Solicitors’ duties found to have limits

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[authors: John Dillon; Hannah Morris]

Kent v Jacques [2014] NSWSC 469 is an encouraging decision for solicitors and their insurers, who may feel that the standards they are judged against are more like “world’s best practice with 20/20 hindsight” than reasonable care diligence and skill. 

The case was concerned with whether a solicitor’s duty to exercise reasonable care includes an obligation to investigate the existence of further potential defendants with deep (or deeper) pockets, and whether or not failing to do so amounts to professional negligence.

Mr Kent (solicitor) was retained by Mr Jacques to represent him in a Local Court dispute with two corporate entities that Mr Jacques had been in partnership with (the Local Court Proceedings). Relations between Mr Kent and Mr Jacques soured and Mr Jacques terminated Mr Kent’s retainer and engaged new solicitors. The new solicitors advised Mr Jacques that Mr Senes, the owner/director of the two corporate entities, should be joined as a defendant to the proceedings in his personal capacity (in addition to the two corporate entities). Mr Kent commenced his own proceedings against Mr Jacques to recover his outstanding legal fees, which prompted a cross claim by Mr Jacques alleging that Mr Kent’s failure to advise Mr Jacques about joining Mr Senes to the Local Court Proceedings was negligent. 

The essence of the case is Justice Campbell’s decision that Mr Kent’s failure to investigate the existence of further potential defendants with deep pockets was not negligent. This was not the routine, or normal, practice in this or other fields of legal practice, especially where Mr Kent had no “reason to know” that the corporate defendants were impecunious and would be unable to satisfy judgment. The practitioner’s duty of “reasonable care, diligence and skill” did not require Mr Kent to advise Mr Jacques of his potential rights against an additional defendant or to seek instructions on whether to join that additional defendant.

Topics:  Attorney's Fees, Australia, Duty of Care, Insurers, Negligence

Published In: Civil Procedure Updates, General Business Updates, Insurance Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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