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  • The Court of Appeal has considered the question of whether firms can recover costs for work done by employed solicitors when the firm acts as a self-represented party in proceedings.
  • The Civil Procedure Act allows for the recovery of costs including ‘remuneration’, which extends to remuneration paid to employed solicitors.
  • The costs of employed solicitors representing a law practice in proceedings are recoverable pursuant to an order for the payment of the law practice’s costs.

For 135 years the general position has been that a party who is self-represented cannot recover costs under an order for costs for time spent on the litigation. This rule was pursuant to the famous English Court of Appeal decision in The London Scottish Benefit Society v Chorley (1884) 13 QBD 872 (‘Chorley’).

There was one exception to this rule. If the self-represented party was a solicitor, that party could recover costs for time spent. You may know this as the ‘Chorley exception’.

In 2019, another notable decision was handed down by the High Court of Australia in Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29 (Bell Lawyers). In Bell Lawyers, the High Court determined that the Chorley exception was not part of the common law of Australia. This meant that solicitors (and barristers), like other self-represented litigants, could not recover costs for time spent representing themselves in litigation.

Bell Lawyers dealt specifically with self-represented solicitors and barristers claiming the costs of their own time. It did not determine the correct approach where a law practice or partner was a party to a proceeding and sought to recover costs incurred by the law practice or partner’s employed solicitors – aside from a casual reference to the fact that recovery of costs by a party using an employed solicitor was not a matter which required application of the Chorley exception in any event (at [68]). The Court observed (at [50]):

‘A decision … that the Chorley exception is not part of the common law of Australia would not disturb the well-established understanding in relation to in-house lawyers employed by governments and others, that where such a solicitor appears in proceedings to represent his or her employer the employer is entitled to recover costs in circumstances where an ordinary party would be so entitled by way of indemnity.’

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