The High Court has decided to retain the so-called “advocates’ immunity” – the immunity enjoyed by lawyers for negligent actions or omissions done in the conduct of a case in court, or done out of court, but which are intimately connected with the conduct of a case in court.
In a judgment handed down today, all seven Justices found that, despite moves away from the immunity in other common law jurisdictions, there did not exist a compelling case for abolishing the immunity in Australia.
As discussed in the Institute’s original blog post about this case the immunity means that lawyers may not be sued for negligent actions or omissions done in the conduct of a case in court, or done out of court, but which are intimately connected with the conduct of a case in court.
The High Court heard arguments both about the extent of the immunity, that is, what legal work should be covered by it, and the very existence of the immunity.
Advocates’ immunity was abolished recently in both New Zealand and the United Kingdom, and other common law countries, like Canada and the United States, have never recognised it at all.
The case before the Court involved advice given about settling some litigation.
The appellants, Gregory and Noel Atwells and Barbara Lord, were involved with a company that was loaned some money by a bank. They were unable to pay back the loans, and the bank commenced recovery proceedings. There was a dispute about the extent of Gregory Atwells’ and Barbara Lord’s personal liability to the bank.
The case went to court, but during the proceedings, a settlement agreement was worked out. Mr Atwells and Ms Lord’s lawyers, Jackson Lalic Lawyers, advised Mr Atwells and Ms Lord to agree to the settlement. They relied on that advice, and agreed to the settlement, and the NSW Supreme Court made consent orders reflecting the terms of the settlement agreement.
Later on, it turned out that the settlement agreement made Mr Atwells and Ms Lord personally liable for a much larger sum than they were advised at the time: some $3.4 million, instead of the $1.7 million that Mr Atwells and Ms Lord thought they were agreeing to.
When the bank came to collect the $3.4 million, Mr Atwells and Ms Lord sued Jackson Lalic Lawyers for negligent advice. Jackson Lalic Lawyers, in turn, claimed that their advice was protected by the advocates’ immunity because, although it was not about the conduct of a court case per se, it was intimately connected with the conduct of the case against the bank, which was in court at the time.
The appellants argued that either the immunity did not cover the settlement advice, or, in the alternative, that the immunity should be abolished in Australia.
The High Court found (7:0) that the immunity should not be abolished in Australia.
Both the majority judgement, and the two partially dissenting judgments, all agreed that the rationale given for the immunity in previous High Court cases – maintaining the “finality” of court judgments – was still a good enough reason for retaining the immunity.
The majority said:
To speak of the exercise of judicial power to quell controversies as an aspect of government is to make it clear that the immunity is not justified by a general concern that disputes should be brought to an end, but by the specific concern that once a controversy has been finally resolved by the exercise of the judicial power of the State, the controversy should not be reopened by a collateral attack which seeks to demonstrate that that judicial determination was wrong.
The advocate’s immunity is, therefore, justified as an aspect of the protection of the public interest in the finality and certainty of judicial decisions by precluding a contention that the decisions were not reached lawfully.
Similarly, Justice Nettle observed that:
The purpose of the advocate’s immunity is to avoid the re-litigation in collateral proceedings for negligence, or other civil cause of action, of issues determined in the principal proceedings… It is based in policy that a controversy should not be re-opened by a collateral attack which seeks to demonstrate that a judicial determination was wrong.
Finally, Justice Gordon agreed, saying:
I agree with the reasons of French CJ, Kiefel, Bell, Gageler and Keane JJ that this Court should not reconsider its previous decisions [about advocates’ immunity].
The only disagreement in the Court was about whether the immunity applied in the actual case of Mr Atwells and Ms Lord and Jackson Lalic Lawyers.
The majority found that it did not apply, because the settlement advice was not sufficiently connected with the conduct of a case in court, and, therefore, the policy reasons for retaining the immunity did not support its extension to Jackson Lalic Lawyers under the circumstances.
On the other hand, Justices Nettle and Gordon both thought that the immunity did extend to Jackson Lalic Lawyers, because they thought the settlement advice was sufficiently connected to the conduct of the case involving the bank.
As a result, while Jackson Lalic Lawyers won the argument about retaining advocates’ immunity in Australia, they lost the part of the case most immediately relevant to them: whether they were covered.
Advocates’ immunity and the rule of law
This High Court case featured many rule of law considerations that weighed both in favour of, and against, retaining the immunity.
Critics of the immunity have argued that it provides protections to lawyers that other professions don’t have, making it look like the courts are looking out for their own, that it denies remedies to clients that have suffered from negligent advice, and that it is not necessary to safeguard the integrity of the legal system.
However, the High Court decided that considerations of precedent, and protecting the finality of court judgments, outweigh the criticisms of advocates’ immunity.
No doubt, the decision will spark debate about whether or not it is fair to retain the immunity. The Institute looks forward to continuing to contribute to that debate in a constructive manner.
— William Shrubb