Substantial personal costs order application against solicitor fails

The latest application for an order that a party’s solicitor pay the costs of proceedings personally is Whyked Pty Ltd v Yahoo!7 Pty Ltd [2008] NSWSC 477. In dismissing the application, Justice McDougall commented:

‘[185] In theory, the courts are open to all. In practice, access to the courts is often dictated by the availability of financial resources. That is an unfortunate fact of life. It does not mean that those without resources should be barred from the courts, particularly where legal practitioners are prepared to accept instructions on a contingency basis.

[186] The policy underlying the power of the courts to order for security costs is based on different considerations. Undoubtedly, the exercise of that power has the effect from time to time of preventing arguable cases from being run. Where that happens, it should be pursuant to an order of a court on an application for security for costs, after balancing all relevant considerations. It should not be pursuant to a decision of a legal practitioner who is afraid to accept instructions from an impecunious client because the defendant, if successful, may obtain an order for costs against the legal practitioner personally.’

His Honour stated the law as follows: Continue reading “Substantial personal costs order application against solicitor fails”

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”

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”

Full Federal Court explains its Rules’ wasted costs jurisdiction

In Macteldir Pty Limited v Roskov [2007] FCAFC 49, the subject of the last post but one, the Full Federal Court explained the ambit of Order 62 rule 9 of the Federal Court Rules (which is reproduced in the previous post):

The Relevant Principles
[56] The parties generally accepted as correct the statements of principle found in Levick v Commissioner of Taxation (2000) 102 FCR 155 at [43] and [44]. Thus, in a claim under O 62 r 9, it is necessary for a client to demonstrate a serious dereliction of duty by the legal practitioner or a failure on the part of the legal practitioner to fulfil a duty owed to the Court to aid in promoting, in the practitioner’s own sphere, the cause of justice. It will often be difficult for a court to know all of the details and circumstances of a legal practitioner’s instructions. Further, the Court must be concerned about the risk of a practice developing whereby legal practitioners endeavour to brow beat their opponents into aban-doning clients, or particular issues or arguments, for fear of a personal costs order being made. Continue reading “Full Federal Court explains its Rules’ wasted costs jurisdiction”

Advocates’ immunity and the wasted costs jurisdiction

In Macteldir Pty Limited v Roskov [2007] FCAFC 49, my old firm Middletons convinced a unanimous Full Federal Court to pronounce sternly that advocates’ immunity may not be circumvented by a client seeking to invoke the wasted costs jurisdiction of the Court against its own former lawyers, and to re-emphasise emphatically that the wasted costs jurisdiction is only to be exercised in the case of something akin to abuse of process, and certainly not merely negligent conduct.

The plaintiff sued its former solicitors and counsel, asking for an order that it did not have to pay its lawyers’ fees and that the lawyers pay the client some of the costs the client was ordered to pay the other side in the proceedings. In this post I suggest by way of additional note that the High Court has pronounced emphatically that lawyers are immune from suits which claim ‘wasted costs’, that is, a claim that the client incurred unnecessary expense by taking an unnecessary step, or that a costs order was made against the client in favour of the other side as a result of poor advocacy. Anyone have a contrary view? Continue reading “Advocates’ immunity and the wasted costs jurisdiction”