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Contingent Exposure ≠ Compensable Loss: High Court on Timing and Proof in Solicitor’s Negligence Cases
The High Court of Australia has recently clarified when loss first arises in professional negligence claims involving defective binding financial agreements (BFAs).
In R Lawyers v Mr Daily [2025] HCA 41, the Court held that a client does not suffer compensable loss at the time a defective BFA is executed because any benefit remains contingent until separation. The limitation period therefore did not commence until the marriage broke down.
However, the Court also confirmed that the plaintiff’s only proven loss was a modest sum of wasted legal fees, and that his broader “loss of a better outcome” claim failed for want of evidence.
In this article Partner Greg Stirling, Partner Mark Brookes and Senior Associate Joel White, examine the Court’s reasoning on contingent loss, its rejection of the “damaged asset” analogy, and the evidentiary hurdles for proving a better financial outcome.
