In short: no. Solicitors are subject to stringent ethical, fiduciary, and professional obligations that govern the handling of client information—even where fees remain unpaid.
Confidentiality and the Conduct Rules
Rule 9 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 is unequivocal: solicitors must not disclose confidential client information obtained during the course of engagement, except in narrow circumstances—such as with the client’s consent or where disclosure is required by law. Notably, fee recovery is not one of those exceptions. Using confidential information to chase unpaid costs risks breaching the Conduct Rules and may result in disciplinary action, including findings of unsatisfactory professional conduct or professional misconduct.
Conflicts of interest and fiduciary duties
Solicitors whilst we are acting for a client, are the client’s fiduciary and are bound to act in their clients’ best interests.
If there is a dispute over costs, it is likely that a solicitor would be conflicted out of continuing to act. Their personal interest in defending and progressing their right to be paid may conflict with acting in the best interest of the client or being able to be independent and objective in respect of the client.
Leveraging confidential information for personal financial gain—such as recovering fees—creates a clear conflict of interest. It erodes the trust that underpins the solicitor-client relationship and exposes the solicitor to both legal and professional consequences.
The Harman undertaking
The Harman principle, from Harman v Secretary of State for the Home Department [1983] 1 AC 280, further restricts the use of certain documents disclosed in legal proceedings. Even if the material isn’t strictly confidential, repurposing it outside its original context may be prohibited—adding another layer of constraint to cost recovery efforts.
Recent case law
Two recent decisions illustrate the risks:
- Sithakoul v Su [2022] NSWSC 132: The court examined a solicitor’s attempt to assert a lien over a client file to secure unpaid fees. This included the refusal to release documents despite offers of security.
- Eden King Lawyers Pty Ltd v Makari (No 2) [2022] NSWSC 479: This case underscored the dangers of using client information in fee disputes. The court stressed the importance of maintaining professional standards and avoiding conduct that could be perceived as coercive or self-serving.
These cases reinforce the need for caution when dealing with unpaid fees, particularly where client confidentiality is involved.
A discussion of the cases is available here.
Beyond compliance: preserving trust
Even where a solicitor believes disclosure is legally defensible, doing so can irreparably damage the solicitor-client relationship. Trust is foundational to legal practice. Misusing confidential information not only harms individual clients—it risks reputational damage to the solicitor and the profession as a whole.
Conclusion
Solicitors must exercise restraint and sound judgment when considering the use of confidential client information in fee recovery. Upholding ethical standards is not merely a regulatory requirement—it’s essential to preserving the integrity of the profession and the trust of those we serve.
When in doubt, seek guidance. The Ethics Hotline is available to support you.
