Advocate’s immunity unavailable to legal practitioner who allegedly exaggerated expertise
Jun 2015 |
Introduction
The Full Federal Court of Australia has set aside a Federal Court decision1 to summarily dismiss a claim made against a legal practitioner on the basis that it was an abuse of process, and that the practitioner’s conduct was exempt from liability due to advocate’s immunity.2
This case considered the doctrine of advocate’s immunity and its application to the different functions of an advocate.
The facts
The respondent was a legal practitioner who acted for the appellant in his intellectual property claim against Suda Ltd (Suda) for $3.8 million.
The claim was summarily dismissed after the respondent failed to prepare a satisfactory statement of claim after five attempts.
The appellant subsequently commenced proceedings against the respondent alleging negligence, breach of fiduciary duty and contract, acting unconscionably and engaging in misleading and deceptive conduct by asserting a competence to act.
At first instance the judge found that the suing of the practitioner was an abuse of process, as to do so would be to determine whether the appellant had a claim against Suda, effectively re-litigating the matter, and was inconsistent with the goal of finality that litigation seeks to achieve.
The judge also found the respondent was protected by advocate’s immunity as the complaint was about the failure to prepare an adequate statement of claim, and although this was work done outside of court, it lead to a decision which affected the conduct of the case in court and was covered by the immunity.
This decision was appealed to the Full Federal Court of Australia.
Issues
For the appellant to succeed in this appeal he had to have both of the reasons of the primary judge set aside on the basis:
- The primary judge erred in deciding that the claim was an abuse of process; and
- It was wrong to summarily dismiss the claim based on advocate’s immunity.
Decision
Was there an abuse of process?
This ground of the appeal was dealt with swiftly, with the respondent’s counsel acknowledging that the Primary Judge should not have dismissed the claim on this ground.
The allegations brought against the respondent extended beyond the claim pleaded against Suda (that is, one based solely in contract). The case against the respondent did more than simply re-litigate the underlying breach of contract claim. Although the appellant, being self-represented at the time, was unable to adequately express those claims, there was a clear assertion in the appeal that his claim against the respondent was that there was no advice given about, and were no claims made against, Suda for unjust enrichment, restitution or for a form of quantum meruit.
Advocate’s immunity
On the issue of advocate’s immunity, the court was asked to decide whether:
- The doctrine of advocate’s immunity applies to enable a claim to be dismissed summarily where there had been no trial and therefore no final determination on the merits of the claim against Suda;
- The doctrine of advocate’s immunity applies to statutory causes of action, namely s 18 and potentially ss 20 and 21 of the Australian Consumer Law (ACL); and
- Whether the immunity would extend to misrepresentations concerning the advocate’s ability to conduct the claim.
Finality
A major policy reason for the existence of advocate’s immunity is the public interest in having finality in court-resolved controversies and the resulting confidence in the justice system. It was therefore necessary to determine whether the registrar’s decision to strike out the underlying claim was ‘final’.
The court found the registrar’s decision to be interlocutory in nature, the order seeking only to dismiss the claim because it did not disclose a reasonable cause of action. The order did not preclude the appellant from bringing a fresh proceeding with an adequate statement of claim.
In addition, the appellant was suing the practitioner for failing to advise any potential claim against Suda for misappropriating his intellectual property or for quantum meruit, and for representing she had a competence to act in the matter despite having no experience in litigating intellectual property matters. The court found that maintaining those assertions did not necessarily involve a collateral attack on the decision of the registrar, and therefore did not ‘provoke any lack of confidence in the administration of justice’.
The court ultimately found that the Primary Judge erred in ordering the summary dismissal of the appellant’s claim against the respondent as an abuse of process. The court had regard to the standard required for a case to be summarily dismissed and concluded that it was not sufficiently clear that the interlocutory order disposing of the underlying claim had the character of a final judicial quelling of the controversy and it should not have been summarily dismissed.
Statutory liability and immunity
The court considered whether it was sufficiently clear that advocate’s immunity extends to statutory causes of action, such as actions under the ACL.
Although the High Court has not made any decisions on this issue, there seems to be a general acceptance of the proposition that conduct by advocates the subject of s 18 claims for misleading or deceptive conduct can be covered by advocate’s immunity.3 There has not however, been the same consideration applied to the other statutory cause of action identified, namely unconscionable conduct.
The court was of the view that there may be different public policy considerations when determining this and their application involved complex questions of law which are more appropriately determined at a trial.
Misrepresentation as to expertise
The court held that the representation made by the respondent to the effect she had the requisite expertise to conduct the claim when allegedly she did not, arguably fell outside of the scope of advocate’s immunity as it was not conduct intimately connected with court work.
This uncertainty meant that this was not an appropriate case to enter summary judgment. The appellant’s appeal was allowed and the orders from the Federal Court decision were set aside. The matter was remitted to the Primary Judge for further hearing.
Comment
This case serves as a reminder that, potentially, not all conduct of a legal practitioner may be covered by advocate’s immunity.
The practitioner in this case allegedly overestimated her expertise in which case the claimant may not have been afforded the representation required to pursue his case against Suda. While advocate’s immunity may present a solid defence in many circumstances, it is a complex area of the law and not without its limitations. Lawyers (and their insurers) should be aware of their potential liability when performing work that may fall outside the scope of the immunity, and that statutory causes of actions are available against providers of legal services.
1 Sims v Chong [2014] FCA 1069.
2 Sims v Chong [2015] FCAFC 80.
3 Nikolaidis v Satouris [2014] NSWCA 448.
