Damages for distress in professional negligence claims and disciplinary complaints

A recent decision of a two member panel of VCAT reiterates what has been orthodox in the Legal Practice List, and before that in the Legal Profession Tribunal: that damages for distress may be awarded in a negligence claim without the need to establish a medical condition.  Such damages may be awarded in tort notwithstanding the general rule that they are not awarded in contract unless it is a term of the contract to prevent the kind of distress which is in fact suffered. The recent decision is Eaton v Owens [2010] VCAT 1123 (Senior Member Howell and Member Shattock), the relevant parts of which are set out below, along with further comments by me.

It is sometimes said that such awards should be kept modest, but that is not true in Victoria: Boncristiano v Lohmann [1998] VSC 228 (unanimous Court of Appeal).  I agree with the Court of Appeal: the law is too fixated on pecuniary loss. Continue reading “Damages for distress in professional negligence claims and disciplinary complaints”

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”

Latest decision on implied waiver upon suing former solicitors

In Schulman v Abbot Tout Lawyers (a firm) t/a Abbott Tout Solicitors [2010] FCA 308, a plaintiff sued his former lawyers for misleading and deceptive conduct.  At the same time as the misleading representations, which were in the nature of legal advice, were alleged to have been made by them to him, he had been obtaining legal advice from the lawyers who came to act for him in the case against the former lawyers.  The former solicitors wanted inspection of the advice given by the new lawyers at exactly the time the plaintiff said he had relied on the former solicitors’ representation to his detriment.  There are certainly issue waiver cases out there pursuant to which such inspection might have been ordered.  But Justice Flick said there was no evidence that the subject matter of the legal advice was the same as the subject matter of the controversial representation, or even that it was relevant to it, and even if there had been, the plaintiff had done nothing in the proceedings so far inconsistent with the maintenance of the privilege so as impliedly to waive it.  His Honour said, at paras [17]ff: Continue reading “Latest decision on implied waiver upon suing former solicitors”

Changes to legal professional privilege operate retrospectively

They’ve changed the law in relation to legal professional privilege on us. The common law has been abolished, at least in relation to compulsory processes (discovery, subpoenas, interrogatories, notice to produce) in fora where the new Evidence Act, 2008 applies, and the adduction of evidence in those fora. Two legal professional privilege regimes are now going to apply in relation to any particular communication.  If the Tax Man, or the Legal Services Commissioner, compels you to produce documents, the common law will apply.  If you produce them, the common law will determine whether the production amounts to a waiver.  If the investigation leads to court (but not VCAT) proceedings proceedings, to which the new law will apply, you might be compelled by subpoena to produce documents you successfully resisted producing in the investigation pursuant to the common law.  Furthermore, in those proceedings, the Court will decide for itself, under the new law, whether the production to the Commissioner in the investigation amounted to a waiver or not.

The change is not as great as it might have been had the uniform evidence law been introduced into our land prior to the last round of amendments.  Now the law relating to implied waiver of privilege is stated in more or less the same terms as the common law, as expounded by Mann v Carnell, and the new law applies to post-commencement but pre-trial stages of court cases as well as at trial.  But there are differences too: Justice Byrne’s decision referred to below confirms it.

I blogged about the transitional provisions for the new legislation here.  It occurred to me that since the Hikers are so fond of emphasising what a basic common law right the right to assert legal professional privilege over confidential communications is, there was a real question about whether the changes ought to operate retrospectively, in the sense that communications which occurred before this year (i.e. before the commencement of the new Act) which were already entitled to legal professional privilege at common law might be adjudged not to be privileged for the purposes of proceedings governed by the new Act.  There is a presumption in statutory interpretation against the retrospective taking away of accrued rights.  But there is no such presumption in relation to changing procedures for the vindication of rights.

Someone has actually already run this esoteric argument.  In Main-Road Property Group Pty Ltd v Pelligra & Sons Pty Ltd (No 4) [2010] VSC 27, Justice Byrne, who knows a thing or two about the law of evidence, gave the argument short shrift, though his views are purely dicta: Continue reading “Changes to legal professional privilege operate retrospectively”

Benecke v National Australia Bank: imputed waiver by criticising lawyers in proceedings to which they are strangers

Benecke v National Australia Bank (1993) 35 NSWLR 110 is one of the best known Australian cases about imputed waiver in relation to making allegations about the course of the retainer of former lawyers.  It is not, however, a case about imputed waiver in professional negligence suits against former solicitors, since this was not such a suit.  Rather, in the course of a proceeding to set aside the settlement of a previous proceeding, Ms Benecke claimed that her solicitor and the other side’s solicitor had settled her case without Ms Benecke’s authority, and gave a detailed account of her conversations with her QC.  The defendant, seeking to uphold the settlement called Ms Benecke’s former QC as its witness.  Ms Benecke’s complaint upon appeal that such evidence was privileged and should not have been admitted was rejected on the basis that Ms Benecke had waived privilege over the conversations by setting out her version of them. Continue reading “Benecke v National Australia Bank: imputed waiver by criticising lawyers in proceedings to which they are strangers”

