Can lawyers claim professional costs for litigating?
The High Court decision in Bell Lawyers Pty v Pentelow [2019] HCA 29 has held the long standing Chorley (London Scottish Benefit Society v Chorley (1884) 13 QBD 872) exception rule now no longer applies in Australia.
The usual rule concerning costs is that self-represented litigants are not entitled to claim compensation or recover legal costs against the opposing party since they didn’t actually engage lawyers to act for them - so there was no entitlement for them to recover “legal costs”.
The Chorley exception rule permitted self-represented litigants who were solicitors to recover professional time and costs for acting for themselves in litigation if they were successful.
The High Court has found the Chorley exception is not part of Australian common law.
What are the facts?
Ms Pentelow (a barrister) was involved in a dispute with Bell Lawyers for unpaid fees for a brief she accepted from Bell Lawyers.
In the lower court proceedings, Ms Pentelow undertook various legal tasks for herself, such as preparing documents, affidavits and reviewing submissions. Ms Pentelow was successful in the lower court proceedings, and obtained a favourable costs order against Bell Lawyers.
Bell Lawyers refused to pay for costs claimed by Ms Pentelow’s for her own professional time she expended in the matter and which she claimed pursuant to the costs orders in her favour.
At a costs assessment of Ms Pentelow’s costs, both the initial costs assessor, and a subsequent review panel rejected Ms Pentelow’s claim for the costs of her own time. It found that the Chorley exception did apply as part of the common law in Australia but only to solicitors, and the rule did not extend to barristers.
On appeal to the NSW Court of Appeal, the Appeal Court found in favour of Ms Pentelow, and held the Chorley exception applied to, and extended to barristers who undertook legal work for themselves.
The litigation found its way to the High Court on Appeal as it considered the issue to be significant for the Court to clarify whether the Chorley exception applied equally to both solicitors and barristers, and whether it formed the common law of Australia.
The Decision
The High Court held the Chorley exception should not extend to self-represented solicitors or barristers and unanimously held the Chorley exception should not be recognised as part of the common law of Australia.
The Takeaways…
- Awards of legal costs by a Court allows a partial indemnity for professional legal costs actually incurred by a party in litigation who engage external lawyers;
- The long standing and widely accepted Chorley exception was rejected as it was contrary to the fundamental values of equality of all persons before the law, and it sought to discriminate;
- Certain legislation, or statutory provisions may still allow for costs recovery by self-represented litigants who are legal practitioners including where it involves government, or in-house lawyers;
- Litigants (including solicitors and barristers) should, if possible, obtain independent legal advice and representation, as it’s generally undesirable, depending on circumstances, for parties to act for themselves as they to lack independence and objectivity.