The High Court of Australia in Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29 has held that the so-called ‘Chorley exception’, a rule of practice which entitles a self-represented litigant who is a solicitor to recover professional costs, was not only anomalous and should not be extended by judicial decision to the benefit of barristers who represent themselves but that it was an affront to the fundamental value of equality of all persons before the law, could not be justified by policy considerations and should not be recognised as part of the common law of Australia. Accordingly, the High Court overruled the decision of the New South Wales Court of Appeal in Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 (summarised by K Ottesen on 6 August 2018) which had applied the exception to a self-represented barrister.
Chorley exception
The Chorley exception was introduced by London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872 (“Chorley”) and is an exception to the general rule that a self-represented litigant is not entitled to professional costs for acting for himself or herself in legal proceedings. The Chorley exception came to be applied in Australia, most notably, by the High Court in Guss v Veenhuizen (No 2) [1976] HCA 57; (1976) 136 CLR 47 (“Guss”).
Nevertheless, doubts were raised about the application of the exception. In Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403 (“Cachia”), a majority of the High Court described the exception as “somewhat anomalous”, as having a “somewhat dubious” and “unconvincing” justification for its existence, and as being “limited and questionable”.
As to whether the exception applied or extended to barristers, there had been some judges who had been prepared to apply the exception, or, at least, to assume that it applied, to self-represented barristers, while other judges had refused to so apply it.
Background to the proceedings
The background to Bell Lawyers Pty Ltd v Pentelow was that a barrister had sued an incorporated solicitors’ practice for unpaid fees. The barrister was legally represented in the proceedings against the solicitors but had undertaken certain preparatory legal work on her own behalf including drawing affidavit evidence, compiling written submissions, advising senior counsel and representing herself at directions hearings. The barrister was ultimately successful in the proceedings and received a costs order in her favour. The barrister then claimed costs for the legal work which she had personally undertaken in the proceedings but these were disallowed by a costs assessor and, on appeal, by a Review Panel. An appeal by the barrister to the District Court of New South Wales was dismissed and the barrister had then sought judicial review of the District Court decision in the Court of Appeal. A majority of the Court of Appeal then held that the barrister was entitled to rely on the Chorley exception because the barrister’s work could be measured or quantified by the same processes as the work of solicitors. By grant of special leave, the solicitors appealed to the High Court.
High Court decision
Plurality
Kiefel CJ, Bell, Keane and Gordon JJ in a joint judgment first considered and then rejected the reasons which were said to support the Chorley exception. The key points made by the plurality were to the following effect (at [17]-[25]):
- It was not self-evidently true that it was a benefit to the other party that a solicitor represented himself or herself in litigation because the expense to be borne by the losing party could be expected to be less than that which otherwise would be borne if an independent solicitor were engaged. A self-represented solicitor could lack objectivity due to self-interest which could, in turn, lead to higher legal costs being passed on to the other party should the self-represented solicitor obtain an order for his or her costs.
- Moreover, the view that solicitors should be encouraged to represent themselves was contrary to the modern orthodoxy that, as a matter of professional ethics, it was undesirable for a solicitor to represent himself or herself in litigation. In such a case, there could not be independent and impartial advice. This view was reflected in those rules of the Australian Solicitors’ Conduct Rules (adopted by most jurisdictions including New South Wales) and equivalent rules in other jurisdictions requiring solicitors in matters before a court to exercise forensic judgments independently of the client and to not appear as an advocate for the client in a hearing where the solicitor was a material witness in the client’s case.
- The rationale for the exception – that the value of legal services rendered by a solicitor to himself or herself could be measured or quantified whereas the value of work or time by a layman could not be measured or quantified – was not persuasive and did not justify an exception to the general rule that a self-represented litigant was not entitled to obtain any recompense for his or her time spent on litigation. The general rule was not based on a concern about the difficulty of valuing the amount of recompense but, as explained in Cachia, was confined by the concern that an order for costs provide the successful party with partial indemnity against the expense of professional legal costs actually incurred in the conduct of litigation. In addition, as had also been noted in Cachia, this rationale for the exception ignored the questionable nature of a situation in which a successful solicitor litigant might not only receive the amount of the verdict but might also actually profit from the conduct of the litigation.