Professionals’ duties of care to subsequent purchasers of commercial buildings

My fellow barrister Andrew Kincaid has written a useful summary of that thorny part of the law of negligence which regulates in what circumstances builders owe a duty to people who buy buildings from the original owner to avoid them suffering pure economic loss when a latent defect becomes patent. Although we (or I at any rate) usually think about this problem in terms of builders, Andrew points out for readers of this blog that President Maxwell’s decision in Moorabool Shire Council v Taitapanui [2006] VSCA 30 suggests at [24] that desk-workers like engineers and designers might also owe these kinds of duties.  Here it is: Continue reading “Professionals’ duties of care to subsequent purchasers of commercial buildings”

Latest on expert evidence in professional negligence cases

A barrister is being sued for negligence in the NSW Supreme Court. The plaintiff sought to tender an expert report of a senior counsel to the effect that a barrister of ordinary competence would have appreciated from the start that the case he had run on behalf of the plaintiff had been hopeless. Mid-trial, the Court refused the tender of the report, and refused an application to tender a varied report with a view to curing the defects which prevented the tender of the original

The Court found that the witness, having 32 years’ practice in the relevant fields probably was qualified to give evidence about what competent lawyers would do in various situations in his fields of practice, even though the evidence of that competence had not been properly set out. At issue was a dispute arising from a conveyance, so there was a large body of practice to assess. Justice Brereton doubted the wisdom of the drafting of the report (‘In the circumstances faced by [the barrister]’, a careful and competent professional would have acted …), but found that this was not one of the numerous cases where the failure to articulate exactly what those circumstances were understood to be rendered the report bad.

By the time the barrister’s conduct fell to be considered, the case the expert said the defendant barrister should have appreciated to have been hopeless had gone against the barrister’s client. What rendered the report inadmissible was ex post facto reasoning backwards from the adverse judgment, an ambiguity in the report, and a lack of articulated reasoning (the two key paragraphs from the judgment are reproduced below). The report was nothing but assertion — just an ipse dixit. The decision is Lucantonio v Klein [2009] NSWSC 853. Justice Brereton summarised the relevant principles helpfully:
Continue reading “Latest on expert evidence in professional negligence cases”

Latest lawyers’ liability newsletter from Reynolds Porter Chamberlain

Here it is.  The abstract of the article of greatest interest is as follows:

‘When he delivered his judgment in Pritchard Joyce & Hinds v Batcup [2008] EWHC 20 (QB) Underhill J said that he had striven to avoid hindsight and had reminded himself that the central issue he had to decide was whether any reasonably competent barrister would have given the advice that it was alleged should have been given by S and B (leading and junior counsel), not what he himself, or indeed, any other particular barrister in S and B’s position, might have advised. He found that S and B had been negligent in failing to advise their clients of the time limit applicable to a potential claim against their former solicitors Wellers.’

Juries in civil cases

When I was called up for jury duty and picked as a juror, I was surprised to learn of the existence of juries of 6 in civil cases. That was of course before I was a lawyer.  Mine was a personal injuries case about an alleged back injury, but it settled, robbing me for at least a long time of my opportunity to participate in the third great arm of government.

Gunns Ltd v Marr is an extraordinary proceeding unfolding itself slowly in the Supreme Court.  The environmentalist defendants sought trial by jury.  Justice Forrest (ho ho) said — No, too complicated, and too long a trial: Gunns Ltd v Marr (No. 5) [2009] VSC 284. I knew that civil juries are common in personal injuries and defamation cases, but I must confess I remained until just now unaware that either party has a right to specify trial by jury of any claim founded in contract or in tort.  That means professional negligence claims against anyone, not just doctors, could at the election of one or other party presumptively be heard by a jury.  So too could an application for relief against an oppressive costs agreement or a lawyer’s suit for fees.

