Bell Lawyers Pty Ltd v Pentelow & Anor [2019] HCA 29

On 4 September 2019, the High Court of Australia delivered its decision in Bell Lawyers Pty Ltd v Pentelow & Anor [2019] HCA 29, considering the extent to which the ‘Chorley exception’ is part of Australian law.

Generally speaking, self-represented litigants are not entitled to compensation for their time spent preparing and conducting their cases. The rationale for this is that party/party costs are a partial indemnity for legal costs incurred and does not extend to other loss or expenses incurred by a party. The ‘Chorley exception’ (named after an 1884 UK decision – London Scottish Benefit Society v Chorley) holds that where a self-represented litigant is a qualified solicitor, they are entitled to claim professional costs for legal work they performed themselves.

In Bell Lawyers Pty Ltd v Pentelow & Anor, the High Court decided that the ‘Chorley exception’ should not be recognised as part of the common law of Australia. The exception was described as “an affront to the fundamental value of equality of all persons before the law”.

An important policy issue underlying the High Court’s decision is the role of the solicitor in providing advice to a client. Justice Brereton in a 2007 NSW Supreme Court decision described the solicitor’s role as:

“Where a solicitor represents a litigant, the court is entitled to expect the litigant to be impartially and independently advised by an officer of the court. … Where a solicitor acts for himself or herself there cannot be independent and impartial advice, and this is in principle a strong reason for holding that a solicitor litigant should not be entitled to costs of acting for him or herself.”

As the case before the High Court concerned a barrister, there was perhaps some doubt whether the Chorley exception still applied to solicitors, particularly law practices which were partnerships or incorporated legal practices. Arguably these types of legal practice are similar to employers with in-house counsel, and the High Court specifically held that the professional costs of in-house counsel are recoverable as party/party costs.

Over the past 12 months, courts in various jurisdictions have confirmed that the Chorley exception extends to all law practices whether they be sole practitioner, partnership or incorporated legal practice.

The High Court’s decision in Bell v Pentelow does not prohibit an order for costs being made in favour of a litigant who is a lawyer per se, but restricts the type of costs recoverable pursuant to such an order. Where a lawyer litigant – either solicitor or barrister – engages a legal practitioner to represent them, the costs of legal representation are recoverable on a party/party basis (subject to the requirement that they be fair and reasonable).

Advantages of choosing Blue Ribbon Legal as your legal representative:

  • we provide objective and impartial advice;
  • we are experienced in costs assessments;
  • we allow you to focus on your business while we take care of the costs dispute

References:

New South Wales – McIlraith v Ilkin and anor (Costs) [2007] NSWSC 1052

Queensland – Equititrust Limited (Receivers and Managers Appointed) (In Liquidation) v Tucker & ors [2019] QSC 308

South Australia – D A Starke Pty Ltd V Yard & Anor (No 2) [2020] SASC 81

Victoria – United Petroleum Australia Pty Ltd v Herbert Smith Freehills [2020] VSCA 15; and

 Guneser v Aitken Partners (Cross appeal on costs) [2020] VSC 329