Australia: Attwells v Jackson Lalic: A Shock To Lawyers' Immune Systems

While there were no heroes, villains or shootings in Canberra last Wednesday morning, there was a partial revocation of the immunity from suit previously afforded to solicitors. This was far from a wholesale removal of the immunity, but is a departure from the recent trend towards expanding, rather than contracting, the reach of advocate's immunity.

Advocate's Immunity in the High Court of Australia

Frequent film-goers, and fans of the Lethal Weapon series of movies, may recall a scene from Lethal Weapon 2, set on a ship owned by the villain of the piece. The villain, a member of a foreign embassy, openly commits a heinous crime in full view of the hero, a police officer, played by Mel Gibson. He holds up his passport, saying to the hero "Diplomatic Immunity!" Unfazed by this perplexing legal and diplomatic situation, our hero shoots the villain between the eyes, adding for the audience's benefit:  "It's just been revoked".

In recent times, advocate's immunity has been a potent defence for lawyers against lawsuits arising from work "intimately connected" with courtroom litigation. In some cases it has been held to extend further than the court itself, to the conduct of a lawyer outside the courtroom if that conduct led "to a decision affecting the conduct of the case in court"1. The immunity principle was a substantial hurdle to prospective plaintiffs seeking redress for their lawyer's negligent court-related conduct.

Rationale

The central justification for the immunity is the principle of finality of judicial decisions, which is:  

"[T]hat controversies, once resolved, are not to be reopened except in a few narrowly defined circumstances. This is a fundamental and pervading tenet of the judicial system, reflecting the role played by the judicial process in the government of society." 2

Otherwise, to allow a negligent lawyer's disappointed client to sue for work the lawyer has done, which has affected the way the Judge decided their case, leaves the judgment open to "collateral attack" and another episode of judicial consideration.

In Australia, the principle received official recognition by the High Court in Giannarelli v Wraith3 in 1988.  Since that time it has been applied by the Courts to determine many negligence claims against solicitors.  Recent examples of these unsuccessful claims include alleging negligence in respect of:

  • advice relating to the existence of a settlement offer and the quantum of a claim4];
  • advice leading to the settlement of a claim5;
  • advice on the prospects of success before proceedings are commenced6;
  • failing to include a remedy and party in proceedings7; and
  • failing to follow a client's direct instructions during criminal proceedings.8

Most notable of the recent NSW cases was Donnellan v Woodland.9 This concerned the alleged negligent advice surrounding an offer of compromise. The claimant brought an action of negligence against his lawyer, who allegedly incorrectly advised him about a settlement offer.  The advice was that his in-court prospects of success were strong and was silent on the possibility of paying the Council's costs if he lost. The Court of Appeal applied the test in D'Orta, which was whether the alleged negligence was conduct that led to a decision affecting the conduct of the matter in court. The lawyer's advice about the offer led to the claimant's decision about whether to continue the proceedings. Accordingly, Beazley JA found that the solicitor was entitled to the benefit of advocate's immunity.

Attwells v Jackson Lalic

Attwells & Anor v. Jackson Lalic Lawyers Pty Limited (Attwells) was commenced in the NSW Supreme Court and appealed from the NSW Court of Appeal to the High Court. The decision of the High Court majority delivered on 4 May 2016 marks a curtailment rather than an abolition of the advocate's immunity principle. 

Those following the case closely would have expected that change may be afoot, based on the appointment of a seven judge bench to hear the appeal and the rapid progress it made through the special leave application stage, the hearing of which took all of 26 minutes. These factors suggested that there was a strong possibility of a serious reconsideration of the reach of the advocate's immunity principle.

The case itself revolved around the alleged negligent settlement of guarantee proceedings. The plaintiffs were guarantors for a company Wilbidgee Beef Pty Ltd (Wilbidgee Beef) for a loan of AUD 1.5 million.

Wilbidgee Beef defaulted on its AUD 3.4 million debt it owed to the Bank. The Bank sued Wilbidgee Beef and its guarantors in Court to enforce payment. At the time proceedings were commenced, the Bank estimated that the guarantors owed it a total of AUD 1,856,122.

