Australia: High Court rules on advocate immunity

Last Updated: 24 July 2016

KEYWORDS: ADVOCATES' IMMUNITY
KEY TAKEAWAYS

The advocate's immunity from suit does not extend to negligent advice which leads to the settlement of a case by agreement between parties.

D'Orta-Ekenaike v Victoria Legal Aid 1 (D'Orta) and Giannarelli v Wraith2 (Giannarelli) remain good authority on the scope of the immunity.

Existing authorities

There are two existing High Court authorities on the limited circumstances in which lawyers can be sued for their advocacy:

  1. Giannarelli established that there is an immunity that extends to "work done out of court which leads to a decision affecting the conduct of the case in court".
  2. D'Orta held that the advocate's immunity from suit under the common law extends to protect a solicitor involved in the conduct of litigation in court.

The scope of the immunity under these authorities was challenged in these proceedings.

Facts

The appellants claimed that earlier litigation to enforce a guarantee was settled on terms unfavourable to the first appellant as a result of negligent advice from the respondent, who was his solicitor at the time.

Specifically, the respondent had advised his clients to agree to a settlement offer that included filing consent orders. In return for extra time to pay their true debt, the guarantors agreed to consent to a judgment for the total indebtedness of the company with a collateral agreement that the judgment would not be enforced should the amount owed under the guarantee (which was less than the agreed judgment) be paid within that extended time. The lesser guaranteed amount was not paid in time, meaning the guarantors became liable for the full judgment amount.

The respondent raised the advocate's immunity from suit as a complete answer to the negligence claim, contending that the immunity extends not only to negligent advice which leads to a final judicial determination, but also to negligent advice which leads to an agreed settlement.

The New South Wales Court of Appeal (NSWCA) found that the respondent's advice was within the immunity recognised in Giannarelli, which was therefore a complete answer to the negligence claim. This decision was appealed to the High Court.

The Law Society of NSW obtained leave to intervene in the High Court proceedings. Its submissions supported the more liberal interpretation of the immunity taken by the NSWCA.

Decision

What is the scope of the advocate's immunity?

The majority — French CJ, Kiefel, Bell, Gageler and Keane JJ — allowed the appeal. Their Honours held that the test for the application of the advocate's immunity as stated in D'Orta and Giannarelli is not satisfied where the advocate's work leads litigating parties to settle their dispute.

Advice to cease litigation which leads to a settlement was held to be connected in a general sense to the litigation contemplated by the agreement, but was held not to be "intimately" connected with a decision of the court. The intimate connection required to attract the immunity was held to be a functional connection between the advocate's work and the judge's decision. That is, the immunity's protection can only be invoked where the advocate's work has contributed to the judicial determination of the litigation.

Consent orders

The majority found that their conclusion was not altered by the fact that the parties' agreement was embodied in consent orders. Their Honours held that the connection between advice in relation to settlement (including negligent advice not to settle) and the ensuing outcome of litigation was merely historical and not sufficient to enliven the immunity.

Gordon and Nettle JJ both dissented on this point, finding that the work done in agreeing the consent orders went directly to the quelling of the proceedings. They found that it was intimately connected with the work of the Court as the case ended when the Court gave verdict and judgment in respect of the consent orders.

Reconsideration of Giannarelli and D'Orta

The High Court declined to reconsider either of the existing authorities dealing with the extent of the advocate's immunity.

To reconsider the previous High Court decisions would "generate a legitimate sense of injustice" in litigants who have not pursued claims, or who have lost cases on the basis of the law as settled by these authorities.3

The High Court re-iterated that the basis of the immunity is protecting the finality and certainty of judicial determinations.

http://eresources.hcourt.gov.au/ downloadPdf/2016/HCA/16

Footnotes

1 (2005) 223 CLR 1
2 (1988) 165 CLR 543
3 At [28]

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.

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