In May 2016, we commented on the High Court of Australia’s decision in Attwells v Jackson Lalic[1] and made reference to the different type of immunity featured in the Lethal Weapon movie franchise (see link at bottom of page). “Attwells: Advocates’ Immunity I” has now been followed by “Kendirjian: Advocates’ Immunity II” in the High Court’s own “franchise” of advocates’ immunity decisions.

Background

In 1999, Mr Kendirjian (the appellant) was injured in a motor vehicle accident. In 2004, he commenced proceedings against the driver responsible for the accident. On the first day of the trial, the driver responsible made a settlement offer of AUD 600,000 plus costs to Mr Kendirjian's solicitor (the solicitor) and barrister (the barrister). However, the solicitor and barrister rejected the offer as being "too low". The trial proceeded and Mr Kendirjian was awarded AUD 308,432.75 plus costs.

In 2012, Mr Kendirjian sued the solicitor and barrister for negligence, alleging that they had been negligent in their handling of the settlement offer. Mr Kendirjian alleged that, although his barrister and solicitor advised him that a settlement offer had been made, they failed to advise him of the amount of the offer and rejected the settlement offer without his express instructions.

Mr Kendirjian's negligence action was initially unsuccessful, with the NSW District Court and the Court of Appeal finding that the barrister and solicitor were protected by advocates' immunity. Mr Kendirjian successfully appealed to the High Court. In November 2016, the High Court approved consent orders allowing the appeal in relation to the solicitor. On 29 March 2017, the High Court allowed the appeal in relation to the barrister, finding that advocates' immunity did not extend to advice given in relation to a settlement offer.

What is advocates' immunity?

Advocates' immunity is a common law doctrine that protects lawyers from being sued by clients. In 1988, the High Court held that, at common law, an advocate cannot be sued by his or her client for negligent work done:

(i) in court; or

(ii) out of court, but which nevertheless "leads to a decision affecting the conduct of the case in court", or which is "intimately connected with" work in court.[2]

The High Court has repeatedly affirmed the place of advocates' immunity in Australian law, in 2005,3 2016,[4] and now 2017. The primary public policy rationale for advocates' immunity is that it is necessary to ensure the finality of court judgments, as it prevents re-litigation of decided cases via a “collateral attack" on the reasoning and judgment given in those cases.[5]

The Attwells Principle

In Attwells v Jackson Lalic Lawyers Pty Ltd[6], the High Court held that advice given by an advocate in relation to a settlement was not protected by the immunity because that advice merely led to a settlement by the parties, not an exercise of judicial power. That finding was consistent with the rationale of the immunity, because:

Advice leading to a compromise of a dispute cannot lead to the possibility of collateral attack upon a non-existent exercise of judicial power to quell disputes.[7]

Key points in this case

However, does the immunity extend to advice to reject a settlement offer which then leads to a judicial determination? On one view, advice to reject a settlement offer “leads” to an exercise of judicial power, because but for that advice, the decision would not have occurred. This view was not accepted by the High Court in Attwells and directly rejected by the Court in Kendirjian. Edelman J found that negligent advice not to settle a proceeding gives rise only to an historical connection between the advice and the continuation of the litigation, and that:

"the giving of advice either to cease or to continue litigating does not itself affect the judicial determination of a case".[8]

The Court in Kendirjian reiterated that, for the immunity to arise, the relevant work must "bear upon the court's determination of the case",[9] in that there must be a "functional connection between the work of the advocate and the determination of the case".[10]

The decision in Kendirjian confirms that, although advocates’ immunity is here to stay, so are its rigid boundaries. The High Court, as it did in Attwells, specifically declined to decide whether advocates’ immunity only extends to those decisions which a litigation lawyer can make without instructions from the client. We may have to wait for “Advocates’ Immunity III: The Final Conflict” for that question to be resolved.