Did you write that down? Court affirms file notes are crucial

Having written records of advice given is a highly effective way to protect your practice against claims by unhappy clients. Recording advice given to a client in a file note or an email to the client is easy when you are sitting in your office and not under time pressure. When you are away from the office, perhaps outside a courtroom where a hearing is about to commence, it is a lot harder.

This difficulty may account for some of the many claims against solicitors alleging negligent advice in relation to the settlement of court proceedings. Often the assertion is that if the client had been properly advised they would not have settled on the terms that they did. Occasionally, it is asserted that if the client had been properly advised they would have accepted an offer of settlement.

In Odlum v Friend [2024] NSWCA 159, the solicitor acted for Ms Odlum in relation to a property dispute with a former de facto partner back in 2011. Macready AsJ delivered judgment in that matter and stood over the question of costs.

Before the costs hearing, the former partner made an offer to accept a payment of $30,000 for costs.  Ms Odlum told her solicitor that she did not want to pay any of her former partner’s costs. The offer was rejected and a counteroffer was put that the parties bear their own costs. On the day before the costs hearing the former partner made a second costs offer of $23,000.

The offer was not accepted, the costs hearing went ahead and Macready AsJ ordered Ms Odlum pay 75 per cent of her former partner’s costs on an ordinary basis. This amounted to approximately $98,000.

Just short of six years later, Ms Odlum filed a statement of claim against her solicitor and barrister, alleging negligence and misleading and deceptive conduct in relation to the advice they gave her about the costs offers. The solicitor had advised Ms Odlum of the second costs offer by email on the day it was received and had a handwritten file note dated the day of the costs hearing which, he said, recorded the advice given on the day prior to the commencement of the hearing. Ms Odlum asserted there had been no conference with her prior to the commencement of the costs hearing and the file note only recorded what she was told after the hearing.

Cavanagh J heard the matter at first instance and preferred the solicitor’s evidence about the conference taking place before the costs hearing rather than after it, noting:

‘The first defendant’s records demonstrate that he was always prompt in advising the plaintiff about any offers. The plaintiff was present in Court on the day of the hearing. It makes no sense for the first defendant not to have discussed the second costs offer with her, particularly when he had sent it to her the evening before and it is clear that he believed that she should be seriously considering the costs offer. The first defendant’s oral evidence as to what happened on the day is consistent with the evidence of the second defendant and corroborated by the file note’ (at [175]).

Ms Odlum’s appeal was dismissed with the Court of Appeal referring to the documentary record supporting Cavanagh J’s findings that the solicitor and barrister were not negligent.

Practice tips

• Always promptly communicate offers of settlement to your client and confirm in writing any advice given and instructions received in relation to the offer.
• When making a file note of a meeting, make a note of the time as well as the date, the place where the meeting is happening and the names of all persons present.
• And, of course, ensure that your file notes record any advice given as well as instructions received.

Jen McMillan is Manager, Practice Support Services, Lawcover and Accredited Specialist in Wills and Estates.