By Michael Legg -
Snapshot
- In-house counsel has the same professional and ethical obligations as any other legal practitioner, including the duty to the court and the administration of justice, and the duty to avoid any compromise to their integrity and professional independence.
- In ASIC v Bekier (Liability Judgment), the General Counsel and later Chief Legal and Risk Officer of The Star Entertainment Group breached the duty of care and diligence in s 180 of the Corporations Act 2001 (Cth) by not putting information about various money laundering risks before the Board. While there was a duty to advise, the Court found no duty to ‘take steps’ or recommend action.
- For in-house lawyers, the client is the company that employs them and not those who manage the client, such as the CEO, other individuals in senior management positions, the directors of the Board themselves or other employees.
In Alfred Crompton Amusement Machines Ltd v Customs and Excise Commissioners (No 2) [1972] 2 QB 102 at 129 Lord Denning stated that in-house counsel: ‘are regarded by the law as in every respect in the same position as those who practice on their own account. The only difference is that they act for one client only, and not for several clients. They must uphold the same standards of honour and etiquette. They are subject to the same duties to their client and to the court. They must respect the same confidences. They and their clients have the same privileges.’
Some 50 years later in ASIC v Bekier (Liability Judgment) [2026] FCA 196 (at [1639]), Lee J observed that as a solicitor who was The Star Entertainment Group Limited (‘Star’s) Group General Counsel, and then Chief Legal and Risk Officer (‘CLRO’), Ms Martin not only had the same professional and ethical obligations as any other legal practitioner but was required to comply with statutory and regulatory norms governing the conduct and obligations of the profession. Moreover, Lee J observed that ‘a lawyer’s obligations to the company that employs them cannot override their paramount duties’ (at [1624] citing Giannarelli v Wraith (1988) 165 CLR 543 at 555). The paramount duties are the duty to the court and the administration of justice, as well as other fundamental ethical duties, such as the duty to avoid any compromise to a lawyer’s integrity and professional independence.
