Relations with clients

This section contains Rules 7-16

7.1 A solicitor must provide clear and timely advice to assist a client to understand relevant legal issues and to make informed choices about action to be taken during the course of a matter, consistent with the terms of the engagement.
7.2 A solicitor must inform the client or the instructing solicitor about the alternatives to fully contested adjudication of the case which are reasonably available to the client, unless the solicitor believes on reasonable grounds that the client already has such an understanding of those alternatives as to permit the client to make decisions about the client’s best interests in relation to the matter.

Clear and timely advice

The solicitor’s duty is to assist the client to understand the relevant legal issues and to make informed choices about potential actions. In particular, the solicitor must provide clear and timely advice on the risks of the transaction and their consequences.¹⁴⁴ The retainer may specify that the advice required is limited to the legal risks and consequences and not commercial, or personal ones. The rule is a specific application of the fundamental ethical duties in rule 4.

The duty to advise may arise where advice is not specifically requested.¹⁴⁵

Alternative dispute resolution

To make an informed choice, a client needs to be aware of alternatives to litigation. Unless the solicitor has reasonable grounds to believe the client is aware of the alternatives, the solicitor must include them in their advice. The rule shifts focus away from litigation by ensuring that an otherwise unaware client makes informed choices on alternatives to the fully contested adjudication of cases.

^{144. Fox v Everingham (1983) 50 ALR 337; Henderson v Amadio Pty Ltd (No 1) (1995) 62 FCR 1.

145. Littler v Price [2005] 1 Qd R 275, [51]; Yates Property Corporation v Boland (1998) 85 FCR 84; Robert Bax and Associates v Cavenham Pty Ltd [2012] QCA 177.}

8.1 A solicitor must follow a client's lawful, proper and competent instructions.

Lawful and proper

Solicitors must not engage in dishonest, illegal, or unprofessional behaviour which is likely to be prejudicial to, or diminish public confidence in, the administration of justice. A solicitor must not seek to advance their client’s interests in an unfair or dishonest way.¹⁴⁶ Solicitors should not knowingly assist a client, another lawyer, or a third party to breach the law.

The paramount duty must prevail even if the client gives instructions to the contrary. In Kyle v Legal Practitioners’ Complaints Committee, Ipp J said:

It is a basic precept of the legal profession that lawyers owe a duty of honesty and candour to the court. It is the general duty of lawyers not to mislead the court by stating facts which are untrue, or misled the Judge as to the true facts, or conceal from the court facts which ought to be brought to the Judger’s attention, or knowingly permit a client to deceive the court…Legal practitioners owe this duty when performing any act in the course of practising their profession, not only when making submissions to the court.¹⁴⁷

Amongst other professional obligations, what are considered lawful and proper instructions will be informed by rules 3, 9, 17, 19, 20 and 21.

Competent instructions

At common law, every adult is presumed to be competent to make decisions unless otherwise proven.¹⁴⁸ The onus of proof is on the person alleging incapacity or incompetence.¹⁴⁹

The tests for competency depend on the nature of the intended transaction. For those insured with Lexon, the Lexon checklist on capacity states those tests comprehensively. Age, incapacity, mental infirmity, or restraints on the exercise of free will may be factors. The tests for litigation and contract, enduring documents, and wills are discussed below.

For Queensland practitioners, see the Queensland Handbook for Practitioners on Legal Capacity.¹⁵⁰

Litigation and contract (capacity tests and comment)

The capacity required for a person to participate in legal proceedings is the same for a person to enter into legal transactions. Each party ‘shall have such soundness of mind as to be capable of understanding the general nature of what he is doing’.¹⁵¹ The question is whether the client can understand the nature of the legal consequences of the legal proceedings.¹⁵² This is a subjective test. It is designed to ‘ensure that plaintiffs and defendants who would otherwise be at a disadvantage are properly protected’.¹⁵³

The relevant issues will vary from case to case but will generally require that the litigant understands the ‘nature of the litigation, the purpose and its possible outcomes, including the risks in costs’.¹⁵⁴

When a client becomes incapacitated, their solicitor’s authority ends.¹⁵⁵ Even though there is a presumption of the client’s capacity to instruct, the solicitor must be satisfied of that capacity. Indeed, where ‘circumstances place the lawyer on notice that the client’s mental capacity is in issue, active consideration will be required’.¹⁵⁶ If a solicitor is not satisfied that the client has the mental capacity to instruct in the litigation, the solicitor must raise the issue with the court.¹⁵⁷ Supreme Courts have inherent jurisdiction to order that a litigant be independently examined for mental capacity.¹⁵⁸ In Till v Nominal Defendant,¹⁵⁹ the plaintiff’s action was stayed until his capacity to provide instructions and make decisions about his legal rights was established.