Here is his Honour’s handy summary of the law on civil juries in the Supreme Court: Continue reading “Juries in civil cases”

AR Conolly & Company’s Benchmark digest

To blog, you have to be able to write, type, and learn a new programme (WordPress in my case) but there is really only one trick to blogging, and that is finding what to write about efficiently.  I rely on various sources, most of which I will keep under my hat, but the best is a daily email put out for free by a Sydney specialist insurance litigation firm, AR Conolly & Company, titled ‘Benchmark’.  Someone there reads or scans a lot of cases, and digests them usefully, adding to the court-provided keyword headnote, providing hyperlinks to the Austlii versions of the decisions, and, where appropriate, to related decisions such as, in the case of appeals, the decision at first instance. Continue reading “AR Conolly & Company’s Benchmark digest”

60 days for referring pecuniary loss disputes to VCAT extendable

I was reminded when reading Sibonna Nominees v R Legal [2009] VCAT 893 that the 60 day period after the Bureau de Spank gives a punter a ticket under s. 4.3.7 of the Legal Profession Act, 2004 to enter VCAT for adjudication of an unresolved civil complaint of the species ‘pecuniary loss dispute’ is extendable under s. 126(1) of the VCAT Act, 1998 (‘[VCAT], on application by any person or on its own initiative, may extend any time limit fixed by or under an enabling enactment for the commencement of a proceeding.’)  Well, to be honest, which I’m trying to be more and more, ‘reminded’ is a euphemism.  Anyway, sitting there, just behind s. 127 which I have been skirmishing about in VCAT just this week, lay s. 126.  No doubt I should have known about it, but the reason I did not is interesting.  No one does what Sibonna Nominees was doing any more.  These kind of ‘pecuniary loss disputes’ in the old Legal Profession Tribunal were my bread and butter for a while, when I was a solicitor.  Now, punters generally just go under the Fair Trading Act 1999‘s consumer and trader dispute jurisdiction: s. 107ff. Continue reading “60 days for referring pecuniary loss disputes to VCAT extendable”

On splitting liability and quantum

In this post, I reproduce an extract from Justice Hoeben’s recent decision in Johnson v Trustees of the Roman Catholic Church [2009] NSWSC 309 which discusses the increasing willingness of courts (in NSW at least) to determine preliminary issues before the main trial. In this case, everything except for quantum was ordered to be determined in a first trial, with a second trial on quantum only if necessitated by the outcome of the first trial. It was a kind of professional negligence case in a sense: a pupil was suing her school for her teacher’s negligence while she was on school camp.

The only reform of civil justice I seem to hear about these days is an increasing emphasis on mediation. Well, that’s an exaggeration, since Victoria is about to join the uniform evidence legislation jurisdictions, and its Attorney-General proposes to unify the rules for all the courts (excellent idea), but I will put aside these promising developments for a moment. I suggest that rather than increasing the amount of mediation, civil justice reform should concentrate on increasing the level of judicial adjudication, which does not necessarily mean increasing the number of once and for all oral trials of all issues.  What there should be more mediation of is not the final outcome of cases, but the things which litigants at the moment typically go to court for: interlocutory battles.  Far better to outsource the adjudication of disputes about discovery and the parties’ articulation of their respective cases so that the trial is prepared quickly than to outsource the resolution of complaints. Continue reading “On splitting liability and quantum”

The construction of the full common law release

Litigation was settled for several million dollars. The release said

‘5. The plaintiffs hereby release the defendants from all claims, actions, suits, demands arising from or in any way connected with the Proceedings, the allegations contained in the Statement of Claim and of the liquidation of the third plaintiff.’

That’s the kind of release you can get when you’re willing to pay several mil for it. But what does it mean? ‘Don’t even think of bugging me ever again, in relation to anything that happened in the past, whether you’re aware of it or not’ or something more confined?  It is a question which crops up relatively often in practice, but the law on the subject has always seemed pretty obscure.  When several mil’s on the table people jump into these kinds of releases. Sometimes, they come to regret it. Justice Einstein explained the principles, in Shepherds Producers Co-operative Limited v Lamont [2009] NSWSC 294, commencing with the handy summary of the principles applicable to the construction of releases reproduced below. Continue reading “The construction of the full common law release”

Negligence claim against solicitor is a relevant factor in a limitation period extension application, part II

Update: See now Tomolo v Superior Meat & Poultry Supply (Aust) Pty Ltd [2021] VCC 1081.

Original post: I posted about this issue, as it arose in a 2007 decision of Justice Forrest, here. Since May 2003, certain Victorian actions for personal injury must be brought within 3 years after the injury was discovered to be attributable to the defendant’s negligence, or 12 years after the allegedly negligence conduct, whichever comes first.  Previously the limitation period was six years.  The period may be extended by the Court. In Delai v Western District Health Service [2009] VSC 151, Justice Beach explained why he granted the medical negligence claimant’s application.  The defendants argued that she had good prospects of suing her solicitor for negligently allowing the limitation period to go by, but that was not a sufficiently cogent consideration to get in the way of the success of the application. I reproduce the whole of the relevant discussion from the judgment:

Continue reading “Negligence claim against solicitor is a relevant factor in a limitation period extension application, part II”

