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  • The High Court has considered advocates’ immunity in the context of settlement advice once again.
  • Advocates’ immunity does not extend to advice or work relating to out-of-court settlements. There is no difference in principle between advice to settle a dispute and advice to reject a settlement offer.
  • Advocates’ immunity only exists in relation to work that has a ‘functional relationship’ with the court’s decision.

On 29 March 2017, the High Court of Australia delivered its judgment in Kendirjian v Lepore [2017] HCA 13 (‘Kendirjian’). The case concerned the scope of advocates’ immunity in the context of negligent settlement advice.

This is the second time that the Court has considered the subject in as many years. In 2016, the Court handed down its decision in Attwells v Jackson Lalic Lawyers Pty Limited [2016] HCA 16 (‘Attwells’). In Attwells, the appellants claimed that earlier litigation to enforce a guarantee was settled on unfavourable terms because of negligent advice given by the respondent, the appellants’ solicitor at the time. A majority of the Court held that advocates’ immunity does not extend to work that leads to settlement of disputes out of court.

Kendirjian concerned advice to reject an offer of compromise leading to the continuation of proceedings to final judgment. Consistent with its decision in Attwells, the High Court held that the respondents were not immune from liability. To a large degree, Kendirjian is a restatement of the principles expressed in Attwells. Justices Nettle and Gordon, who wrote separate dissents in Attwells, accepted that they were bound to follow its authority in Kendirjian. As a result, the question of advocates’ immunity in the context of out-of-court settlements has largely been resolved.

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