Not only does the authority end, but the solicitor has a duty of care not to follow instructions when a client lacks the mental capacity to give them. In Goddard Elliott v Fristch, Bell J found:

it always to be expected of a lawyer exercising ordinary skill and competence that they are reasonably satisfied of their client’s mental capacity to instruct…[and] the lawyer owed the client a duty of care not to take or act on instructions when it knew or should have known that he lacked the mental capacity to give instructions.¹⁶⁰

Justice Bell went on to find that:

[w]here the client does not have that capacity the lawyer does not have the authority to represent them in the proceeding, except for certain limited purposes, most particularly perhaps for the purpose of an inquiry into that question. I say perhaps because they are not really representing the client in that process, but rather assisting the court as an officer of the court.¹⁶¹

Enduring documents

Enduring powers of attorney and advance health directives are enduring documents.¹⁶²

When solicitors are requested to witness an enduring document they provide a certificate stating that, at the time the principal signed (or someone on behalf of the principal), the principal appeared to have the capacity necessary to make the enduring document.¹⁶³

A principal has capacity to make an enduring power of attorney,¹⁶⁴ or an advance health directive, only if the principal:

is capable of making the enduring power of attorney or advance health directive freely and voluntarily, and
understands the nature and effect of the enduring power of attorney/advance health directive.¹⁶⁵

To satisfy themselves that the principal does have the necessary capacity, the solicitor should be familiar with the Queensland Capacity Assessment Guidelines 2020 and the capacity assessment checklist.¹⁶⁶ Although the guidelines were introduced to assist in the assessment of an adult’s capacity for the purposes of the Guardianship and Administration Act 2000 (Qld), the definitions of ‘capacity’ in the Powers of Attorney Act 1998 (Qld) and Guardianship and Administration Act 2000 (Qld) are relatively the same.¹⁶⁷ It is important to note that the courts are not bound by the Capacity Guidelines.¹⁶⁸

The court is required to presume an adult has capacity for a matter until the contrary is proven.¹⁶⁹ This presumption may be rebutted if ‘the contrary is proven’ to the civil standard on the balance of probabilities but also to the Briginshaw standard.¹⁷⁰

The following five principles are contained within the Queensland Capacity Assessment Guidelines:

Always presume an adult has capacity. An adult should not be presumed to lack capacity due to their age, appearance, conduct and personal habits, beliefs, language and communication skills, or the presence of an intellectual disability or physical impairment.
Capacity is decision-specific and time-specific. An adult may lack capacity for some decisions but not others.
Provide the adult with the support and information they need to make and communicate decisions. As explained above, capacity can depend on the level of support and information available to them. All practicable steps should be taken to provide them with necessary information and support before a finding of impaired capacity can be made.
Assess the adult’s decision-making ability rather than the decision they make. A person may make a bad decision or take a risk but still have capacity to exercise the decision-making process.
Respect the adult’s dignity and privacy. Assessment should occur in a place with limited distractions. The person must be informed that they are being assessed and the consequences of the assessment must be explained to the person.¹⁷¹

In Adamson v Enever,¹⁷² Applegarth J identified some matters that are relevant to whether an adult is capable of making the enduring document freely and voluntarily.¹⁷³ These include:

that the adult making the decision is not being pressured or coerced into making the decision,
matters which might be considered as affecting the ability to freely and voluntarily make a decision include:
- family conflict
- the history of threats or perceived threats of violence
- the withdrawal of care and support
- sudden and out of character decisions to make changes to arrangements, and
merely seeking advice from another does not necessarily mean that the person has not acted freely and voluntarily in making the decision.

Section 41(1)(b) of the Powers of Attorney Act 1998 (Qld) requires that the adult understands the ‘nature and effect’ of the enduring power of attorney.¹⁷⁴ The matters listed in s 41(2) are inclusive and there may be other matters which are relevant to the consideration of understanding. Please see ss 42(1)-(2) regarding advance health directives considerations.

In Legal Services Commissioner v Ford, Fryberg J indicated that the practitioner should be ‘a careful observer carrying out the steps required by the Act and in accordance with the guidelines for the execution of a power of attorney’.¹⁷⁵ Justice Fryberg considered the practitioner

ought to have been particularly alert to the possibility that there might be some question as to [the adult’s] capacity … She was, to his knowledge, an elderly person. She was in a nursing home. She was cutting her family out of her will. She was leaving everything to the person who was facilitating the arrangements.¹⁷⁶

A solicitor may face disciplinary action for failing to ensure an adult understands and is capable of signing legal documents.¹⁷⁷

For Queensland solicitors, see Guidance Statement No. 5 – Witnessing Enduring Powers of Attorney¹⁷⁸ and those insured by Lexon Insurance should refer to their Wills and EPA Risk Procedure Pack.

