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Immunity from Lawyer Malpractice – Uniquely Australian

February 27, 2023

Immunity from Lawyer Malpractice – Uniquely Australian

The following article was contributed by Valerie Blacker, a commercial litigator focusing on funded litigation, and John Speer, a lawyer in the Dispute Resolution and Litigation Team at Piper Alderman. While large class actions receive the lion’s share of media attention, litigation financiers also regularly fund litigation involving a single plaintiff. Given that solicitors are required to maintain professional indemnity insurance, they can be, in instances of negligence, an attractive prospect for financiers: they are well-resourced and have the capacity to satisfy any judgment awarded against them. The Brisbane Litigation team at Piper Alderman have brought successful professional negligence claims against our clients’ former solicitors involving both funded and unfunded arrangements.[1] This article discusses a common defense raised in these types of proceedings – the advocates’ immunity. The immunity in brief In Australia, the advocacy function is immune from a negligence claim.  The immunity applies to a lawyer’s work in the court room. The immunity is rooted in the public policy principle that there should be finality in litigation. It prevents unsuccessful parties from seeking to re-litigate disputes by way of a collateral attack on their lawyers’ performance in court. A barrister mainly appears in court, and a solicitor mainly performs legal work outside of court.[2] But why does it matter? If a lawyer has been negligent, shouldn’t the client be able to seek relief? Apparently not – in some jurisdictions. Despite having been abolished in the United Kingdom and even in New Zealand, advocates’ immunity remains firmly in place in Australia. Indeed, there were at least eighteen court actions in 2022 that have made reference to the immunity as a defense. Avenues for redress The immunity is often called upon by solicitors performing ‘out-of-court’ work, but which (so the argument goes) is so ‘intimately connected to the conduct of the case in court’. In two recent examples, the immunity applied to shield a solicitor for failing to present evidence that should have been presented (Golden v Koffel [2022] NSWCA 8), and was extended to protect a solicitor who had given faulty advice (Jimenez v Watson [2021] NSWCA 55). If a solicitor’s negligent work was actually done in court in the course of a hearing or was done out of court but which led to a decision affecting the conduct of the case in court, the alternative options for an aggrieved client are frankly inadequate. For example, (1) an unsuccessful party may apply for an order that his or her solicitor be made personally liable for the successful party’s costs in the litigation; (2) an aggrieved client can challenge a solicitor’s bills through an application to the court for a costs assessment; and (3) disciplinary action can be taken which can result in a fine, a reprimand or in a solicitor being disqualified from practice. At best these alternative options may reduce a client’s costs but none of them will truly compensate a client for the wrongs caused by a lousy solicitor. Narrowing the scope of the immunity In a more positive move, the Courts have now made it clear that the immunity does not extend to a solicitor’s work in bringing about a settlement agreement (as an agreement between parties to settle is not an exercise of judicial power).[3] It is also now possible to be compensated for the expense of engaging new lawyers.[4] NT Pubco Pty Ltd v Strazdins is also notable. The Court there held that a failure to advise clients to seek independent legal advice was held to be likely outside the immunity.[5] The relevant wrong in that case concerned a failure by solicitors to relay to their client comments made by the court at several interlocutory hearings that the client should have been pursuing a particular kind of relief in its litigation. That would be akin to failing to commence proceedings in time. That too should fall outside of the immunity as the aggrieved client’s cause of action was complete and whole before the proceedings were started and the negligent conduct was completely separate from the litigation. The primary justification for retaining the advocates’ immunity is to ensure the finality of judicial determinations. However, if a client brings a negligence suit against a former solicitor is that not also a separate proceeding that deals with a different issue? As Kirby J warned, upholding the immunity not only reduces equality before the courts, but is capable of breeding contempt for the law. His Honour questioned ‘why an anomalous immunity is not only preserved in Australia but now actually enlarged by a binding legal rule that will include out-of-court advice and extend to protect solicitors as well as barristers’.[6] In these circumstances, can the reasons traditionally given for the immunity still persuade, particularly when the rest of common law world has abolished it? At the risk of offending the doctrine and re-litigating this issue, perhaps we should continue the debate. About the Authors: Valerie Blacker is a commercial litigator focusing on funded litigation. Valerie has been with Piper Alderman for over 12 years. With a background in class actions, Valerie also prosecutes funded commercial litigation claims. John Speer is a lawyer in the Dispute Resolution and Litigation Team located in Brisbane, Prior to joining Piper Alderman John was an associate to the Honourable Justice B J Collier in the Federal Court of Australia, as well as to Deputy President B J McCabe in the Administrative Appeals Tribunal. John has also worked as a ministerial adviser and chief of staff in the Parliament of Australia.   For queries or comments in relation to this article please contact John Speer | T: +61 7 3220 7765 | E:  jspeer@piperalderman.com.au [1] These matters resulted in a confidential settlement. [2] New South Wales and Queensland have a ‘split’ profession, meaning that the roles of barrister and solicitor are separated. [3] Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1,  [5], [38], [39], [45], [46], [53]. [4] Legal Services Commissioner v Rowell [2013] QCAT OCR207-12. [5] [2014] NTSC 8 at [134] and [137]. [6] D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1, 109 [346].

