In a surprise decision on Wednesday, the court said the “Chorley rule” adopted from England for solicitors should not apply in Australia and refused to extend it to barristers.
The verdict is a crushing end to the 10-year fight involving Sydney barrister Janet Pentelow and Bell Lawyers, which briefed her in a family law case in 2008 but then refused to pay a bill of $25,988.55.
She took them to court and won, with the assistance of a solicitor and senior counsel. But when she tried to claim the cost of the work she did on the case – almost $45,000 – Bell objected.
Ms Pentelow lost twice before the NSW Court of Appeal held in 2018 that barristers could also take advantage of the “Chorley rule”, which was adopted from the common law of England via an 1884 case.
“The majority of the Court held that the Chorley exception should not be recognised as part of the common law of Australia because it is an anomaly that represents an affront to the fundamental value of equality of all persons before the law and cannot be justified by the considerations of policy said to support it,” the court said in a statement.
“In addition, the anomalous nature of the Chorley exception is inconsistent with the statutory definition of ‘costs’ in s 3(1) of the Civil Procedure Act 2005 (NSW).”
The majority judgment explained that the reference to “costs payable” in the act “is an indication that an order for costs may be made only in respect of costs payable by the party in whose favour the order is made to another person for services rendered”.
“On this view the Chorley exception is inconsistent with the statutory definition of costs and, costs being a creature of statute, the Chorley exception has been displaced by the Civil Procedure Act.”
They suggested the rule had given rise to an “undesirable” practice.
“A self-representing solicitor, lacking impartial and independent advice that the court expects its officers to provide to the litigants they represent, may also lack objectivity due to self-interest. That may, in turn, result in higher legal costs to be passed on to the other party in the event that the self-representing solicitor obtains an order for his or her costs.
“Importantly, the view that solicitors should be encouraged to act for themselves is contrary to the modern orthodoxy that it is undesirable, as a matter of professional ethics, for a solicitor to act for himself or herself in litigation.”
Justice Geoffrey Nettle agreed with the orders in relation to Ms Pentelow, but said he did “not consider that there is need or justification to decide as part of this matter that the Chorley exception should be abolished”.