Immunity from Lawyer Malpractice – Uniquely Australian

By John Freund |

The following article was contributed by Valerie Blacker, a commercial litigator focusing on funded litigation, and John Speer, a lawyer in the Dispute Resolution and Litigation Team at Piper Alderman.

While large class actions receive the lion’s share of media attention, litigation financiers also regularly fund litigation involving a single plaintiff. Given that solicitors are required to maintain professional indemnity insurance, they can be, in instances of negligence, an attractive prospect for financiers: they are well-resourced and have the capacity to satisfy any judgment awarded against them.

The Brisbane Litigation team at Piper Alderman have brought successful professional negligence claims against our clients’ former solicitors involving both funded and unfunded arrangements.[1] This article discusses a common defense raised in these types of proceedings – the advocates’ immunity.

The immunity in brief

In Australia, the advocacy function is immune from a negligence claim.  The immunity applies to a lawyer’s work in the court room. The immunity is rooted in the public policy principle that there should be finality in litigation. It prevents unsuccessful parties from seeking to re-litigate disputes by way of a collateral attack on their lawyers’ performance in court.

A barrister mainly appears in court, and a solicitor mainly performs legal work outside of court.[2] But why does it matter? If a lawyer has been negligent, shouldn’t the client be able to seek relief?

Apparently not – in some jurisdictions. Despite having been abolished in the United Kingdom and even in New Zealand, advocates’ immunity remains firmly in place in Australia.

Indeed, there were at least eighteen court actions in 2022 that have made reference to the immunity as a defense.

Avenues for redress

The immunity is often called upon by solicitors performing ‘out-of-court’ work, but which (so the argument goes) is so ‘intimately connected to the conduct of the case in court’. In two recent examples, the immunity applied to shield a solicitor for failing to present evidence that should have been presented (Golden v Koffel [2022] NSWCA 8), and was extended to protect a solicitor who had given faulty advice (Jimenez v Watson [2021] NSWCA 55).

If a solicitor’s negligent work was actually done in court in the course of a hearing or was done out of court but which led to a decision affecting the conduct of the case in court, the alternative options for an aggrieved client are frankly inadequate.

For example, (1) an unsuccessful party may apply for an order that his or her solicitor be made personally liable for the successful party’s costs in the litigation; (2) an aggrieved client can challenge a solicitor’s bills through an application to the court for a costs assessment; and (3) disciplinary action can be taken which can result in a fine, a reprimand or in a solicitor being disqualified from practice.

At best these alternative options may reduce a client’s costs but none of them will truly compensate a client for the wrongs caused by a lousy solicitor.

Narrowing the scope of the immunity

In a more positive move, the Courts have now made it clear that the immunity does not extend to a solicitor’s work in bringing about a settlement agreement (as an agreement between parties to settle is not an exercise of judicial power).[3] It is also now possible to be compensated for the expense of engaging new lawyers.[4]

NT Pubco Pty Ltd v Strazdins is also notable. The Court there held that a failure to advise clients to seek independent legal advice was held to be likely outside the immunity.[5] The relevant wrong in that case concerned a failure by solicitors to relay to their client comments made by the court at several interlocutory hearings that the client should have been pursuing a particular kind of relief in its litigation. That would be akin to failing to commence proceedings in time. That too should fall outside of the immunity as the aggrieved client’s cause of action was complete and whole before the proceedings were started and the negligent conduct was completely separate from the litigation.

The primary justification for retaining the advocates’ immunity is to ensure the finality of judicial determinations. However, if a client brings a negligence suit against a former solicitor is that not also a separate proceeding that deals with a different issue?

As Kirby J warned, upholding the immunity not only reduces equality before the courts, but is capable of breeding contempt for the law. His Honour questioned ‘why an anomalous immunity is not only preserved in Australia but now actually enlarged by a binding legal rule that will include out-of-court advice and extend to protect solicitors as well as barristers’.[6]

In these circumstances, can the reasons traditionally given for the immunity still persuade, particularly when the rest of common law world has abolished it?

At the risk of offending the doctrine and re-litigating this issue, perhaps we should continue the debate.

About the Authors:

Valerie Blacker is a commercial litigator focusing on funded litigation. Valerie has been with Piper Alderman for over 12 years. With a background in class actions, Valerie also prosecutes funded commercial litigation claims.

John Speer is a lawyer in the Dispute Resolution and Litigation Team located in Brisbane, Prior to joining Piper Alderman John was an associate to the Honourable Justice B J Collier in the Federal Court of Australia, as well as to Deputy President B J McCabe in the Administrative Appeals Tribunal. John has also worked as a ministerial adviser and chief of staff in the Parliament of Australia.

 

For queries or comments in relation to this article please contact John Speer | T: +61 7 3220 7765 | E:  jspeer@piperalderman.com.au

[1] These matters resulted in a confidential settlement.

[2] New South Wales and Queensland have a ‘split’ profession, meaning that the roles of barrister and solicitor are separated.

[3] Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1,  [5], [38], [39], [45], [46], [53].

[4] Legal Services Commissioner v Rowell [2013] QCAT OCR207-12.