- Further, there was no reason why the reasonable value of the work or time of any litigant could not be measured or quantified. To act upon a principle that evidence enabling the measurement or quantification of the value of the work or time of non-solicitor litigants in person should not be accepted by the courts would exalt the position of solicitors in the administration of justice to an extent that was an affront to equality before the law.
- There was an air of unreality in the view that the Chorley exception did not confer a privilege on solicitors in relation to the conduct of litigation. It patently was a privilege and was inconsistent with the equality of all persons before the law.
The plurality then considered whether the Court should depart from the authority of Guss by abandoning the Chorley exception and concluded that (at [30]-[38]):
- Guss had proceeded upon an uncritical acceptance of the authority of Chorley, which itself had departed from principle in several respects, and so did not establish a principle carefully worked out in a succession of cases; and
- the recognition of the Chorley exception in Guss had achieved no “useful result” as indicated by the criticisms in Cachia, criticisms which, importantly, had included that the Chorley exception involved inequality before the law.
Accordingly, the plurality said that, in the absence of a compelling reason to the contrary, the Court should hold that the Chorley exception was not part of the common law of Australia (at [39]).
The plurality then considered various arguments advanced by the barrister but found that there was no compelling reason for the Court to refrain from holding that the Chorley exception was not part of the common law of Australia (at [40]-[56]):
- The barrister had argued that the definition of “costs” in s 3(1) of the Civil Procedure Act 2005 (NSW) encompassed costs within the Chorley exception. However, the plurality said that the definition of “costs” in s 3(1) left no room for the Chorley exception as a matter of legislative intention.
- It had also been argued by the barrister that serous inconvenience would arise in relation to the use of in-house solicitors by governments and others, if the Chorley exception was not part of the common law. The plurality rejected this argument saying that a decision to abandon the Chorley exception would not disturb the well-established understanding in relation to in-house solicitors, that where such a solicitor represented his or her employer in proceedings the employer was entitled to recover costs in circumstances where an ordinary party would be entitled to do so by way of indemnity. However, the plurality went on to indicate that a solicitor employed by an incorporated legal practice of which the solicitor was the sole director and shareholder might be in a different position and that whether or not such an incorporated legal practice should be able to obtain an order for costs for work performed by its sole director and shareholder was ultimately a matter for the legislature.
- A further argument by the barrister had been that the task of abandoning the Chorley exception was a task more appropriately dealt with by the legislature or rules committee of a superior court. The plurality, however, said that the Chorley exception was the result of judicial decision and, accordingly, it was for the High Court to decide whether it should be recognised in Australia.
- Finally, it had been argued by the barrister that if the Court were to alter or abrogate the Chorley exception, such a change should only operate prospectively so that the Court of Appeal’s decision would not be disturbed. The plurality, however, said that if an earlier case was wrong and required overruling, then to maintain in force that which was acknowledged not to be the law would be a perversion of judicial power.
Accordingly, the plurality concluded as follows (at [3] (footnotes have been omitted); see also [57]):
“The Chorley exception has rightly been described by this Court as ‘anomalous’. Because it is anomalous, it should not be extended by judicial decision to the benefit of barristers. … Dealing with the matter more broadly, however, the Chorley exception is not only anomalous, it is an affront to the fundamental value of equality of all persons before the law. It cannot be justified by the considerations of policy said to support it. Accordingly, it should not be recognised as part of the common law of Australia.”
Other judges
Gageler J (at [63]) and Edelman J (at [99]) agreed with the plurality that the Chorley exception should not be recognised as part of the common law of Australia. Nettle J (at [70] and [79]) agreed with the plurality that the Chorley exception did not extend to barristers but, unlike the plurality and Gageler and Edelman JJ, considered that there was no need or justification to decide that the Chorley exception should be abolished.