Will instructions

For a will to be valid, the testator must have testamentary capacity which the solicitor must assess when taking instructions. If a client shows signs of lacking capacity, the taking of instructions requires particular care.¹⁷⁹

The test for testamentary capacity is set out in Banks v Goodfellow by Cockburn CJ:

It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties – that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made.¹⁸⁰

The time for determining mental capacity is the time of signing the will.¹⁸¹ However, in Campbell v Campbell, Mullins P stated:

Where there is a decline in the mental condition of a testator between the date instructions were given for the will and the date the will is executed, the critical date for determining testamentary capacity is the date the testator gave instructions for the will, if the testator accepts when executing the will that it reflects the instructions given by the testator.¹⁸²

The absence of testamentary capacity is a matter for the court to decide and an assessment of capacity requires consideration of all the circumstances, not just medical evidence.¹⁸³ Where there are indications of a possible lack of testamentary capacity, a medical opinion should generally be requested. As de Groot notes, the more detailed the medical opinion, the more probative value it has to the court.¹⁸⁴ The solicitor’s duty is not to gather or record only evidence which supports the making of the will, but all information which may be of assistance to the court.¹⁸⁵

The checklist provided by Kunc J in Ryan v Dalton; Estate of Ryan,¹⁸⁶ is likely to be considered the baseline of a solicitor’s standard of reasonable care in assessing capacity.¹⁸⁷ The following list combines both the starting point checklist in Ryan v Dalton; Estate of Ryan and Catanzariti’s commentary.¹⁸⁸ This list provides:

The client should be interviewed alone and preferably in person rather than remotely or through third parties. If an interpreter is required, ideally it should not be a family member or proposed beneficiary.
The issue of capacity and the possibility of undue influence should be considered in all cases, if only to dismiss it.
Ask non-leading questions. The questions and answers should be carefully recorded. Some factors to consider are:
- The client may need additional time to consider and respond.
- The practitioner should focus on one question at a time.
- The practitioner should avoid leading questions.
- The practitioner should ask the client to repeat their understanding of the question.
- The practitioner should reframe the question if the client doesn’t respond to question.
- The practitioner should require the client to answer the question, not the client’s carer, spouse, or child.
- The practitioner should not expect the client to retain large quantities of information.
- The practitioner should not give the client too many choices.
If the client is over 70 years,¹⁸⁹ being cared for by someone, is hospitalised, convalescing or bedridden, is known or suspected to be addicted to drugs or alcohol, has a history of mental ill-health, resides in a care facility or if the circumstances otherwise warrant it a solicitor should seek specialised advice from qualified health professionals as to the capacity of the client to make a will.
Where there is doubt about capacity, at the time of signing the will, the solicitor should again ask non-leading questions to confirm the client’s instructions and understanding.
It is essential that the solicitor make full, contemporaneous file notes of the attendances, events and discussions which have taken place.

In Ryan v Dalton; Estate of Ryan, the Court found that ‘a good understanding of the issues surrounding mental capacity is an essential skill for any solicitor who holds himself or herself out as competent to provide legal services to natural persons’.¹⁹⁰

A solicitor is not required to piece together incoherent instructions. Where there are doubts about the testator’s capacity, a lawyer should not draw the will. To do so would expose the solicitor to civil liability or professional discipline.’¹⁹¹ Court authorised (or statutory) wills have been introduced for persons who lack testamentary capacity. The court may, upon application, make an order for a will to be made, altered or revoked, or partially revoked.¹⁹²

Queensland practitioners insured by Lexon Insurance should refer to the Wills and EPA Risk Procedure Pack.

^{146. Dal Pont (n 8) [19.05].

147. [1999] WASCA 115, [12]–[13].

148. Murphy v Doman (2003) 58 NSWLR 51.

149. Dalle-Molle v Manos (2004) 88 SASR 193; Pratt v Dickson [2000] QSC 314.

150. Queensland Law Society, Queensland Handbook for Practitioners on Legal Capacity (Guide, 1 July 2014).

151. Gibbons v Wright (1954) 91 CLR 423, 437.

152. Ibid 438.

153. Masterman-Lister v Brutton (Nos 1 and 2) [2003] 1 WLR 1511, [31].

154. Pistorino v Connell & Ors [2012] VSC 438, [21] (Dixon J).

155. Yonge v Toynbee [1910] 1 KB 215.

156. Goddard Elliott v Fritsch [2012] VSC 87, 119 [418].

157. Ibid 166 [568].

158. Re Magavalis [1983] 1 Qd R 59, 63–4.

159. [2010] QSC 121.

160. [2012] VSC 87119–121.

161. Ibid 157 [549] (emphasis added).

162. Powers of Attorney Act 1998 (Qld) s 28.

163. Ibid ss 44(4)(b), 44(5)(c).

164. Ibid s 41(1).

165. Ibid s 42(1).

166. Attorney-General and Minister for Justice, Queensland Government, Queensland Capacity Assessment Guidelines 2020 (Guideline, 7 April 2021).

167. Powers of Attorney Act 1998 (Qld) sch 3 (definition of ‘capacity’); Guardianship and Administration Act 2000 (Qld) sch 4 (definition of ‘capacity’).

168. Lambourne & Ors v Marrable & Ors [2023] QSC 219 [62].

169. Powers of Attorney Act 1998 (Qld) s 111A.

170. Briginshaw v Briginshaw (1938) 60 CLR 336; Lambourne & Ors v Marrable & Ors [2023] QSC 219 [43].

171. Attorney-General and Minister for Justice, Queensland Government, Queensland Capacity Assessment Guidelines 2020 (Guideline, 7 April 2021) 9.

