The High Court of Australia in Kendirjian v Lepore [2017] HCA 13 has refused to distinguish the reasoning of the majority in Attwells v Jackson Lalic Lawyers Pty Limited [2016] HCA 16; (2016) 331 ALR 1 (“Attwells”) in a case of alleged negligent advice to reject an offer of settlement which resulted in the matter proceeding to a judgment which was less favourable than the offer, with the result that such advice was not subject to the advocate’s immunity from suit. The High Court also refused to reopen part of the decision in Attwells.
The client had brought proceedings in the District Court of New South Wales seeking damages for personal injuries he had sustained in a motor vehicle accident. The defendant had admitted liability so the only matter in issue was the assessment of the damages. On the first day of the hearing, the defendant made an offer of settlement which was rejected. The hearing proceeded and the judge awarded damages to the client in an amount which was substantially less than the amount of the settlement offer. In assessing the damages, the judge considered that the client had exaggerated or misstated the extent of his disability. An appeal by the client to the Court of Appeal was dismissed.
The client subsequently brought negligence proceedings in the District Court of New South Wales against the solicitor and barrister who had represented him in the personal injury proceedings. His allegations included that, while he had been advised by the lawyers that a settlement offer had been made, he had not been advised of the amount of the offer, and that the lawyers had rejected the offer as too low without his express instructions. The client sought damages which were apparently calculated by subtracting the amount awarded in the personal injury proceedings from the settlement offer plus costs. The lawyers applied for summary judgment and the District Court granted this on the basis that the lawyers were immune from liability in negligence. This decision was upheld by the Court of Appeal. The client sought special leave to appeal to the High Court which was later granted. In the meantime, the High Court decided Attwells and clarified the scope of the doctrine of the advocate’s immunity from suit. Following the decision in Attwells, the solicitor consented to orders in the High Court which included allowing the client’s appeal insofar as it related to him and remitting the balance of the matter to the District Court. However, the barrister submitted that the reasoning in Attwells could be distinguished or, alternatively, that part of the decision in Attwells should be reopened.
The High Court (Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ) unanimously allowed the appeal in relation to the barrister and remitted the balance of the matter to the District Court.
Development of the doctrine of the advocate’s immunity
At [28]-[32], Edelman J summarised the development of the doctrine of the advocate’s immunity in the following terms:
- In a passage in Giannarelli v Wraith [1988] HCA 52; (1988) 165 CLR 543 (“Giannarelli”), Mason CJ explained the boundaries of the advocate’s immunity by saying that preparation of a case out of court and presentation in court were inextricably interwoven so that the immunity extended to “work done out of court which leads to a decision affecting the conduct of the case in court” but that (agreeing with and quoting McCarthy P in Rees v Sinclair [1974] 1 NZLR 180 at 187) the protection existed only where the particular work was so intimately connected with the conduct of the cause in court that it could fairly be said to be a preliminary decision “affecting the way that cause is to be conducted when it comes to a hearing”.
- In D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 (“D’Orta”), a majority of the High Court saw no reason to depart from the test described in Giannarelli and summarised that test as work done in court or, quoting from part of the passage from Mason CJ, “work done out of court which leads to a decision affecting the conduct of the case in court”, or work intimately connected with work in a court.
- In Attwells, a majority of the High Court refused to extend the immunity to acts or advice of an advocate which did not move litigation towards a judicial determination, repeated the comments from D’Orta that there was no reason to depart from the test described in Giannarelli, and quoted the whole of the passage from Mason CJ in Giannarelli. The majority explained that, since it was the participation of the advocate as a court officer in the quelling of controversies by the exercise of judicial power which attracted the immunity, it followed that the immunity did not extend to advice that led to a settlement agreed between the parties. Advice resulting in a settlement of a dispute could not lead to the possibility of a collateral attack upon a non-existent exercise of judicial power to quell controversies. Therefore, the test concerning “work done out of court which leads to a decision affecting the conduct of the case in court”, or which was intimately connected with work in court, was not satisfied merely because there was a plausible historical connection between an advocate’s work and a client’s loss – it required that there be a functional connection between the advocate’s work and the determination of the case by the court.
- The majority in Attwells rejected a submission that an anomaly would arise if the immunity did not cover negligent advice which led to a settlement of the proceeding, but did cover negligent advice not to settle a proceeding which led to a judicial decision. The majority said that the assumption underlying this submission was that the immunity would extend to negligent advice not to settle a proceeding because that advice was intimately connected with the ensuing judicial determination. The majority rejected the assumption on the basis that negligent advice not to settle a proceeding only gave rise to an historical connection between the negligent advice and the continuation of the litigation. The majority then concluded that the giving of advice either to continue or to cease litigating did not itself affect the judicial determination of a case.
Could Attwells be distinguished?
The barrister sought to distinguish Attwells on the basis that the negligence proceedings could involve departing from the reasoning of the courts in the personal injury proceedings because the lawyers could seek to use the adverse findings about the client’s credibility to explain why the judgment awarded was much lower than the settlement offer.
Edelman J rejected this submission at [34] on the basis that, while the client was relying on the decision in the personal injury proceedings to prove his alleged loss, issues concerning the reasonableness of advice given by the lawyers would be determined at the time the advice was given and not at the time of the judgment in the personal injury proceedings and would not involve any consideration of whether the judgment in the personal injury proceedings was right or wrong, whether in relation to credibility or otherwise.
Edelman J also said at [35] that, should the lawyers challenge the credibility of the client concerning what the client had said to them about his disability, this challenge, being in separate proceedings and based on separate evidence, would be independent of the different credibility findings made in the personal injury proceedings and would not call into question any of those findings.
Accordingly, his Honour concluded that the reasoning of the majority in Attwells required that the appeal be allowed.
Should Attwells be reopened?
The alternative submission by the barrister was that the part of the decision in Attwells where the majority had approved the remarks of Mason CJ in Giannarelli which had relied upon Rees v Sinclair, should be reopened. It was submitted that that part of the quotation from Mason CJ had not been approved by D’Orta and that, accordingly, the scope of the immunity extended to “work done out of court which leads to a decision affecting the conduct of the case in court” but not to work done “affecting the way that cause is to be conducted when it comes to a hearing”.
Edelman J described this distinction at [38] as “illusory”, saying that, in relation to work done out of court, there was no real distinction between work done which led to a decision affecting the conduct of the case in court and work done affecting the way that case was to be conducted at a hearing and that a decision affecting the way that a case was conducted was the principal, or possibly only, method by which an advocate affected the conduct of a case in court. His Honour went on to say at [39] that, in any event, such a distinction was not evident in D’Orta.
Accordingly, his Honour rejected the submission that Attwells should be reopened.
Other judges
Kiefel CJ and Bell, Gageler and Keane JJ agreed with Edelman J.
Nettle J (at [5]-[9]) and Gordon J (at [10]-[16]) agreed with Edelman J that, in light of the majority’s reasoning in Attwells, the appeal had to be allowed but did not agree that the client’s negligence proceedings did not give rise to a possibility of a challenge to the findings in the personal injury proceedings, for reasons which were largely consistent with the views expressed by these judges in Attwells.
For a detailed summary of Attwells, see K Ottesen, “Attwells v Jackson Lalic Lawyers Pty Limited – High Court retains advocate’s immunity from suit but holds that out of court settlements are outside its scope”, 18 May 2016.
