Having been dispensed with by Courts in England and New Zealand, there have been concerns in some corners that the High Court of Australia might follow suit and consign advocate's immunity to the legal dustbin. This concern was heightened for some when special leave was granted late last year to challenge a decision of the NSW Court of Appeal applying the immunity.
Pleasingly (at least) for advocates, the High Court in in Attwells v Jackson Lalic Lawyers Pty Limited  HCA 16 (“Attwells”) declined to follow their judicial brethren overseas. However, the High Court did take the opportunity to further ring fence the scope of the immunity by making it clear that the immunity did not extend to the settlement or compromise of a dispute.
The two key takeaways from the High Court’s decision are:
- The court declined to revisit the immunity despite the Applicant submitting that it should be abolished; and
- The immunity does not apply to settlements.
It is important that those involved in litigation take careful note of this decision. No longer will work around the settlement or compromise of a dispute be protected by the immunity. As such, it is important that special care is taken around any work done to bring about the compromise of a dispute. That may well translate into settlements taking longer to bring to finality - something practitioners, courts and clients alike should acknowledge.
For more analysis of the decision, continue reading below.
What is Advocate’s Immunity
“Advocate’s Immunity” provides a lawyer with immunity from suit for, broadly speaking, claims arising from the lawyer’s conduct of litigation. It is important to note the immunity is not an absolute immunity for all claims arising from the conduct of litigation. The rationale for the immunity is to ensure certainty and finality of judicial decisions. It avoids the risk of re-litigating an already determined issue by way of a collateral attack on the work of the advocate.
Before Attwells, the two leading and oft-quoted Australian decisions on advocate’s immunity were D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 (“D’orta”) and Giannarelli v Wraith (1988) 165 CLR 543 (“Giannarelli”). In Giannnarelli, the High Court held that the immunity extended to protect decisions outside of court that affected the conduct of the case in Court. Mason CJ said “it would be artificial in the extreme to draw the line at the courtoom door” and explained further that often preparation of a case “out of court cannot be divorced from the presentation in court”.
Subsequently in D'orta, the High Court again considered the scope of the immunity, declined to abolish it and confirmed that the statement by Mason CJ remained good law.
Issue before the Court
The issue before the High Court in Attwells was whether or not advocate’s immunity extended to advice given outside of Court which leads to or results in a settlement of a caseby agreement between the parties. The High Court was also asked to again consider abolishing advocate’s immunity, and thereby overturn its decisions in D’orta and Giannarelli.
Advocate's immunity remains good law
By majority (French CJ, Kiefel, Bell, Gageler, and Keane JJ), the High Court, declined to abolish advocate’s immunity. The minority (Nettle J and Gordon J) delivered separate judgments also declining to abolish the immunity.
The majority commented that a change of such proportions was "best left to the legislature". Further rationale for this decision appears to be that much the same issues had previously been argued before the Court in Giannarelli and D'orta. The majority summarised the important public policy and common law principles which underpin advocate’s immunity; including the finality of the resolution of disputes by the courts, the consistency and continuity of the law, and the injustice that would result to those parties who have never pursued claims or lost cases based on the state of the law as it was.
The immunity does not extend to settlements or compromises
Whilst the immunity remained, the High Court took the opportunity to clarify that its scope did not extend to many settlements or compromises. That is because the immunity does not extend to advice which does not move the case in court towards a judicial decision. In that sense the “intimate connection required to attract the immunity is a functional connection between the Advocate’s work and the judge’s decision” and a settlement was an agreement between litigants which did not involve (at least in Attwells) a judicial determination.
On the basis of the majority judgment, there is a significant difference between advice given by a legal professional out of court about settlement by agreement between the parties, and advice given to a party about how they should run their case in court. The former does not necessarily require the Court to exercise any judicial power, where in the latter it affects the way the case is conducted so as to effect its outcome by judicial determination.
Justices Nettle and Gordon gave separate judgements and would have allowed the appeal on the basis that the lower court had made an order (i.e. a consent order recording the terms of settlement) which affected the parties’ rights and liabilities and had therefore exercised a judicial function. For this reason, the advice of the solicitor did move the proceeding towards the exercise of a judicial power and they found ought be covered by the immunity. In Justice Nettle’s view, not to allow the immunity to apply to agreed settlements would mean that those controversies could be reopened which is the very mischief that advocate’s immunity is meant to avoid.
Do all settlements/compromises fall outside the immunity?
It seems, however, that much like Orwell's pigs, not all settlements or compromises are created equal in the eyes of the immunity. For example, advice given in connection with a guilty or not guilty plea was found to fall within the ambit of the immunity (indeed that had been the very issue in D'orta). The rationale for this was that the plea was intimately connected with the hearing or a charge and determination of a criminal matter by a court and that some judicial determination was required on whether to accept a plea.
The High Court's approach to criminal compromises could apply to some civil penalty proceedings. The primary question would be whether the compromise lead to some exercise of judicial determination.
Other compromises or settlements that require some exercise of judicial power were also (briefly) mentioned. For example, the majority decision referred to proceedings brought on behalf of legally incapacitated persons and compromises of certain debts under theCorporations Act. Whilst the majority acknowledged that such cases involved “the exercise of judicial power”, they declined to consider such cases. Whether such compromises might fall within the immunity was left for another day although the argument appears open that if there is exercise of judicial power, the immunity could apply.
What about class actions?
The Court also expressly acknowledged that the settlement of representative proceedings was an example where the making of a settlement order involved the exercise of judicial power but declined to consider the issue. The position therefore is as for other compromises, namely if there is exercise of judicial power, the immunity could apply although there is clear room for argument over the scope of any immunity.
Practical issues and implications
Litigators must take careful note of this decision. Litigators must (if they did not do so before) carefully consider the advice they provide on settlement, and on the manner in which a settlement is affected by the parties and the Court. No longer will work around the settlement or compromise of a dispute be protected by the immunity.
Settlements may well now take more time to achieve - particularly those arrived at "on the steps of court". A short delay is, however, a small price to pay for litigators providing and clients receiving proper and appropriate advice as well as for settlements to be properly structured.