172. [2021] QSC 221, [46]–[48].

173. Powers of Attorney Act 1998 (Qld) ss 41(1)(a)–(b) address enduring powers of attorney and advance health directives.

174. Lambourne & Ors v Marrable & Ors [2023] QSC 219 [91].

175. [2008] LPT 12, 21.

176. Ibid.

177. Ibid [22]–[23].

178. Queensland Law Society, Witnessing Enduring Powers of Attorney (Guidance Statement No. 5, 17 October 2024)

179. John K de Groot, Wills Probate and Administration Practice Queensland (online at 6 November 2024) [206].

180. (1870) LR 5 QB 549, 565. See also Frizzo v Frizzo [2011] QCA 308.

181. Marquess of Winchester’s Case (1598) 6 Co Rep 23; Arthur v Bokenham (1708) 11 Mod Rep 148; Re Crooks (Estate); Ackerman v Brown (Supreme Court of New South Wales, Young J, 14 December 1994).

182. Campbell v Campbell [2023] QCA 3, [23] (emphasis added).

183. Sullivan v Greig [2023] QCA 240, [158].

184. John K de Groot, Wills Probate and Administration Practice Queensland (online at 6 November 2024) [206].

185. Ibid [206.1].

186. [2017] NSWSC 1007, [107].

187. Therese Catanzariti, ‘Dealing with Clients with Potentially Impaired Mental Capacity’, 13 Wentworth Selborne Chambers (Paper, 23 October 2017) 3.

188. Ibid.

189. 2017] NSWSC 1007, [107].

190. [2017] NSWSC 1007, [105].

191. GE Dal Pont and Ken Mackie, Law of Succession (LexisNexis Butterworths, 2013) 750.

192. Succession Act 1981 (Qld) s 21(1).}

Duty to keep information confidential

The duty of confidentiality is both a fiduciary duty to the client and an implied term in the retainer contract.¹⁹³ It is a duty not to disclose. The steps required to fulfil the duty will be influenced by factors such as its sensitivity and likelihood of disclosure.¹⁹⁴ The only exceptions are as set out in rules 9.1.1, 9.1.2 and 9.2. A law practice may also have Privacy Act obligations.¹⁹⁵

What is Confidential Information?

The discussion of what constitutes confidential information under rule 9 applies equally to rule 10. There is an important distinction between confidentiality and privilege which will be discussed later.

The Law Council of Australia 2024 Commentary noted¹⁹⁶ that:

[t]he term ‘confidential information’ is not defined in the Rules. For the purpose of the law imposing constraints upon solicitors acting against the interests of former clients, Lightman J said:

[t]he law is concerned with the protection of information which a) was originally communicated in confidence b) at the date of the later proposed retainer is still confidential and may reasonably be considered remembered or capable, on memory being triggered, of being recalled and c) relevant to the subject matter of the subsequent proposed retainer.¹⁹⁷

There is no one precise formulation for determining whether information is confidential. However, within the context of the relationship between a solicitor and their client, the concept is not to be construed narrowly.¹⁹⁸ That said, the information must be confidential (as information generally is not protected). Further, the confidential information in question must be identified with precision and not merely in global terms.¹⁹⁹

The implied contractual term regarding confidentiality embraces ‘all communications made by the client about his affairs, and all information learnt directly or indirectly about the client, in the course of the professional relationship’.²⁰⁰

In Legal Practitioners Complaints Committee v Trowell,²⁰¹ the Tribunal distinguished between ‘directly’ and ‘indirectly’. They found that the duty of confidence extends to:

information about the client that a solicitor learns in the professional relationship;
information which the solicitor would not have had but for the relationship;
information of a confidential nature acquired by the solicitor before the relationship of solicitor and client is established; and
opinions formed by the solicitor about the client’s affairs.²⁰²

In Legal Services Commissioner v Tampoe,²⁰³ the solicitor was found to have:

disclosed information provided confidentially about past criminal convictions in the client’s family;
made statements deriding the client and her family; and
disclosed some information regarding the client’s defence.

As Atkinson J observed:

This is certainly likely to bring the legal profession into disrepute with the public. In fact, a person acting as a criminal defence legal practitioner cannot under any circumstances invent facts or invent a defence. To say such a thing is scandalous and is likely to cause the public to lose confidence in not only the legal profession but in the criminal justice system, because it suggests that in response to a criminal charge what one should do is find a legal practitioner who will make up a defence for the alleged offender.²⁰⁴

In Trowell, the practitioner was found guilty of unprofessional conduct and fined after disclosing confidential information to Australian media. The Western Australian court discussed whether a lawyer’s disclosure of confidential information in relation to alleged illegal activity was justified:

In our opinion, disclosure by a lawyer of such confidential information could only be justified if made to the appropriate authority or otherwise in accordance with the exceptions to rule 6.3. It is difficult to see how it could ever justify publication to the press. The exceptions to the rule indicate how confined are the circumstances where disclosure is permitted and the appropriate authorities to whom disclosure may be made.²⁰⁵

Public domain

Even information in the public domain may be confidential to the client. A solicitor that repeats or confirms information can lend the information credibility it might not otherwise possess.²⁰⁶ Solicitors should disclose that information with the greatest caution.²⁰⁷ In Tampoe, the solicitor contended that the disclosed information was in the public domain and as result he committed no misconduct. However, it was held that the information had been communicated by the client on a confidential basis and that the solicitor had, in fact, breached his duty to the client in disclosing it on national television.

