Chorley not?

Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29

High Court rules on DIY costs for Lawyers

You may be surprised to learn that, until recently, unrepresented solicitors could recover the professional costs of acting for themselves in litigation.1  This right, recognised by the English Court of Appeal in London Scottish Benefit Society v Chorley,2  marked an exception to the general rule that self-represented litigants cannot recover their costs of litigation save for out-of-pocket expenses. 

If solicitor litigants could have their costs, surely it followed that barristers could too? And what an exciting prospect that was for society. Imagine your wretched neighbour’s face, once immovable in their refusal to cough up for the dividing fence, now enamoured with the brilliance of your courtroom advocacy as you prosecute your own fence dispute, all the while& salivating at the thought of having your costs for doing so.

And for a time, we were off! Stepping foot in faraway lands described as “Registries” and discovering “filing fees”, & embarking on our collective expedition to personally litigate our grievances. But how exactly did all this come about?

The Chorley exception 

In or about 1884, an ill-fated plaintiff brought an action for money had and received against a firm of solicitors. The solicitors succeeded in defending the action themselves and were awarded their costs.

Upon taxation, the solicitors claimed the value of their legal work as if they had acted for any other client. The English Court of Appeal unanimously affirmed the solicitors’ right to do so.3 Brett MR at 875-6 stated:

When an ordinary party to a suit appears for himself, he is not indemnified for loss of time; but when he appears by solicitor, he is entitled to recover for the time expended by the solicitor in the conduct of the suit. When an ordinary litigant appears in person, he is paid only for costs out of pocket. He cannot himself take every step, and very often employs a solicitor to assist him: the remuneration to the solicitor is money paid out of pocket. When, however, we come to the case of a solicitor, the question must be viewed from a different aspect. There are things which a solicitor can do for himself, but also he can employ another solicitor to do them for him; and it would be unadvisable to lay down that he shall not be entitled to ordinary costs if he appears in person, because in that case he would always employ another solicitor. 

Explaining the rationale for what has come to be known as the “Chorley exception”, Bowen LJ stated at 877:

Professional skill and labour are recognised and can be measured by the law; private expenditure of labour and trouble by a layman cannot be measured. It depends on the zeal, the assiduity, or the nervousness of the individual. Professional skill, when it is bestowed, is accordingly allowed for in taxing a bill of costs; and it would be absurd to permit a solicitor to charge for the same work when it is done by another solicitor, and not to permit him to charge for it when it is done by his own clerk.

Application in Australia

The Chorley exception was thought to be adopted by a majority of the High Court in Guss v Veenhuizen (No 2).4 Concerned with the question of whether a solicitor litigant was entitled to his costs, the majority stated:

The appellant did not claim costs incurred by him in retaining the professional services of a solicitor in his litigation. He appeared in person. He sought taxation of costs on the basis that he was a solicitor who acted for himself and did so according to the well established rule of practice which entitles a person, being a solicitor, to certain professional costs in those circumstances …Those authorities establish that the litigant in person does not recover such costs in such circumstances in the capacity of a solicitor, but because, he happening to be a solicitor, his costs are able to be quantified by the Court and its officers.

Despite this, the exception was & frequently doubted.5 In Cachia v Hanes,6 the High Court considered whether an engineer appearing in person could recover his costs based on his hourly rate. The majority held that the appellant’s time was not a “cost” within the meaning of the relevant court rules,7 and described the Chorley exception as “somewhat anomalous” and “a limited and questionable exception”.8

But what of the Chorley exception’s application to barristers? Some decisions have extended the exception, though little is offered by way of substantive reasoning in those cases.9 Conversely, there are principled decisions against its extension.10 In Murphy v Legal Services Commissioner (No 2),11 having awarded a self-represented barrister costs in the primary proceeding, Daubney J stated at [16]:

There is no authority which supports the proposition that the “anomalous” and “somewhat dubious” exception in favour of a self-represented solicitor extends to a self-represented barrister. In the absence of clear authority, I am not prepared to extend the ambit of an exception which is itself of such questionable application.

Dissatisfied with this state of affairs, one of our interstate colleagues challenged the point.

Pentelow’s case 

Ms Pentelow’s tour of the Australian court hierarchy began in 2008 when she was retained as counsel by Bell Lawyers. Following a dispute over her fees, Ms Pentelow, a barrister, commenced proceedings against her former instructing solicitors in the Local Court. Unsuccessful at first instance, Ms Pentelow appealed to the NSW Supreme Court where she was awarded her outstanding fees, together with interest (approximately $56,000 in total) and her costs at first instance and her costs on appeal.12

Following her victory, Ms Pentelow dutifully forwarded her memorandum of fees to Bell Lawyers for the sum of $144,425.45. That amount comprised $44,880 for “Costs incurred on her own behalf” at first instance and “Provision of Legal Services Provided by herself” on appeal. Ms Pentelow was represented in both proceedings, but undertook some preparatory work, including the drawing of pleadings and affidavit evidence.

On an application for assessment of her costs, Ms Pentelow’s allowance for personal legal work was disallowed, on the basis that the Chorley exception did not apply to barristers. The Costs Review Panel formed the same view and so too did the District Court.13

Boldly venturing where no Australian intermediate appellate court had gone before, the NSW Court of Appeal held that the Chorley exception applied to self-represented barristers.14 Beazley ACJ (Macfarlan JA agreeing) stated that the Chorley exception was not based on the type of work undertaken by solicitors, but rather the fact that the work could be quantified.15 Observing that a meaningful distinction between the assessment of solicitors’ fees and barristers’ fees no longer existed, Beazley ACJ reasoned that there was no basis to exclude barristers from the indulgence of the Chorley exception.16

The Court of Appeal remitted the matter and awarded Ms Pentelow her costs of the appeal.  . 

Appeal to the High Court 

With painstaking patience and a degree of deft legal analysis, & The key passage in the decision of Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29 can be found in paragraph 3 of the majority judgment of Kiefel CJ, Bell, Keane and Gordon JJ, which reads:

The Chorley exception has rightly been described by this Court as “anomalous”. Because it is anomalous, it should not be extended by judicial decision to the benefit of barristers. … the Chorley exception is not onlyanomalous,it is an affront to the fundamental value ofequality of all persons before the law. … Accordingly, it should not be recognised as part of the common law of Australia.

With regard to the question of the professional skill that unrepresented lawyers bring to a courtroom17, the majority made the following observation:18

It may be said immediately that the view that it is somehow a benefit to the other party that a solicitor acts for himself or herself … is not self-evidently true.  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. … 

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. 

In relation to the Court’s ability to calculate costs, by distinguishing lawyers from the rest of society, the High Court expressed the following comment:19 

Further, there is no reason why, in principle, the reasonable value of the time of any litigant cannot be measured.  The courts regularly value the provision of labour or services in the context of quantum meruit claims.  To act upon a principle that evidence enabling the quantification of the value of the time of non-solicitor litigants in person should not be received or acted upon by the courts is to exalt the position of solicitors in the administration of justice to an extent that is an affront to equality before the law. 

The majority concluded:20 

There is no compelling reason for this Court to refrain from taking the “logical step” identified in Cachia.  The Chorley exception is not part of the common law of Australia. 

Having acted for themselves at every stage of the proceeding, one imagines that Bell Lawyers may have realised a somewhat Pyrrhic victory; the cost of success most likely eclipsing the value of Ms Pentelow’s claim.