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Looks Dubious – The Third Ground to Restrain a Lawyer from Acting

April 5, 2023

Looks Dubious – The Third Ground to Restrain a Lawyer from Acting

The following piece was contributed by Valerie Blacker, commercial litigator focusing on funded litigation, and Amelia Atkinson, litigation and dispute resolution lawyer at Piper Alderman. Strata Voting Pty Ltd (In Liq) v Axios IT Pty Ltd and Anor[1] is a funded single plaintiff action. It involved a recent examination of the Court’s power to prevent a lawyer from acting in proceedings for a conflict of interest. The authors represented Strata Voting in its successful defense of the restraint application. The Third Ground Less frequently invoked than the first and second grounds (misuse of confidential information and breach of fiduciary duty), the third category upon which to restrain a lawyer in a position of conflict from acting in a matter is known as the “inherent jurisdiction” ground. The Court can restrain lawyers from acting in a particular case as an incident of its inherent jurisdiction over its officers and control of its processes.[2] The jurisdiction is enlivened where there is an objective perception that a lawyer lacks independence such that the Court is compelled to interfere and remove the lawyer from acting in the matter. In other words, the position of the lawyer makes the Court uneasy. The test for intervention is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice, including the appearance of justice, requires that a legal practitioner should be prevented from acting.[3] Axios’ failed application The jurisdiction to enjoin a solicitor from acting is to be regarded as exceptional, and to be exercised by the court with caution. That was the basis on which his Honour Judge Dart of the South Australian Supreme Court dismissed the application brought to restrain Piper Alderman from acting for the liquidators. Here, Piper Alderman is acting for the company in relation to a dispute which was in existence before the winding up commenced.  The liquidator retained Piper Alderman to continue acting for the company for the purpose of the litigation, the subject of the existing dispute. The supposed conflict was said to have arisen from a proof of debt which Piper Alderman lodged for about $47,000 in fees incurred prior to the administration. The argument was that Piper Alderman’s impartiality was impaired by the fact that unless the litigation is successful, Piper Alderman will not be paid its outstanding fees because there will be no funds in the winding up to do so. Axios contended that “the conduct of the solicitor was so offensive to common notions of fairness and justice that they should, as officers of the Court, be restrained from acting”. However, his Honour considered the firm’s status as creditor to be unremarkable. Even in a case where a substantial sum (over $830,000) was owed to lawyers by their insolvent client,[4] there was no risk to the proper administration of justice. As everyone knows, solicitors routinely act in matters where they are owed money including conditional costs agreements, risk share arrangements, contingency fee arrangements and agreements that include uplift fees, to name a few. The restraint application in Strata Voting was unsurprisingly and swiftly[5] dismissed with costs. Conclusion If an opposing party asserts that a lawyer should be restrained from acting for the opponent, it is necessary for a clear case to be made that the lawyer is in a position where he is fixed with an interest of such a nature that he may fail in his overriding duty to the court. It requires proof of facts, and not mere speculation as to motive. The risk to the due administration of justice has to be a real one. Otherwise, a litigant ought not to be deprived of the lawyer of his choice. — 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. Amelia Atkinson is a litigation and dispute resolution lawyer at Piper Alderman with a primary focus on corporate and commercial disputes. Amelia is involved in a number of large, complex matters in jurisdictions across Australia. For queries or comments in relation to this article please contact Amelia Atkinson | T: +61 7 3220 7767 | E:  aatkinson@piperalderman.com.au [1] Unreported, Supreme Court of South Australia, Dart J, 23 January 2023 (Strata Voting). [2] Kallinicos & Anor v Hunt [2005] NSWSC 118 at [76] (Kallinicos). [3] Ibid. [4] Naczek & Dowler [2011] FamCAFC 179, [84]. [5] In a 5-page judgment.

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Commercial People Moves

Red Lion Chambers Hires Former Harbour Director for Client Role

By John Freund |

Red Lion Chambers has taken a notable step in strengthening its engagement with litigation funders and commercial clients by appointing a former senior figure from the funding industry into a newly created client-facing role. The move reflects the increasingly close relationship between the UK Bar and third-party litigation finance, particularly in complex commercial and group actions where funding strategy and legal execution are closely intertwined.