Imputed knowledge within a legal practice

Solicitors may disclose confidential information to another lawyer in the law practice, or another lawyer representing the same client.²⁰⁸ Conversely, solicitors in the same legal practice are presumed to share confidential knowledge about a client as there is a ‘strong inference that lawyers who work together share confidences’.²⁰⁹ However, in practice this presumption may not reflect the actual knowledge of solicitors in all law practices and so may be rebutted.²¹⁰

Duration

Once established, the duty of confidentiality, subject to disclosure with the client’s consent, is permanent. It continues after the termination of the retainer and even beyond the client’s death, upon which the duty is owed to the legal personal representatives of the deceased.²¹¹

Metadata, technology, and outsourcing

Solicitors should take care when transmitting documents and files to persons or entities not authorised to receive client confidential information. Steps should be taken to check any metadata in documents containing client information to ensure confidential information is not unintentionally disclosed.

Solicitors also need to manage the risks inherent in outsourcing, technology and AI. They should consider issues such as:

the inability to contract out of or delegate professional obligations to a third-party which includes the use of AI,²¹²
whether there is a need to obtain informed client consent to use outsourced services and technologies that may involve the collection, storage and transmission of client confidential information,
whether there is a need to comply with the Privacy Act 1988 (Cth).

The Law Council of Australia 2024 Commentary also added²¹³ the following additional issues to consider:

Due diligence on the ability of the outsourced provider to perform the work to the required standard of competence and to provide security of client confidential information.
Understanding the laws and regulatory issues where outsourcing and technology services are provided in jurisdictions outside of Australia, and the implications for the solicitor’s or law practice’s professional obligations and liabilities.
Potential conflicts of interest between clients and the need for effective information barriers.
Internal practice management systems.
Avoiding compromise to the duty to the court and the administration of justice.

Exceptions to duty of confidentiality

Rule 9.2 sets out the circumstances in which confidential information may be disclosed. Confidentiality may be overridden by the duty ‘to comply with the law of the land’.²¹⁴

A solicitor who discloses confidential information in such circumstances should make a comprehensive note of their reasons for doing so. The note should include:

The circumstances of the disclosure including the date, time, place, the confidential information, and the person to whom the disclosure made.
The grounds for the disclosure. For example, the details of the harm to be prevented under rule 9.2.5.

Authorised by client (rule 9.2.1)

The client may expressly or impliedly authorise disclosure.²¹⁵ Where a solicitor has joint clients, consent provided by each client is necessary to waive confidentiality.²¹⁶

The purpose of the express or implied authorisation exception in rule 9.2.1 is to enable disclosure of information:

precisely so that it can be used or disclosed for its purpose in the representation’ [and the duty of confidentiality] ‘must be read subject to the lawyer’s authority to use and disclose information - albeit for the limited purpose of the retainer – where this is necessary for, or incidental to, the proper and normal conduct of the retainer.²¹⁷

For example, a solicitor engaged to act in a property conveyance is, at least, impliedly authorised to disclose relevant client information to certain parties where it is necessary to complete the transaction. This could include the other party, their solicitors, financial institutions, and government agencies.²¹⁸

Permitted or compelled by law (rule 9.2.2)

The general duty to maintain confidentiality can be overridden by a legally authorised direction to disclose the information. A solicitor may disclose confidential information without the client’s authority in limited circumstances when permitted or compelled by law.

Examples include:

In the case of risk of harm to children, s 197A of the Child Protection Act 1999 (Qld) provides for a statutory disclosure regime which is likely to allow disclosure in a wider range of circumstances.
Section 229BC of the Criminal Code Act 1899 (Qld) imposes a mandatory reporting obligation on all adults if, without reasonable excuse, they believe that a child sexual offence is being or has been committed against a child by another adult.
Reporting obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

Privilege

Many warrants, subpoenas, or other processes that override confidentiality obligations do not displace privilege.

Privilege belongs to the client, not the lawyer. A client may assert privilege to resist the handover of documents if the documents containing confidential communication between themselves and their solicitor were made for the dominant purpose of obtaining legal advice or for actual or contemplated litigation.²¹⁹ Privilege may only be waived by the client either expressly or impliedly.

If information is privileged, a solicitor must not disclose it unless required by a statute that clearly abrogates the privilege.²²⁰ There are no specific rules on legal professional privilege in the ASCR. Privileged communications are always confidential, but not all confidential information attracts legal professional privilege.