More on the solicitor’s ‘penumbral’ duty of care (or lack of it)

Ever since Heydon v NRMA Ltd [2000] NSWCA 374; (2000) 51 NSWLR 1, the solicitor’s penumbral duty of care, orthodoxy since Hawkins v Clayton (1988) 164 CLR 539, has been looking shaky. The reference to the penumbral duty of care is a reference to the proposition that lawyers may owe duties in tort to take care to avoid foreseeable loss accruing to their clients, even if their retainer (i.e. their contractual obligations to the client) does not require them to do so. The classic example is the solicitor retained to document a transaction which to the solicitor seems improvident.  Can the solicitor document the transaction and stay mum about his concerns?  More to the point, can the stupid solicitor who does not notice what a competent solicitor would notice — that the transaction is manifestly improvident, get away with it by saying ‘Not my problem. Go sue someone you asked to advise on whether you struck a good deal or not.’? The whole question got a thorough going over in Kowalczuk v Accom Finance [2008] NSWCA 343. The decision of Justice of Appeal Campbell, with which Justices of Appeal Hodgson and McColl agreed, said: Continue reading “More on the solicitor’s ‘penumbral’ duty of care (or lack of it)”

Beneficiaries, executors, trustees, and privilege

Update, 19 August 2009: See now also Gray v BNY Trust Company of Australia Limited (formerly Guardian Trust Australia Limited) [2009] NSWSC 789.

Original post: In the last post, I mentioned that the claimant beneficiary was not allowed to see the solicitor’s file, despite having initiated a costs dispute with the executor’s solicitor. A recent decision of the Supreme Court of Western Australia spells out the law on the question: Murray v Schreuder [2009] WASC 51.  The law is:

58  In the case of a non-discretionary trust, … a beneficiary has a right – subject to exceptions – to inspect trust documents used by the trustee in the administration of the trust.  An exception will arise in the case of documents which are private to the trustee that may evidence the reasons that the trustee has made his or her decision or exercised a discretion, in circumstances where disclosure is not required and has not been made by the trustee:  Hartigan v Rydge (434, 442, 445); or where the document is the subject of a duty of confidence owed to a third party:  see, for example, Hartigan v Rydge (433, 446); Schmidt (734); Morris v Morris (1993) 9 WAR 150, 154; or where disclosure is not in the interests of the beneficiaries as a whole:  Rouse v IOOF Australia Trustees Ltd (1999) 73 SASR 484, 499; or where the terms of the trust deed give rise to an express or implied limit on a beneficiary’s right of access to trust documents:  Hartigan v Rydge (446).

The whole of the reasons’ legal discussion of this issue is reproduced below. Continue reading “Beneficiaries, executors, trustees, and privilege”

Expert evidence of good professional practice

There is an ongoing debate about whether judges who are after all themselves lawyers, need expert evidence about what competent lawyers tend to do in any given situation.  But it is clear that there are occasions when expert evidence of good professional practice is admissible in some solicitors’ negligence cases.  And certainly, expert evidence is an important feature of professional negligence cases against other professionals.  Experts are not supposed to give evidence of the ultimate issue, though that is a more complicated proposition, once you start analysing it, than it sounds.  Generally speaking though, an expert should say ‘in this situation, a competent professional would generally engage in a range of responses, from X to Y’, and should never say ‘I think the defendant was negligent in failing to do Z’.  With this kind of expert evidence, though, it is difficult to know when one proposition is just a rewording of another.  The limits of what the expert can properly say are, to my mind at least, somewhat cloudy.  In a recent decision in a stockbroker’s negligence case, Eric Preston Pty Ltd v Euroz Securities Limited [2009] FCA 213, Justice Siopsis reiterates and summarises the relevant principles articulated in Australian Securities and Investments Commission v Vines [2003] NSWSC 1095; (2003) 48 ACSR 291, as follows:

Continue reading “Expert evidence of good professional practice”

Proportionate liability in an accountants’ negligence case

Update, 4 May 2009: The costs decision (Sali v Metzke & Allen (No. 2) [2009]) is interesting.  I blogged about it here.

Original post: Sali v Metzke & Allen [2009] VSC 48 is a decision of Justice Whelan in an accountants’ negligence case.  It is an example of the proportionate liability scheme working as it was presumably intended. A professional firm sued for failing to detect wrongdoing was found liable, but instead of being liable for the victim’s entire loss (the deep pocket syndrome which proportionate liability is designed to avoid), it was found liable only for 30%.  Because the victim did not sue the wrongdoer (the wrongdoer having been joined as a defendant by the professional firm), the victim did not recover damages for 70% of its loss. Continue reading “Proportionate liability in an accountants’ negligence case”