An article in Global Legal Post reports that Red Lion Chambers has appointed James Hartley, formerly a director at Harbour Litigation Funding, as its first director of client relationships. In this newly established position, Hartley will be responsible for developing relationships with solicitors, funders, and other clients, as well as helping to align the chambers’ barristers with funded opportunities across commercial litigation, arbitration, and competition claims.

Hartley brings several years of experience from the funding side of the market, having worked at Harbour Litigation Funding where he was involved in evaluating claims, structuring funding arrangements, and working closely with law firms and counsel on strategy. His move to Red Lion Chambers underscores the value chambers are placing on individuals who understand both the legal and financial dynamics of funded disputes, as well as the commercial drivers behind claim selection and case management.

According to the report, Red Lion Chambers sees the appointment as part of a broader effort to modernise how barristers’ chambers engage with the market, particularly as clients and funders increasingly expect a more coordinated and commercially aware approach from counsel. The role is intended to complement, rather than replace, the traditional clerking function, with a specific focus on strategic relationships and long-term growth areas.

Case Developments Commercial

Longford Capital and Susman Godfrey Sued Over $32m Arbitration Award

By John Freund |

A new lawsuit has placed litigation funder Longford Capital Corp and prominent US trial firm Susman Godfrey LLP at the center of a high-stakes dispute over the ownership and allocation of arbitration proceeds, highlighting the growing complexity and occasional friction in funded litigation arrangements. The case stems from a roughly $32 million arbitration award tied to patent litigation recoveries and raises questions about the enforceability of funding agreements, arbitration clauses, and the definition of recoverable proceeds.

An article in Reuters reports that the lawsuit was filed in Texas state court by Arigna, an Ireland-based patent monetization company that previously worked with Susman Godfrey to pursue semiconductor-related patent claims. Arigna alleges that it was improperly forced into arbitration and that the resulting award in favor of Longford was tainted by arbitrator misconduct. According to the complaint, Arigna is seeking to have the arbitration award vacated and to recover approximately $5.5 million in settlement funds currently held in escrow.

The dispute traces back to a funding arrangement entered into after Arigna retained Susman Godfrey to pursue patent enforcement actions. Susman subsequently secured third-party litigation financing from Longford Capital. Tensions emerged over how Longford’s entitlement to proceeds should be calculated, particularly in relation to settlements involving multiple defendants and intellectual property assets that Arigna claims were outside the scope of the original funding deal. An earlier federal court battle over whether the dispute belonged in court or arbitration ultimately resulted in the matter being sent to arbitration, where the arbitrator ruled in Longford’s favor.

Now, Arigna argues that the arbitration should never have occurred and that Longford and Susman overreached in asserting rights to settlement proceeds. Longford has defended the award as valid and enforceable, while Susman Godfrey is also named as a defendant due to its role in structuring and executing the underlying legal and funding arrangements.

Case Developments Commercial

LitFin Backs €250m Antitrust Claims for Farmers

By John Freund |

LitFin, the Prague-headquartered litigation financier, has reached a major procedural milestone in one of Europe’s largest coordinated private antitrust actions, backing claims on behalf of more than 1,700 agricultural businesses harmed by a long-running pesticide cartel in Germany. In December 2025, damages claims approaching €250 million, including interest, were formally filed against wholesale distributors of plant protection products found to have engaged in unlawful price-fixing over nearly two decades.

LitFin reports that the claims are grounded in binding findings by Germany’s Federal Cartel Office, which determined that cartel conduct spanned from 1998 to 2015 and covered almost the entire market for plant protection products. That infringement resulted in administrative fines totaling approximately €157 million. Under German and EU competition law, such findings create a strong presumption that purchasers paid unlawful price surcharges during both the cartel period and its after-effects—forming the economic basis of the damages now being pursued by affected farmers.

The lawsuit has been filed by WAGNER LEGAL Rechtsanwälte PartG mbB, a Hamburg-based firm specializing in antitrust damages litigation, working in close coordination with the funder. According to LitFin, the claims are supported by a comprehensive economic analysis prepared by competition experts at Charles River Associates, quantifying the alleged overcharges suffered by claimants across the German agricultural sector.

For the agricultural businesses involved, the filing represents more than just a legal step forward. Without third-party funding, coordinating and prosecuting claims of this scale against well-resourced defendants would likely have been impractical. LitFin’s involvement enabled aggregation of claims, risk-sharing, and the deployment of specialist legal and economic expertise across a complex, multi-claimant proceeding.