Examples

Two examples of disclosure contemplated by rule 9.2.2 are:

A solicitor may disclose confidential information to establish or collect the solicitor’s professional fees and outlays, but this should be strictly limited to information that is required just for that purpose.
A solicitor facing a disciplinary charge or complaint from a client may disclose the client’s confidential information under Legal Profession Act s 491(1).²²¹

Section 491 does not expressly refer to information that is also subject to privilege. However, it confirms that a solicitor may use the confidential information in a defence against an allegation of impropriety and incompetence brought through a disciplinary complaint. It is also available in a civil claim alleging negligence, or a former client’s alleged incompetence in a criminal appeal. By taking these actions, the client may waive their legal professional privilege.²²²

The implied waiver would extend only to information or representations that are relevant to the allegations being made.²²³ The waiver is also limited to the purpose of the disciplinary proceedings and for the particular persons who need to see documents for that purpose.²²⁴ In Goldberg v Ng,²²⁵ the solicitor relied on the implied waiver of his client’s legal professional privilege to disclose documents to the NSW Law Society on the proviso they would not be shown to anyone else. The NSW Law Society then received a subpoena requesting the documents. The High Court decided the implied waiver of privilege was for a limited purpose (the disclosure by the solicitor to the NSW Law Society) and the documents were not to be otherwise disclosed.

Disclosure to obtain ethical or legal advice (rule 9.2.3)

A solicitor may disclose confidential information in a confidential setting for the sole purpose of obtaining advice on their legal or ethical obligations. Examples of such disclosure include:

In Legal Services Commissioner v Mullins,²²⁶ the matter involved a personal injury mediation. The solicitor sought advice from senior counsel to determine whether he should disclose his client’s life expectancy following a cancer diagnosis.
In McKaskell v Benseman,²²⁷ the solicitor showed his client’s letter to a senior practitioner for advice on an ethical matter. It was not a breach of confidentiality as it was carried out during ‘a serious and earnest search for assistance in the interests of his clients’.²²⁸ Such a disclosure cannot amount to ‘frivolous or promiscuous revelation’ of the client’s personal information.²²⁹ In the same case, there were additional disclosures at a social occasion. However, rule 9.2.3 requires ‘a confidential setting’ which may disallow disclosures at a social occasion.
In Australian Commercial Research and Development Ltd v Hampson,²³⁰ the defendant was briefed by the plaintiff who briefed 14 other Queen’s Counsels on the same matter. The defendant believed the plaintiff was attempting to corner the market by disqualifying barristers from representing their opponent in the matter. He consulted with the President of the Bar Association for advice. The disclosure of confidential information to the President was permitted, though the court confirmed that the defendant was disqualified from acting for the ANZ Bank in the matter.

Avoiding probable crimes (rule 9.2.4)

A solicitor may disclose confidential information under rule 9.2.4 for the sole purpose of avoiding the probable commission of a serious criminal offence. The exception also exists at common law.²³¹

The Law Council of Australia 2024 Commentary noted²³² that:

disclosing confidential client information is a significant professional and moral judgment for a solicitor to make. The gravity of the decision and the consequences of disclosing client confidential information with an improper motive were illustrated by the High Court’s condemnation of the conduct of the barrister turned police informant in AB and CD, EF and CD.²³³

In this case, the barrister’s actions in ‘purporting to act as counsel for the convicted persons while covertly informing against them were fundamental and appalling breaches’²³⁴ of her obligations as counsel to her clients and to the court.

Preventing physical harm (rule 9.2.5)

A solicitor must use common sense and sound judgment before disclosing confidential information to prevent serious imminent physical harm to a client or another person.²³⁵ The solicitor should consider:

the seriousness of the potential injury,
the imminence and likeliness of the harm occurring, and
the absence of other feasible ways to prevent the harm.

Information disclosed to the insurer (rule 9.2.6)

The Law Council of Australia²³⁶ noted:

Rule 9.2.6 recognises that a solicitor should not be restrained by the confidentiality duty from disclosing information in defending a claim of negligence by a client or in complying with the terms of a policy of professional indemnity insurance. Dal Pont notes this complements the common law position that client who institutes proceedings is treated as having waived the right to confidentiality (and legal professional privilege) in relation to the matters put at issue.

^{193. Parry-Jones v Law Society [1969] 1 Ch 1.

194. GE Dal Pont, Lawyers’ Professional Responsibility (Thomson Reuters, 6th ed, 2021) [10.145]

195. Privacy Act 1988 (Cth). See Privacy guidance for reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing Act | OAIC

196. Law Council of Australia 2024 Commentary (n 1) 44.

197. In Re A Firm of Solicitors [1997] Ch 1, 9–10.

198. Nash v Timbercorp Finance Pty Ltd [2019] FCA 957, [73]–[77].

199. O’Brien v Komesaroff (1982) 150 CLR 310, 327; Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307, 314; Durban Roodepoort Deep, Limited v Mark David Reilly and Glenn Robert Featherby As Administrators of the Deed of Company Arrangement of Laverton Gold NL (Subject to Deed of Company Arrangement) & Ors [2004] WASC 269, [69]–[80]; Nash v Timbercorp Finance Pty Ltd [2019] FCA 957, [66]; Le v Angius [2022] NSWSC 1150 [30]–[31], [44].

