Solicitor not an ILP can not recover Costs.

Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29

Practice and procedure – Costs – Legal practitioners – Barristers – Where self-represented litigant may not obtain any recompense for value of his or her time spent in litigation – Where exception commonly referred to as "Chorley exception" exists for a self-represented litigant who is a solicitor – Where first respondent is a barrister – Where first respondent undertook legal work in litigation in which she was represented – Where first respondent incurred costs on her own behalf and for legal services provided by herself – Whether Chorley exception operates to benefit barristers – Whether Chorley exception recognised as part of common law of Australia.

The Appellant appealed a decision of the NSW Court of Appeal to allow the a Barrister to recover her costs of litigation. The primary question was whether the London Scottish Benefit Society v Chorley (1884) 13 QBD 872 – The Chorley Exception applied to Self-Represented Solicitors. The Court further clarified the position as to that in Cachia v Hanes (1994) 179 CLR 403 where it was held that Solicitors could recover their costs of litigation, however Barrister could not.

The Court referred to Cachia where it weld held at 410 “that costs are awarded by way of ... partial indemnity ... for professional legal costs actually incurred in the conduct of litigation”. The Court questioned the proposition that a Solicitor can recover Costs merely on the basis that their fees could be quantified as outlined in Chorley at 877 [21]. The Respondent also argued that the word “Renumeration” should encompass “Costs” as outlined in the Chorley exemption and s3(1) of the Civil Procedure Act . The Court rejected this argument and held that the word “renumeration” is not applicable to payments to oneself.[44]

The Court also held that is was not proper for a Legal Practitioner to act for themselves as a matter for professional ethics and in respect to the duty of impartiality. [19] In McIlraith v Ilkin (Costs) 2007] NSWSC 1052 at [25] Brereton J held that “Where a solicitor acts for himself or herself there cannot be independent and impartial advice, and this is in principle a strong reason for holding that a solicitor litigant should not be entitled to costs of acting for him or herself”. [19] and affirmed in the Australian Solicitors Conduct Rules [20].

The Court held that the Chorley exception does not apply to Australia. However was remains open is whether a Sole Director and Solicitor in an incorporated legal practice is entitled to recover costs [51]. It affirmed that a Solicitor could claim for the work of Staff employed by the Solicitor or the practice where the Solicitor incurred what is effectively an outlay when following Chorley at 877 [91] as is the case for employed Solicitors by Corporations and Government [72]