High Court affirms Advocates immunity
On 4 May 2016 the High Court published its reasons in Gregory Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16.
Three matters were agitated before the High Court. First, whether the Court of Appeal applied the wrong test for advocates immunity; secondly, whether the Court of Appeal was wrong in finding that the immunity applied where the claim did not involve any challenge to the judicial determination; thirdly, whether the High Court should reconsider Giannarelli v Wraith and D'Orta-Enkenaike v Victoria Legal Aid.
The majority of French CJ, Kiefel, Bell, Gageler, Keane JJ granted the appeal finding that the Court of Appeal misapplied the immunity test. The dissenting minority of Nettle and Gordon JJ (in separate judgments) would have dismissed the appeal finding that the immunity applied to the facts of the case.
The first and second ground of appeal are intimately intertwined. The majority qualified the scope of the immunity "is confined to conduct of the advocate that contributes to the judicial determination" [37]. At [38] and [45] the majority held that the scope of the immunity does not extend to negligent advice which leads to a settlement of the claim in civil proceedings (drawing a distinction between the alleged negligent conduct in D'Orta in a criminal prosecution). At [46] the majority concluded that the "intimate connection between the advocates work and the conduct of the case in Court must be such that the work affects the way the case is to be conducted so as to affect its outcome by judicial decision. The notion of intimate connection between the work the subject of the claim by the disappointed client and the conduct of the case does not encompass any plausible historical connection between the advocate's work and the client's loss; rather it is concerned only with work by the advocate that bears upon the judge's determination of the case. "
The majority made an interesting comment at [25] about the legal nature and effect of the advice to enter consent orders as proposed. The majority found that the agreement to bear the full indebtedness of the company was not a liability that arose from the guarantee rather a liability that arose to secure the benefit of deferred payment of the agreed settlement sum of $1.75 million and the collateral agreement that the ANZ would not prosecute the full indebtedness if the settlement sum was paid by 19 November 2010.
The majority rejected the Respondent's submissions that claiming negligent advice to bring about a compromised settlement was a challenge of the judicial determination where the Court reviews, approves and enters the orders. The majority found that the settlement (recorded as a nota bene to the consent orders) did not amount to a judicial determination. The majority held that the consent orders only gave enforceability to the settlement reached.
The dissenting views of Nettle J are of interest to the manner in which advocates may, if His Honour's reasoning was to prevail, advise their clients to proceed to resolve a litigated dispute. On His Honour's reasoning a solicitor or barrister would default to advising the client to enter into judgment for a sum of money to be paid rather than a dismissal of the proceedings with reliance on a Deed that defines the rights and obligations between the parties. Under Nettle J's reasoning the former attracts the immunity, the later does not. This is of particular relevance to defendants where an adverse judgment is registered on a credit search for the party. This may have consequences for those defendants with professional association (Lawyers, Accountants etc) and individuals and companies alike that are sensitive to securing finance. An adverse credit history can be abolished but for most defendants it is an undesirable slight on their credit rating and a hassle to rectify.
Gordon J at [104] premised her reasoning on the finality of the proceedings by the entering of consent orders. At [108] Her Honour drew a similarity between the facts in D'Orta and the present case (an opposing position to the majority) and found that the judicial effect of the orders are no different whether entered by consent of the parties or after trial. Both amount to the exercise of judicial power. Gordon J noted that the Appellant's argument that he was not indebted to ANZ for the full judgment sum is a challenge to the judicial determination, which was impermissible.
Turning to the third ground. The majority rejected the Appellant's challenge to the ratio that arises from Giannarelli v Wraith and D'Orta-Enkenaike v Victoria Legal Aid finding that "there is a clear basis in principle for the existence of the immunity" [36]. The High Court affirmed that the immunity was premised in public policy of finality of proceedings and the desire to quash collateral attacks on the judicial determination by claiming negligence of the advocate. Nettle J did not deal with it specifically deferring to the reasons of Gordon J. Gordon J agreed with the majority.
The reasoning of the majority draws a clear line in the sand for judicial creep of the immunity. The consequence of the majority judgment may have a profound effect on the mindset of the solicitor and barrister advising the client on settlement during a part heard hearing where it was generally understood that such advice was intimately connected with the outcome of the case, attracting the immunity. For the immunity to apply, based on the reasoning of the majority, a solicitor or barrister is safer to advise his or her client to argue the case to judicial determination than to advise the client to enter a compromised settlement to bring an end to the vicissitudes of litigation and secure certainty.
The other undesirable outcome of the majority decision is the different treatment of the immunity for advice given in criminal proceedings versus advice in civil proceedings where the advice involves early resolution of the proceedings (plea v settlement). If the immunity was to be universal it ought to apply equally to civil and crime in any given situation of comparitive factual standing.