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UK Government Signals Funding Crackdown in Claims Sector Reform

By John Freund |

The UK government has signalled a renewed regulatory focus on the claims management and litigation funding sectors, as part of a broader effort to curb what it characterises as excessive or speculative claims activity. The move forms part of a wider review of the consumer redress and claims ecosystem, with third-party funding increasingly drawn into policy discussions around cost, transparency, and accountability.

An article in Solicitor News reports that ministers are examining whether litigation funding and related financial arrangements are contributing to an imbalance in the claims market, particularly in mass claims and collective redress actions. While litigation funding has historically operated outside the scope of formal regulation in England and Wales, policymakers are now considering whether additional oversight is required to protect consumers and defendants alike. This includes potential scrutiny of funding agreements, funder returns, and the role of intermediaries operating between claimants, law firms, and capital providers.

The renewed attention comes amid political pressure to rein in what critics describe as a growing “claims culture,” with the government keen to demonstrate action ahead of future legislative reforms. Industry stakeholders have cautioned, however, that overly restrictive measures could limit access to justice, particularly in complex or high-cost litigation where claimants would otherwise be unable to pursue meritorious claims. Litigation funders have long argued that their capital plays a stabilising role by absorbing risk and enabling legal representation in cases involving significant power imbalances.

While no formal proposals have yet been published, the article suggests that funding models linked to claims management companies may face particular scrutiny, especially where aggressive marketing or fee structures are perceived to undermine consumer interests. Any regulatory changes would likely build on existing reforms affecting claims management firms and contingency-style legal services.

Case Developments Commercial

Litigation Lending Funds Woolworths Shareholder Class Action

By John Freund |

Litigation Lending Services Limited has agreed to fund a large-scale shareholder class action against Woolworths Group Ltd, adding another high-profile Australian securities claim to the growing docket of funded investor litigation. The proceeding has been filed in the Federal Court of Australia by Dutton Law and focuses on Woolworths’ alleged failure to properly disclose the financial impact of widespread employee underpayments over a lengthy period.

Litigation Lending's website notes that the claim covers shareholders who acquired Woolworths shares between 26 February 2010 and 8 September 2025. It alleges that Woolworths did not adequately record and account for employee entitlements owed to salaried staff, resulting in financial statements that understated expenses and overstated profits. According to the pleadings, these accounting issues had the effect of artificially inflating Woolworths’ share price, causing losses to investors once the extent of the underpayments began to emerge through company disclosures.

Woolworths has previously acknowledged underpayment issues across its workforce, announcing remediation programs and provisions running into the hundreds of millions of dollars. The class action contends that the company’s disclosures came too late and failed to provide the market with an accurate picture of its true financial position during the relevant period. Investors who purchased shares while the alleged misstatements were in place are now seeking compensation for losses suffered when the share price adjusted.

Participation in the class action is open to eligible shareholders on a no-cost basis, with Litigation Lending covering the legal costs of running the claim. Any funding commission or reimbursement payable to the funder would be subject to approval by the court, consistent with Australia’s regulatory framework for funded class actions.

Commercial Regulatory Issues

Federal Legislation Targeting Foreign Litigation Funders Raises Industry Alarm

By John Freund |

A new federal bill seeking to restrict foreign investment in U.S. litigation is drawing sharp criticism from international litigation funders who warn the measure could significantly disrupt the industry. The legislation, introduced by Rep. Ben Cline (R-Va.), would prohibit sovereign wealth funds from backing U.S. lawsuits and impose disclosure requirements on overseas investors participating in American litigation.

According to Bloomberg Law, the proposed bill (H.R. 2675) has major implications for prominent funders including Burford Capital, Fortress Investment Group, Omni Bridgeway, Ares Management, and BlackRock. Susan Dunn of UK-based Harbour Litigation Funding characterized the current political climate as increasingly "anti-foreign," suggesting that international funders are now reassessing their U.S. growth strategies in light of the legislative push.

The bill advanced from the House Judiciary Committee with a 15-11 vote in favor of recommending it to the full House. Supporters of the legislation argue that foreign investment in U.S. litigation raises national security concerns and could allow hostile nations to influence American legal proceedings. Critics counter that the measure unfairly targets legitimate business practices and could reduce access to justice by limiting available capital for plaintiffs pursuing meritorious claims.

The legislation represents the latest effort in a years-long campaign by insurance industry groups and business organizations to increase regulation of third-party litigation funding. If enacted, the restrictions on foreign investment could reshape the competitive landscape of the U.S. litigation finance market, where international funders currently play a significant role.