Legal practitioners and their insurers can breathe a sigh of relief as on 21 May 2015 the NSW Court of Appeal upheld the decision of the District Court in Kendirjian v Lepore [2014] NSWDC 66, summarily dismissing a claim based upon the advocate’s immunity principle. Mr Lepore, solicitor, acted for Mr Kendirijian in a personal injury claim against Ms Ayoub in 2004. In August 2006, the matter was listed for a five day hearing. On the first day of the hearing, Ms Ayoub’s legal representatives communicated an offer to Mr Lepore to settle the proceedings for $600,000 plus costs. It was alleged by Mr Kendirijian that Mr Lepore only told him that “a low offer” had been made on behalf of Ms Ayoub and this had been rejected. Mr Kendirijian was subsequently awarded $308,432.75 by the District Court.
Mr Kendirijian alleged that he only became aware of the amount of Ms Ayoub’s offer in January 2009 and would have accepted it if he had been properly advised in relation to it. He subsequently commenced District Court proceedings against Mr Lepore for negligence in October 2012, claiming the difference between the settlement offer and the judgement. Mr Lepore brought a motion to summarily dismiss the proceedings on the basis that he was immune from suit under the advocate’s immunity principle.
At first instance, Taylor DCJ, held that Mr Lepore’s decision not to discuss the settlement offer with Mr Kendirijian was a decision affecting the conduct of the case in court and therefore enlivened the immunity. In reaching this conclusion, his Honour relied on the Court of Appeal decision in Donnellan v Woodland [2012] NSWCA 433 where the court found that advice given by a solicitor or failure to give advice by a solicitor that led to a decision to continue with a case was a decision affecting the conduct of the case in court, attracting the immunity.
On appeal, Mr Kendrijian argued that Taylor DCJ had given a very broad construction to the immunity and argued that Mr Lepore’s failure to communicate the settlement offer was not connected with the way the case was ultimately conducted in court i.e. the questions asked of Mr Kendrijian in examination in chief or re-examination, expert medical evidence tendered, the witnesses that were to be called and the closing submissions that were to be made.
The Court of Appeal upheld Taylor DCJ’s and rejected Mr Kendrijian’s argument.
The Court of Appeal relied on the principles enunciated by the High Court in D’orta-Ekenaike v Victoria Legal Aid [2005] HCA 12 that extended the immunity to cover “work done out of court which leads to a decision affecting the conduct of the case in court”. The Court of Appeal agreed with Taylor DCJ’s application of Donnellan’s case and found that discussion of the offer could have impacted on the decision to continue with the proceedings and was therefore, sufficiently connected with the conduct of the case in court to give rise to the immunity. Further, the Court of Appeal expressed concerns that Mr Kendrijian’s case against Mr Lepore would involve re-litigation of the issues raised in the principal personal injury proceedings. The Court of Appeal took the view that this policy consideration of “finality” justified applying the principles of advocate’s immunity to the circumstances of this case.
Despite the Court of Appeal confirming the breadth of advocate’s immunity, it would nevertheless be prudent for a practitioner to advise a client on all aspects of settlement negotiations as advocate’s immunity will not afford any protection in a disciplinary action.
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