200. Re a Firm of Solicitors [1992] 1 QB 959, 970, cited in Unoil International Pty Ltd v Deloitte Touche Tohmatsu (1998) 17 WAR 97.

201. [2009] WASAT 42, [191] (‘Trowell’).

202. Ibid [366]–[372].

203. [2009] LPT 14 (‘Tampoe’)

204. Ibid 7–8.

205. Legal Practitioners Complaints Committee v Trowell [2009] WASAT 42, [384].

206. Camp v Legal Practitioners Complaints Committee [2007] WASC 309.

207. Law Council of Australia 2024 Commentary (n 1) 36.

208. See also Legal Profession (Barristers) Rules 2011 (Qld), rr 111–112 also reflecting the practicalities of sharing confidential information between a client’s legal representatives.

209. MacDonald Estate v Martin [1990] 3 SCR 1235.

210. See below for commentary on rule 10 about information barriers.

211. Gartside v Sheffield, Young and Ellis [1983] NZLR 37.

212. Valu v Minister for Immigration and Multicultural Affairs (No 2) [2025] FedCFamC2G 95; Re Dayal [2024] FedCFamC2F 1166.

213. Law Council of Australia 2024 Commentary (n 1) 35.

214. Parry Jones v Law Society [1969] 1 Ch 1, 9.

215. Marriage of Griffis (1991) 14 Fam LR 782, 786 (Mullane J); Mortgage Express Ltd v Bowerman & Partners [1999] 2 All ER 836, 844 (Millett LJ).

216. Singla v Stockler [2012] EWHC 1176.

217. Dal Pont (n 8) [10.55].

218. Law Council of Australia 2024 Commentary (n 1) (n 11) 38.

219. Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543, [9].

220. Baker v Campbell (1983) 153 CLR 52.

221. Dal Pont (n 8)) [10.90].

222. Stafford Shepherd, ‘Keeping secrets – or not: when and why client confidences may need to be shared’ (2012) 32(7) Proctor 32, 32.

223. R v Paddon [1999] 2 Qd R 387.

224. Goldberg v Ng (1995) 185 CLR 83, 96.

225. (1995) 185 CLR 83.

226. [2006] LPT 012.

227. [1989] 3 NZLR 75.

228. Ibid 88.

229. Ibid.

230. [1991] 1 Qd R 508.

231. R v Cox and Railton (1884) 14 QB 253. See also Bullivant v Attorney-General for Victoria [1901] AC 196.

232. Law Council of Australia 2024 Commentary (n 1) 40.

233. AB (a pseudonym) v CD (a pseudonym); EF (a pseudonym) v CD (a pseudonym) [2018] HCA 58.

234. Ibid [10]; Law Council of Australia 2024 Commentary (n 1) 40.

235. Queensland Law Society, ‘What should I do if I believe that my client intends to physically harm someone?’; Queensland Law Society, Can I disclose information for the purpose of preventing imminent serious physical harm to my client, Queensland Law Society, Responding to threats of imminent serious physical harm, Rules and Resources (Web Page, 2020); David Bowles, ‘When can I report a dangerous or suicidal client?’, Proctor (Web Page, 30 April 2024), <https://www.qlsproctor.com.au/2024/04/duty-of-confidence-not-absolute/>.

236. Law Council of Australia 2024 Commentary (n 1) 40}

Overview

Rule 10 deals with a conflict between a duty owed to a former client and a duty that is actually or potentially owed to a current or prospective client, known as ‘successive representation’. See rule 11 for where a solicitor is simultaneously representing two clients.

For the purposes of rule 10, a ‘former client’ extends beyond someone who has previously retained the solicitor and may include a person or entity that has previously instructed:

the solicitor;
the solicitor’s current or former law practice (while the solicitor was at that practice)
the former practice of a partner, co-director or employee of the solicitor, while the partner, co-director or employee was at the former law practice, or, who has provided confidential information to the solicitor, notwithstanding that the solicitor was not formally retained and did not render an account.²³⁷

Ongoing duty of confidentiality

A solicitor who has ceased to act for a client no longer has a fiduciary duty to that client, and may act against the interests of that client, including by acting as a solicitor for others. However, the duty of confidentiality continues after the termination of the retainer and indeed beyond the death of the former client, see rule 9.²³⁸ This means a solicitor cannot disclose any confidential information of the former client. Rule 10 concerns the conflict between that duty of confidentiality and a solicitor's duty to use all their knowledge and skill for the benefit of a second client.²³⁹

If a solicitor possesses confidential information about a former client and acts for a new client against the former client’s interest, and that confidential information is relevant to the new matter, that solicitor is in a duty-duty conflict. This means there is a real risk of misuse of the former client’s confidential information.²⁴⁰

In Groupline Constructions Pty Ltd v CDI Lawyers Pty Ltd, Muir J noted that ‘[i]t has long been recognised that a solicitor who, with the best will in the world, is determined not to make sure of a client's confidential information for the benefit of another, may subconsciously do so'.²⁴¹ In these situations, solicitors must exercise vigilance.

