The High Court of Australia has unanimously stood by its most recent decision on advocates’ immunity in Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 (Attwells), which held that the immunity does not extend to negligent advice on settlement offers and they do not affect the judicial determination of the case.

In Kendirjian v Lepore [2017] HCA 13 (Kendirjian), the High Court declined to distinguish or reopen Attwells and allowed an appeal, remitting the case back to the District Court of NSW. Kendirjian confirms that the immunity still does not apply to settlements. As set out in our previous article, this means that special care should be 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.

Our earlier article summarising the High Court’s finding in Attwells, and providing some background on advocate’s immunity, can be found here.

Key points

The main takeaway from Kendirjian is that the High Court is unlikely to depart from its Attwells decision anytime soon. The Court declined to:

  1. distinguish the current case from Attwells – the negligence action against the lawyers does not give rise to the possibility of any challenge to the findings of the court in the personal injury proceedings (explained below); and
  2. reopen Attwells – the second respondent had not relied on any of the principles usually considered when deciding to reopen a decision and his submission was premised on an “illusory distinction”.

The case is a reminder that whilst there are important public policy principles which underpin advocate’s immunity (such as the finality of the resolution of disputes by the courts and the consistency and continuity of the law), to take the immunity any further than work which leads to a decision affecting the conduct of a case in court (such as a settlement offer) would, as Mason CJ famously stated, “entail a risk of taking the protection beyond the boundaries of the public policy considerations which sustain the immunity”.

What happened?

The appellant, Mr Kendirjian, brought a claim against his solicitor (Mr Lepore, the first respondent) and barrister (Mr Conomos, the second respondent). Mr Kendirjian alleged that the respondents were negligent in advising him in relation to an offer for settlement in a personal injury proceeding in which they represented him. The offer was made on the first day of the District Court trial in August 2006. In that trial, Mr Kendirjian obtained judgment for a sum much less than the offer made.

Mr Kendirjian's allegations against his lawyers included that they advised him that a settlement offer had been made but that they did not advise him of the amount of the offer, and that they rejected the offer as being "too low" without his express instructions.

The primary judge granted summary judgment on the basis that the respondents were immune from the alleged liability for negligence. That decision was upheld by the NSW Court of Appeal. Both decisions relied upon earlier decision of the NSWCA in Donnellan v Woodland (2013) ANZ ConvR 13-001 (“Donnellan”).

After these decisions, the High Court decided Attwells. Following Attwells (where the majority had explained that it was difficult to envisage how the immunity could ever extend to advice not to settle a case), Mr Lepore consented to orders allowing the appeal in relation to him, but Mr Conomos did not. Mr Conomos submitted that the reasoning in Attwells could be distinguished or, alternatively, that part of the decision should be reopened.

What the Court said

Whilst Edelman J (with whom the rest of the bench largely agreed) did not dispute the reliance in the earlier decisions on the case of Donnellan, his Honour did state that the conclusions in those cases that the immunity was engaged “are inconsistent with the course of the development of the principle of advocate’s immunity”.

His Honour then went through the oft-cited cases of D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 (D’orta”) and Giannarelli v Wraith (1988) 165 CLR 543 (“Giannarelli”) in light of the decision in Attwells, which explained the rationale for the immunity when declining to extend it to compromises. That is, that since the immunity attaches by the "participation of the advocate as an officer of the court in the quelling of controversies by the exercise of judicial power", the immunity did not extend to advice that leads to a settlement between the parties which does not involve the exercise of judicial power.

His Honour declined to distinguish or reopen Attwells, allowing the appeal and remitting the balance of the matter to the District Court of NSW.

a. Why Attwells is not distinguished

Mr Conomos relied on the reasoning of Macfarlan JA in the Court of Appeal decision where his Honour said that Mr Kendirjian’s negligence action could involve departing from the views expressed by the Court in the personal injury proceedings as the respondents might seek to use adverse findings about Mr Kendirjian’s credibility to explain why the judgment awarded was much lower than the settlement offer.

However, Edelman J held that this was not the case and that issues concerning the reasonableness of advice given will be assessed at the time the advice was given, not at the time of the District Court judgement. He also held that nothing in Mr Conomos’ defence raised any suggestion of a challenge to the District Court decision.

Nettle J disagreed on the point in relation to the challenging of the findings and found that Mr Kendirjian’s negligence action against the respondents could have given rise to a possibility of a challenge to the findings of the District Court (i.e. a re-litigation of the strength of the plaintiff’s claim, the weight given to evidence taking into account credibility etc). Notwithstanding this, his Honour still agreed with the orders proposed by Edelman J.

This still leaves unanswered the issue where a lawyer, not a party to the main proceedings, asserts the decision was wrong. Re-opening litigation is the evil that advocate's immunity seeks to cure. We shall have to await a case with such facts before the High Court.

b. Why Attwells is not reopened

Mr Conomos also sought to reopen the part of the decision in Attwells where the joint judgment approved the remarks of Mason CJ which had relied on the remarks of McCarthy P in Rees v Sinclair (a 1974 NZ decision). Because, he submitted, that the part of the quotation from Mason CJ in Giannarelli had not been approved in D’Orta, the scope of the immunity should extend to “work done out of court which leads to a decision affecting the conduct of the case in court” but not work done “affecting the way that cause is to be conducted when it comes to a hearing”.

The submission, which relied on the reasoning of Macfarlan JA in the Court of Appeal case, was rejected. This was because:

  1. the decision was given prior to Attwells;
  2. Mr Conomos did not refer to any of the principles commonly considered by the Court in deciding whether to reopen a previous decision;
  3. the distinction between work done which leads to a decision “affecting the conduct” of the case in court and work done “affecting the way” that case is to be conducted at hearing is an “illusory” one; and
  4. no submission had been made in D’Orta that some parts of the passage from Mason CJ (such as the words ‘affecting the conduct of the case’) should be accepted, but other parts (such as the words “the way that cause is to be conducted”) should not.