News — The High Court Ousts The Chorley Exception

In the early 1880s, two solicitors were named as defendants in litigation centring on a construction dispute. They represented themselves and were vindicated. The Court awarded them the costs of the action.

 

Written by Dr Stephen Shaw BA LLB (Hons) – October 2019

 

That costs award was the subject of an appeal, reported as London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872. The appeal was based in the argument that solicitors could not recover costs for work they had done themselves. The three appeal judges followed what was already reasonably settled law and found that, within reason, they could.

The appeal judges based their finding in public policy. They pointed out that allowing self-represented legal professions to recover reasonable costs made litigation cheaper for those who had to pay the costs. The reasoning behind the decision was that if legal practitioners could not recover the costs of self-representation, they would hire another practitioner to do the work and, in those circumstances, recovered costs would be greater. A self-represented practitioner cannot, for instance, recover monies for briefing himself or herself.

As a rule, self-litigants cannot recover legal costs; solicitors (and barristers), have been the exception; the Chorley exception.

The Chorley exception has received a great deal of criticism (see Cachia v Hanes [1994] HCA 14). The physician that heals himself cannot charge for that, nor can the mechanic recover the costs of fixing his or her own car. Why, commentators (and High Court judges) have asked, should solicitors get paid when working for themselves?

In Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150, the Supreme Court of New South Wales confirmed that the Chorley exception applied to barristers, and that Ms Pentelow, a barrister who was successful in her dispute with Bell Lawyers as to unpaid fees, could recover costs for work she had performed herself in pursuing her matter. That decision went on appeal to the High Court as Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29 (“Bell v Pentelow”).

In Bell v Pentelow, the High Court changed the law. The Chorley exception is no longer part of the common law of Australia.  The Court based this decision on two main arguments; one of policy and one in relation to the statutory nature of costs (for after all, as we all know, costs are a creature of statute).

The High Court reviewed the current authorities and noted that creating a costs exception for lawyers was bad policy. It was bad policy because it offended the principle of equality under the law and because it encouraged lawyers to act for themselves in circumstances, and the court was thus denied the aid it is entitled to expect from an independent and dispassionate advocate.

More narrowly, the court also looked at the wording of the relevant New South Wales legislation, which utilised the term ‘costs payable’ and found that as lawyers, they were under no obligation to pay themselves and they did not enliven that right to recover costs under the section.

Suffice to say that the Chorley exception has, in the broad sense, been excised from our law. There are lingering questions. For instance, what is the position of a lawyer who enters into a costs agreement with his or her own incorporated practice and then works on his or her own matter? Time will tell.