The lawyers for the guarantors informed the Court that the proceedings had been settled in favour of the Bank. The alleged negligence related to this settlement and the consent orders entered into on behalf of the guarantors. In essence the guarantors' lawyers reached a deal with the Bank that AUD 1.75m would be paid within approximately five months of the settlement, in default of which the Bank would be free to enforce the agreed judgment in its favour against Wilbidgee Beef and the guarantors for the full amount owing – roughly AUD 3.4m.

The AUD 1.75m was not paid within the agreed timeframe and the Bank commenced enforcement proceedings against the guarantors. The guarantors then sued their lawyers, alleging that the advice they gave in relation to the settlement agreement was negligent.

The guarantors were unsuccessful in the NSW Supreme Court and the NSW Court of Appeal due to the application of advocate's immunity. Their argument in the High Court was essentially that the main authorities supporting advocate's immunity – specifically Giannarelli and D'Orta – should be reconsidered or, in the alternative, that the immunity should be narrowed in scope to not cover advice pertaining to the settlement of disputes.

The five judge majority of the High Court rejected the Appellant's argument that Giannarelli and D'Orta should be reconsidered. The primary reason for the retention of the immunity in those two cases was held to be the importance of the principle of finality. It "reflects the strong value attached to the certainty and finality of the resolution of disputes by the judicial organ or the State"'10 as well as the "role of the advocate engaged, as an officer of the court, in the exercise by the court of judicial power to quell a controversy"'11.

The Court's focus on retaining the immunity led to the eventual conclusion that the "scope of the immunity for which D'Orta and Giannarelli stand is confined to conduct of the advocate which contributes to a judicial determination".12

In other words, because the immunity exists to protect the finality of judicial decisions, it can only attach to "conduct of the advocate which contributes to a judicial determination".13

Any privilege enjoyed by lawyers in respect of the immunity was held by the High Court to be an 'incidental operation' and a 'consequence of, and not the reason for, the immunity.'14

As the settlement and consent orders in Atwells did not move the case towards judicial determination, but instead reflected a voluntary agreement between the parties, it was held to be outside the scope of the immunity. The "intimate connection" that was said to be required to attract the immunity in D'Orta, was elaborated by the Majority in Atwells to involve a "functional connection between the advocate's work and the judge's decision"15 and this was not present in the advice given by the lawyers.

What this means for advocates and their work in settling litigation is not exactly clear. The question of whether this exemption to immunity will be confined to cases where there is absolutely no judicial input on settlement was specifically left open by the majority but was considered in some detail in the two minority judgments.

It is also unknown whether the specific facts of this case, where the agreement reached was said to create a "new charter of rights"[16] (as the liabilities agreed to were not those that were being decided in the case that was settled), further narrows the application of this exception to the immunity.

Only time will tell how much the immunity has been eroded; however, at this stage it seems Australia is not looking likely to follow the lead of other common law countries like New Zealand, England, Canada, South Africa and the United States, who have completely done away with the immunity.

It remains to be seen whether advocate's immunity will, like the Lethal Weapon series, become a continuing saga, or whether Attwells has brought the advocate's immunity "franchise" (to borrow a movie-goers phrase) to a close. Time will tell. 

Footnotes

1 Giannarelli v Wraith (1988) 165 CLR 543 at 560 per Mason CJ.

2 D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12 at [45]

3 (1988) 165 CLR 543

4 Kendirjian v Lepore [2014] NSWDC 66

5 Stillman v Rushbourne [2014] NSWSC 730; Young v Hones [2013] NSWSC 1429

6 Bird v Ford [2014] NSWCA 242

7 White v Forster [2014] NSWSC 1767

8 Gillies v Brewer [2014] NSWSC 1198

9 [2012] NSWCA 433

10 Attwells & Anor v. Jackson Lalic Lawyers Pty Limited [2016] HCA 16 at [30]

11 Ibid [33]

12 Ibid [37]

13 Ibid

14 Ibid [52]

15 Ibid [5]

16 Ibid [55].

Attwells v Jackson Lalic: A Shock To Lawyers' Immune Systems

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.