Wednesday, April 20, 2011

Dimos v Hanos & Egan [2001] VSC 173 - recovery of counsel's fees

I was recently involved in a matter in which a barrister was suing for fees, and the solicitor was defending the proceeding on the basis that it was merely the agent of the client, and had no liability to the barrister.

The matter of Dimos v Hanos & Egan [2001] VSC 173 (Dimos) is a fairly comprehensive discussion of the law concerning who is liable when a solicitor briefs a barrister. It also has a good discussion of the history of recovering barrister's fees. Dimos is authority for the proposition that who is liable for counsel's fees is a question of fact to be determined on an objective basis and rests upon the principles of contract law. I have included below a summary of Dimos and extracts on the law concerning this issue.

The facts in Dimos are simple: a solicitor from a firm of solicitors briefed a barrister three times and didn't pay the barrister's fees when they were rendered. The barrister sued for his fees in the Magistrates' Court of Victoria and the solicitor defended the action claiming that it was the agent of the client and therefore had no liability towards the barrister. The barrister was successful and the solicitor appealed to the Supreme Court of Victoria.

In the Magistrates' Court of Victoria, Magistrate Lauritsen held as follows:
I would say as a general rule if a person in the position of a solicitor engages a person in the position of a barrister to perform work on behalf of the solicitor's client, then a contract to perform that work is between the solicitor and the barrister. The solicitor is not acting as an agent for the client and the contract is not between the barrister and the client and there is certainly nothing in this case which would cause it to be an exception to the general rule that I have just postulated.
In the Supreme Court of Victoria, Gillard J found for the barrister. However Gillard J at [37] held that there was no such 'general rule' and that the Magistrate misdirected himself. Gillard J made the following observations:
The solicitor is in complete control of the situation. He knows the client and should know his capacity to pay. The solicitor deals directly with the barrister. Common sense and fairness, in those circumstances, justifies a barrister refusing to enter into a contract to provide legal services to a client on the basis that the client is liable for the fees, and not the solicitor (at [86]).
It is open to the solicitor to negotiate a contract which is solely between the barrister and the client. Also, the solicitor may be a party to an agreement and exonerate himself from any liability to pay the fees (at [88]).
Whether a contract has come into being, whether the parties intend to make a concluded and binding contract, the terms and who the contracting parties are, are all questions of fact to be determined on an objective basis (at [89]).
In the normal course of events, a client who retains the services of a solicitor, engages the solicitor to provide professional services for him. In providing those services, the solicitor may advise the client that it is necessary to brief a barrister to provide specialist services. For example, it may be necessary to retain a barrister to appear in court. Retention of a barrister is, in part, satisfaction of the provision of legal services by the solicitor. In the absence of any contrary evidence, the retention of the barrister would result in a contract between the barrister and the solicitor (at [100]).
Gillard J, giving reasons at [107] to [113], considered that the relevant agreement was between the solicitor and barrister. A summary of the reasons follow:
  1. In each instance a back-sheet was delivered to the barrister from the solicitor and nothing was on the back-sheet which suggested that there was a retainer between the barrister and client. In fact, the back-sheet was endorsed by the firm of solicitors.
  2. In each instance, there was no evidence of discussions to the effect that the retainer was between the barrister and client. In fact, there was evidence of a discussion in relation to one brief where the solicitor said that his firm would pay.
  3. In each instance there was no evidence from the solicitor that the client expressly authorised the solicitor to brief the barrister and bring into existence a contract between the barrister and the client.
  4. The retainer between the solicitor and the client authorised the solicitor to retain counsel, but that authority did not extend to bringing into existence a contract between the barrister and the client.
  5. In each instance, when the work was completed, the back-sheet with the marked fee was returned to the solicitor.

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