By Malcolm Cameron and Gina Tasoulis -
Snapshot
- Claims by third parties against solicitors are not uncommon.
- Solicitors should be alive to the risk of third-party claims when framing their communications with other parties, especially those who do not have a solicitor acting.
- This article will discuss best practice when it comes to third-party claims of misleading or deceptive conduct and accessorial liability in particular.
Solicitors have obligations to their clients and fulfilling these obligations comes with a level of risk. But, clients aren’t the only potential source of risk. Solicitors may also face claims from non-clients, including opposing parties. There are two main ways in which third parties seek to impose liabilities on solicitors: the misleading or deceptive conduct provisions of the Australian Consumer Law, and accessorial liability in a variety of legislative and general law contexts. These are not the only ways a solicitor might be liable to a third party but they are our focus here.
Misleading or deceptive conduct
As is well known, section 18 of the Australian Consumer Law prohibits misleading or deceptive conduct in trade or commerce. Section 236 makes damages available to anyone who suffers loss by the prohibited conduct. As trade or commerce includes any business or professional activity (see Kowalczuk v Accom Finance Pty Ltd [2008] NSWCA 343), this applies to solicitors.
The prohibition is very broad. It prohibits conduct that is either misleading or deceptive or that is likely to mislead or that is likely to deceive. A solicitor can mislead someone quite inadvertently, so the threshold is low.
