Cost order against solicitor who did not seek expert evidence

Thursday, 17 October 2024

Forensic Partner Ben Mahler considers a NSW Supreme Court decision where the plaintiffs’ solicitor was ordered to pay the costs of a trial in circumstances where they advised their client no expert evidence was needed to prove their case.

KordaMentha is releasing Expert Evidence: Recent Cases Edition 3 this month. If you would like a complimentary copy of the eBook, click here to register your interest. In addition to the 40 case reviews and 5 articles in that book, KordaMentha has identified and summarised approximately 300 cases of potential interest in the book. This case (Nahata v Robertson (No 2) [2023] NSWSC 1297) was summarised as follows:

Plaintiffs’ solicitor failed to appropriately advise his clients to engage an expert, and demonstrated misunderstanding of the legal position by advising that it was unnecessary to respond to the defendants’ expert’s report. Court determined serious incompetence, misconduct, or neglect, and ordered that solicitor pay costs for which the plaintiffs were found liable (on an indemnity basis).

The plaintiffs in these proceedings sought a drainage easement over the defendants’ property. The plaintiffs lost those proceedings, and the defendants sought costs on an indemnity basis, because of alleged unreasonable conduct by the plaintiffs.

Justice Peden found that (among other things), the conduct of the plaintiffs through their solicitor was inconsistent with the overriding purpose of the Civil Procedure Act 2005 (NSW) (‘CPA’), as well as specific statutory provisions relevant to the dispute. It was found that the CPA requires the “highest standards of integrity” from lawyers and the court may make a wasted cost order against a legal practitioner where these are breached.

Citing prior cases, Justice Peden found such a cost order is (in part) to “protect clients from a legal practitioner’s serious dereliction of duty, or otherwise serious misconduct or gross negligence” and that the court needed to establish:

1. There was an improper, unreasonable, or negligent act;
2. Such act caused unnecessary costs; and
3. It is just, in all the circumstances, to order compensation.

Specifically in respect of expert evidence, Justice Peden found the plaintiffs’ solicitor:

1. Did not obtain expert evidence in respect of whether the proposed easement ought to be imposed on the defendants, despite the defendants having raised concern about its impact on an existing retaining wall and other improvements.
2. Advised the plaintiffs that there was “no need for an independent expert report in this case”.
3. Persisted in that advice despite receiving a detailed engineering report from the defendants which identified multiple concerns with the proposed drainage easement.
4. Attempted to make submissions regarding a technical engineering concept and “prove” that concept by reference to a legal judgment rather than submitting expert evidence specific to his clients’ case.

In respect of the above, Justice Peden found that the solicitor’s conduct showed “a fundamental misunderstanding about what was necessary for his clients to prosecute their particular case.”

Justice Peden found that this was not a case “where some evidence or witness failed to provide support for the case... Instead, here, there was no evidence... I consider that [the solicitor’s] conduct caused the costs of the whole proceedings to be wasted. I consider it just to order that [the solicitor] compensate the plaintiffs for the wasted costs.”