Personal Costs Orders Against Legal Practitioners Under the Uniform Law by Konrad de Kerloy, Barrister, Fourth Floor Chambers
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recent New South Wales Court of Appeal decision (Muriniti v Mercia Financial Solutions Pty Ltd [2021] NSWCA 180 (18 August 2021) should be of interest to Western Australian legal practitioners as it explains the operation of the soon to be introduced provisions of the Uniform Law which allow the court to make costs orders personally against the legal practice or the solicitor who acts for an unsuccessful party in litigation involving claims for damages. The case is also a salient reminder of the very high legal and ethical obligations imposed on legal practitioners by the Uniform Law and the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 not to plead or allege fraud and other criminality or misconduct without a proper basis to do so.
Relevant Provisions Cl 2(1) of Sch 2 to the Uniform Law stipulates that: A law practice must not provide legal services on a claim or defence of a claim for damages unless a legal
practitioner associate responsible for the provision of the services concerned reasonably believes on the basis of provable facts and a reasonably arguable view of the law that the claim or the defence (as appropriate) has reasonable prospects of success. That provision must be read with rule 21 of the Conduct Rules 2015. Rule 21.3 provides that a solicitor must not allege any matter of fact in any court document settled by the solicitor, in any submission during any hearing, in the course of an opening address, or in the course of a closing address or submission on the evidence, unless the solicitor believes on reasonable grounds that the factual material already available provides a proper basis to do so. Rule 21.4 provides that a solicitor must not allege any matter of fact amounting to criminality, fraud or other serious misconduct against any person unless the solicitor believes on reasonable grounds that available material by which the allegation could be supported provides a proper basis for it, and
the client wishes the allegation to be made, after having been advised of the seriousness of the allegation and of the possible consequences for the client and the case if it is not made out. Clause 5(1) of Sch 2 of the Uniform Law provides: 5 Costs order against law practice acting without reasonable prospects of success (1) If it appears to a court in which proceedings are taken on a claim for damages that a law practice has provided legal services to a party without reasonable prospects of success, the court may of its own motion or on the application of any party to the proceedings make either or both of the following orders in respect of the practice or of a legal practitioner associate of the practice responsible for providing the services— (a) an order directing the practice or associate to repay to the party to whom
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