When you engage a lawyer to provide legal services, no doubt you have certain expectations about how those services will be delivered.
You expect the lawyer knows what they’re doing, that they’ll provide their services at a high standard, and they’ll act in your best interests.
So what happens when those expectations are not met? Well you may have a professional negligence claim against your (presumably now) ex-lawyer and, if proven, it could result in your ex-lawyer paying you damages for loss you’ve suffered as a result of their negligence.
Here’s what you need to know.
The elements of a claim
In order to make out a successful claim against your ex-lawyer to recover damages for negligent advice and / or legal services, you need to establish:
- your ex-lawyer owed you a duty of care;
- they breached that duty; and
- you suffered economic loss as a result of that breach.
The duty of care — what you can expect from your lawyer
When you engage a lawyer, that lawyer owes you certain duties. The duties arise in different ways:
The relationship between you as the client and your lawyer is governed by a contract (also known as the “retainer”). Usually, you’ll be provided with a written retainer from your lawyer setting out the terms of your relationship. However, sometimes the retainer can be implied by conduct and conversations had between you and your lawyer.
A term requiring the lawyer to exercise reasonable care and skill is implied in all retainers between a lawyer and client.1 The basic implied term requires your lawyer to use their best endeavours to protect your interest and to exercise reasonable care and skill in carrying out your instructions by proper means.
Duties in tort
The law accepts that the relationship between a lawyer and client is a special kind of relationship known as a “fiduciary relationship”, arising primarily due to the fact that the client places complete trust in the lawyer. The relationship of itself gives rise to a duty of care on the part of the lawyer.
Generally, the scope of the duty of care in tort is broader than the duty to exercise reasonable care and skill that’s implied in the retainer. What’s covered in the duty of care is largely determined by what you told the lawyer to do. However, generally, the duty of care extends to:
- carrying out your instruction by proper means;
- advising on all matters relevant to your instructions;
- providing advice to you in a way that you understand;2
- keeping you informed of all material information concerning your matter;3
- consulting with you on questions that require your further instructions; and
- protecting your interests (for example, bringing to your attention anything unusual in an agreement or transaction that could potentially cause you unexpected liabilities).4
In some circumstances, the duty of care owed by your lawyer can go beyond your instructions and extend to:
- a duty to take steps to avoid a real or foreseeable risk of economic loss being suffered by you;5 and
- a duty to warn you about any matters of which you should be informed to avoid foreseeable risk of loss.6
A lawyer’s conduct is also governed by legislation. In the ACT, the relevant legislation is the Legal Profession (Solicitors) Conduct Rules 2015 (ACT) (“Solicitors Rules”). The Solicitors Rules largely echo a lawyer’s duties in contract and tort.
The duties your lawyer owes to you as the client in contract and in tort exist side-by-side. However, there’re subtle but significant differences in the type of conduct covered by the duties, the time when a claim for breach of the duties arises and the type of damages you can claim for breach of the duties.
Which cause of action (whether contract or tort) is most advantageous for you will depend on your specific circumstances.
Breach of the duty — when your lawyer does not meet your expectations
In both contract and tort, a lawyer must execute their duties to the standard expected of a reasonably competent lawyer,7 and is expected to possess knowledge of principles of law and relevant procedures relevant to the work they agree to undertake in the retainer.8
Where your lawyer professes to have particular expertise in a discrete area of law or to have a special skill, then they’re held to the standard of a reasonably skilled lawyer practising in the relevant area of law.9
If your lawyer falls short of the expected standard, then they’ve breached the duty of care owed to you.
Damages — the loss you’ve suffered
If you can establish that your ex-lawyer has breached the duty of care they owed to you, you must then establish that you’ve suffered loss as a direct result of the lawyer’s breach.
The tests for whether or not a loss occurred as a result of the lawyer’s breach of duties requires proof that the loss was:
- caused by the breach; and
- not too remote.
Although these tests sound simple, there are complex principles to determine causation and remoteness. You’ll need to get advice on whether a particular loss may be claimed in your circumstances.
As stated above, if you can prove your ex-lawyer has breached a duty owed to you, you may have a claim in both contract and tort. You can run both claims side-by-side, however, they each have different ways of calculating the damages you may be awarded.
- Damages in contract aim to place you in the position that you would’ve been in had your ex-lawyer properly performed their duties under the retainer (that is, you’re your ex-lawyer competently provided the required legal services and / or advice).10
- Damages in tort aim to put you in the position you would’ve been in had the negligence (that is, the breach of the duty of care) not been committed.
If you’re successful in both claims, you must elect which measure of damages you’d prefer.
The type of damages you may be entitled to claim and which measure of damages (that is, contract or tort) is most favourable to you really depends on your particular circumstances. However, the types of damages that are commonly recoverable in a professional negligence claim against a lawyer include:
- fees paid to your ex-lawyer;
- costs you incurred in implementing your ex-lawyer’s advice or recommendations;
- costs you incurred in rectifying negligent advice or legal services; and
- the amount of any additional liabilities levied on you as a result of the lawyer’s negligent advice or legal services (this could include additional taxes or a liability to a third party).
Professional negligence claims can be particularly technical and, with reputations on the line, hard-fought.
Meyer Vandenberg’s dispute resolution team has extensive experience in pursuing claims against negligent lawyers. Our lawyers will provide you with clear advice on your potential claim against your former lawyer and guide you through the process to enforce your rights against a lawyer that has done you wrong.
Please feel free to contact us for more information and advice
1 Astley v Austrust Ltd (1999) 197 CLR 1, .
2 Lederberger v Mediterranean Olives Financial Pty Ltd (2012) VSCA 262.
3 Bell Group Ltd (in liq) v Westpac Banking Corp (No 9)  WASC 239.
4 Henderson v Amadio (No 1) (1995) 62 FCR 1, 137-8.
5 Hawkins v Clayton (1988) 164 CLR 539, 539; Heydon v NRMA Ltd (2000) 51 NSWLR 1.
6 Curnuck v Nitschke  NSWCA 176, .,
7 Voli v Inglewood Shire Council (1963) 110 CLR
8 Ashby v Russell  ANZ Conv R 321; Metsikas v Quirk (No 2)  NSWSC 757.
9 Heydon v NRMA Ltd (2000) 51 NSWLR 1.
10 Robinson v Harman (1848) 1 Ex 850.