist, Lawcover has aggressively employed the immunity to seek summary judgment and the New South Wales Court of Appeal has either gone completely nuts in its application (a frequently heard view in Victoria) or has correctly teased out the full implications of the plurality’s decision in D’Orta-Ekenaike or (more likely, in my opinion) a bit of both.

Thirdly, other states have not been so enthusiastic: the Westralians (the Chief Justice is a Westralian) have been comparatively parsimonious in their dishing out of relief (a division between intermediate appellate courts commented on by the Court during the special leave application).

And in Victoria (home to Justices Nettle and Gordon) Justice Bell made his views about the unfairness of the immunity plain in Goddard Elliott v Fritsch [2012] VSC 87.  In Fritsch his Honour conducted a lengthy trial in which evidence was taken from two retired Family Court judges as to what the Court would have found but for Mr Fritsch’s lawyers’ negligence, found the defendants (solicitors and counsel) negligent, found loss and damage of $900,000 proven but reluctantly found himself bound to respect persuasive authorities from other jurisdictions that the immunity extended to advice leading to settlement of a case, and to inadvertent inaction, gave judgment for the defendants with costs and ordered the plaintiff to pay their outstanding costs, finding that the immunity prevented the plaintiff from raising a case for the diminution in the fees owing on account of the negligence.

Fourthly, the Victorian parliament has enacted the Civil Procedure Act 2010 which provides for compensation for breaches of overarching obligations owed by lawyers personally to the administration of justice, representing a clear partial abrogation of the immunity and parliamentary willingness to promote satellite litigation so repugnant to the plurality in D’Orta-Ekenaike’s Case and to erode the sanctity of the finality of decisions in the special sense of that concept employed by the plurality in D’Orta-Ekenaike’s Case.

I will write about the decision under appeal in a future post.  For the moment, it is enough to note that at least part of the alleged negligence was as to the form of orders agreed by consent following an out of court settlement, mid-trial, of a case by a bank against a guarantor.  The claim was brought exclusively against the guarantor’s solicitors, an incorporated legal practice, despite the involvement of a QC in the compromise.  (That suggests that the real negligence alleged is the documentation of a compromise negotiated in broad form by the QC, who was not involved in the documentation, and makes it a particularly interesting advocates’ immunity case.)  The guarantee was limited to $1.75 million and the out of court settlement negotiated by the QC required payment of that sum but with about five months in which to pay up, but the orders consented to were for judgment for the full amount of the debt ($3.4 million) and an undertaking not to enforce the judgment if the $1.75 million were paid by the due date.  In other words, the guarantor got a few months in which to pay but had judgment entered against him in a sum almost twice as much as the worst case scenario if the case had gone to judgment.

The case squarely raises the questions of when it is appropriate to determine suits by reference to advocates’ immunity before trial, and whether advice to settle a common garden variety civil case (family law cases are slightly but relevantly different) is within the test for the immunity.  That question will open up the interrelationship of the justification for the immunity (finality is sacrosanct except upon appeal) with the test for the immunity.  The case appears not to raise any questions of abuse of process by way of collateral attack upon the final judgment of a court of competent authority (and so to be a ‘pure’ advocates’ immunity case).


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