Professional Liability Guide

CHAPTER 1 – DUTIES

There was no written retainer. Rather, the clients asserted that the retainer was predicated on the solicitor’s nomination as their legal representative in the contract of sale they entered into to purchase the unit. Justice Ann Lyons found that a retainer had been created, although not by reference to nomination of the solicitor in the contract of sale but by reference to a subsequent course of correspondence between the solicitor and the solicitors for the vendor.

As to the nature of the duty owed by the solicitor, her Honour referred to Littler v Price, in which Jerrard J held:

‘the solicitor’s obligations included those of perusing and advising on documents executed before the solicitor was retained, and to advise on any unusual benefits the documents conferred or any unusual burdens or detriments which it imposed. The retainer is also similar in terms to that found in Fox v Everingham and Howard (1993) 50 ALR 337-338, namely to “represent his wife and himself in the purchase of the house”. The Full Federal Court held, and again I agree, that the retainer included an obligation to explain the salient points of the contract to the purchasers, any provisions of it which were in an unusual form and which might affect their interests as they were known by the solicitors, and to give attention to the question of whether the contract contained adequate provisions from the point of view of the purchasers to protect them against a variety of contingencies which might have reasonably been foreseen as likely to arise “if things did not go as expected”. The Court summarised the solicitor’s obligations as being that the purchasers were entitled to rely on the solicitors to see if the contract was adequate to protect their interests.’ 18 Disputes of this nature will often involve direct contests of oral evidence, which make a definitive determination of the scope and extent of a professional’s obligations even more difficult. Accordingly, best practice dictates that professionals (and clients alike) should always seek to ensure they: 1. record the retainer in writing; 2. properly identify the parties to the retainer, the services that are/are not to be provided, and when and how the retainer is to commence and conclude; 3. duly execute the retainer (or, as a fallback, permit acceptance via conduct, such as the provision of instructions by the client to proceed with the services to be performed under the retainer); and 4. keep the retainer current throughout the life of the agreement, with any changes (for instance, to the identity of the parties or the scope of the services) being appropriately recorded and either countersigned or confirmed in writing. Implied terms Implying contractual terms into a retainer is equally important. At the least, courts will readily imply into a contract of professional services a term requiring the professional to exercise reasonable care in providing the services.

18 [2005] 1 Qd R 275, 277.

5

© Carter Newell 2023