[5] [2014] NTSC 8 at [134] and [137].

[6] D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1, 109 [346].

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Litigation Funding Support Ensures Law Firm Can Continue MoD Lariam Claims

By Harry Moran |

A frequent talking point among claimant law firms and litigation funders is the use of delaying and prolonging tactics by defendants, hoping to continually increase the financial cost of bringing a case until it is no longer viable to do so. However, as a recent example demonstrates once again, third-party litigation funding provides a significant weapon in the claimant’s arsenal when it comes to combating this type of strategy.

An article in The Law Society Gazette covers ongoing developments in the group action being brought against the Ministry of Defence over claims that its prescription of Lariam, an anti-malarial drug, caused harmful side effects to armed forces personnel. The law firm leading these claims, Hilary Meredith Solicitors, has denied reporting that it is facing bankruptcy due to the large costs involved in the case, and told the Gazette that its financial backing is secure.

In a statement to the Gazette, the law firm stated that its “bank and litigation funders have confirmed their ongoing financial support”, which will allow the law firm to continue with the Lariam cases without fear of bankruptcy. Hilary Meredith Solicitors admitted that whilst it had been necessary “to borrow millions of pounds to fund this David and Goliath type action”, the law firm’s financial footing was secure with the support of outside lenders.

The identity of the litigation funder supporting Hilary Meredith Solicitors is not specified by the law firm’s statement or the Gazette’s reporting.

The firm also confirmed that with 10 lead cases scheduled for trial at the High Court next year, they are now “close” to agreeing a settlement with the MoD. The Gazette also cites its reporting from last year, which revealed that the MoD had spent £20 million on its legal budget to defend against the claims brought between 2021 and 2022.

Three Amendments to the Litigation Funding Bill Discussed at Committee Stage

By Harry Moran |

As the Litigation Funding Agreements (Enforceability) Bill is subject to a line by line examination during the committee stage today, we can analyse the amendments that have been put forward by members of the House of Lords. Of the three amendments that were discussed during the committee stage, two were put forward by Lord Stewart of Direlton and one by Lord Marks of Henley-on-Thames.

Both of Lord Stewart’s amendments deal with the section of the bill that provides a definition of a litigation funding agreement.

The first of Lord Stewart’s amendments calls for the following line to be inserted at the end of the Clause 1, page 1, line 14: “(ia) where the litigant is a litigant in person, expenses incurred by that litigant, or”. In his explanatory statement, Lord Stewart said that this language “ensures that the definition of litigation funding agreements includes agreements under which a funder agrees to fund expenses incurred by a litigant in person.” 

The second of Lord Stewart’s amendments relates to Clause 1, page 1, line 16, which would take the following sentence: “the payment of costs that the litigant may be required to pay to another person by virtue of a costs order”, and would now be followed by: “, an arbitration award or a settlement agreement”. Lord Stewart explained that this would ensure that the bill’s definition of an LFA would also include “agreements under which a funder agrees to pay costs relating to litigation that arise by virtue of an arbitration award or a settlement agreement, as well as by virtue of a costs order.”

Lord Marks’ “probing amendment” would follow Clause 1 and would be titled “Review: enforceability of litigation funding agreements”. The language of the amendment requires the Lord Chancellor to “establish an independent review of the impact of provisions in this Act” and lays out the scope of such a review. This would include a review of safeguards for claimants, regulation of third-party funding, funders’ returns, and alternatives to LFAs. The amendment dictates that the review must be completed by 31 August 2025, and that the Lord Chancellor must then provide a response before Parliament within three months of receiving the review.

The full text of the amendments can be read here.

The current version of the bill can be read here.

LFJ will be providing a summary of the committee stage hearing once the Hansard transcript is available.

Carpentum Capital Launches Aurigon Litigation Risk Consulting (LRC)

By John Freund |

The team around former Carpentum Capital has launched AURIGON LITIGATION RISK CONSULTING (LRC), a litigation funding intermediary based in Switzerland with a special focus on Latin America. 

Founder and Managing Director Dr. Detlef A. Huber comments: ”AURIGON LRC is combining two worlds, litigation finance and insurance. Both areas are increasingly overlapping. Insurers offer ever more litigation risk transfer products and funders recur to insurance to hedge their risks. Hence complexity and advisory requirements are increasing, especially in still developing markets like Latin America. With our team of lawyers and former re/insurance executives trained in Latin America, the US, UK and Europe we are perfectly suited to advice our clients in any stage of the funding process or in related insurance matters. Our goal is to become the preferred partner for litigation and arbitration funding projects out of Latin American jurisdictions and I am looking forward to this new adventure.”

ABOUT AURIGON

AURIGON Advisors Ltd. is operating as re/insurance consultancy since 2011 with a special focus on dispute resolution and auditing. With AURIGON LRC an intermediary for litigation funding has been launched servicing our clients out of Argentina, Chile, Brazil and Switzerland in Spanish, English, Portuguese and German. With our experience setting up the first Swiss litigation fund dedicated to Latin America (founded 2018), and in the insurance advisory area (since 2011), we are bringing together knowledge of processes and mindsets of the funding and the insurance world. 

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