- Solicitors are permitted by statute to take security for their costs from clients
- However, such arrangements are susceptible to being set aside if the solicitor does not abide by applicable equitable, legal and statutory duties.
- The taking of security for costs should be approached carefully, if at all, with due attention to the special position in which a solicitor stands in relation to his or her client.
There was a time when solicitors were not permitted to take security from their clients for costs. That position was abrogated for non-contentious business in the UK in 1870 by the Attorneys’ and Solicitors’ Act 1870 (UK) (33 & 34 Vict c 28) and in New South Wales by the Conveyancing Act 1919. It was not until 1984 that an amendment to the Legal Practitioners Act 1898 permitted a solicitor to take security for future costs in both contentious and non-contentious matters. A right to take security has existed since that time in successive legislative provisions and is now contained in s 206 of the Legal Profession Uniform Law (NSW). A history of the right to take security is the subject of detailed consideration in Malouf v Constantinou  NSWSC 923 (‘Constantinou’) at –, from which much of the content of this article is drawn.