The Law Council of Australia 2024 Commentary²⁴² notes:

When taking new instructions from a client which may be regarded as being against a former client’s interests, a solicitor or law practice must determine whether it is in possession of any confidential information of the former client that is material and relevant to the new matter. If it is, the solicitor or law practice can only act, or continue to act, if one of the exceptions in Rule 10.2.1 or 10.2.2 applies.

Example 1

A solicitor acted for an individual in fraud proceedings. After being acquitted by the court for lack of evidence, the client admitted to the solicitor he had acted dishonestly. Subsequently, the solicitor is briefed by a lender that intends advancing money to the former client. The solicitor has a conflict of duties. They must preserve the confidentiality of the former client’s admission. On the other hand, the solicitor is also duty bound to disclose the risk the information poses to the lender’s interests. The solicitor must refuse the subsequent client’s instructions in a way that does not compromise the former client’s confidential information.

Duty of loyalty

The weight of authority in Australia supports the proposition that, once a solicitor’s retainer with a client is at an end, the solicitor does not have any continuing equitable or contractual duty of loyalty to their former client.²⁴³ In Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd,²⁴⁴ Beach J conducted a detailed analysis of the controversy over whether a solicitor's duty of loyalty survives the termination of their retainer and observed that there was no ‘secure foundation in the authorities’ for it.²⁴⁵

This reflects the English law position and observations of Lord Millett in Prince Jefri Bolkiah v KPMG (‘Prince Jefri’):

The fiduciary relationship which subsists between solicitor and client comes to an end with the termination of the retainer. Thereafter the solicitor has no obligation to defend and advance the interests of his former client. The only duty to the former client which survives the termination of the client relationship is a continuing duty to preserve the confidentiality of information imparted during its subsistence.²⁴⁶

In Victoria, Brooking JA in Spincode Pty Ltd v Look Software Pty Ltd²⁴⁷ identified that there was an equitable obligation of loyalty that survives the retainer. This is premised on a court’s inherent jurisdiction over its officers²⁴⁸ and appears to be unique to Victoria and Western Australia.²⁴⁹

Courts in other jurisdictions such as Queensland prefer an approach similar to Prince Jefri. In Maxwell-Smith v S & Hall Pty Ltd, Barret JA observed that:

after the solicitor-client retainer has come to an end, there is no continuing equitable or contractual duty of loyalty on the part of the solicitor to the former client and that the court’s jurisdiction to restrain a solicitor from acting is based not on any conflict of duty or interest but on the protection of the confidences of the former client or, as applicable, the protection of the integrity of the judicial process and the due administration of justice.²⁵⁰

Following Barret JA’s decision, one commentator wrote:

the weight of authority in Australia continues to be against the Spincode obiter and, as such, the better view is that the fiduciary loyalty does not survive the termination of a retainer. Reflecting the weight of authority, the Spincode obiter has been subject to academic criticism for stretching fiduciary loyalty ‘too far out of shape in pursuit of an objective that is not one of its core purposes’.²⁵¹

Confidential information

The Law Council of Australia 2024 Commentary notes²⁵² that:

Classes of information that may be confidential for the purposes of former client conflicts include:

information of a former client that is directly related to a matter for an existing client, for example information belonging to an insurer concerning a potential claim, in circumstances where the solicitor is asked to accept instructions to act for the claimant;
information of relevance to a competitor, such as product pricing or business models; and
in some circumstances, particularly intimate knowledge of a client, its business, personality and strategies.²⁵³

Whether information falling within the third category can be said to be truly confidential is a question of fact and likely to depend on the client. Individuals or small organisations may have a close and enduring relationship with a solicitor who will consequently obtain much confidential information concerning these more personal factors, and who would have difficulty demonstrating that he or she could act against that client. This is unlikely to be the case for a large corporation or government body, or where there is regular turnover of management with the passage of time, particularly where business practices and strategies are so well-known that they do not constitute confidential information.²⁵⁴

Solicitors should note that their opinions of former clients may also be confidential. Relevant examples of former client information being held confidential include:

Magro v Magro,²⁵⁵ in which a solicitor previously retained by the wife was prevented from representing the husband in contested property proceedings. The wife could not identify particular information that could be prejudicial, however the Court accepted that ‘impressions of the wife's personality gained after many hours of confidence could be exploited by a skilful advocate’.²⁵⁶
‘Getting to know you’ factors, from which a solicitor might know of a former client's strengths, weaknesses, honesty or lack thereof, reaction to crisis, pressure or tension, and attitude to litigation and settling cases.²⁵⁷ Even information that is not sourced from a client may be classified as confidential information.
Where there is a possibility of the action triggering memory of confidential information, that ‘unconscious memory’ is protected.²⁵⁸

The testimony of the solicitor and the former client as to what confidential information was shared is subject to the normal rules of evidence.²⁵⁹

Material and detrimental to the interests of the former client if disclosed

A solicitor, or law practice, can be restrained from acting against a former client if the risk of misusing confidential information is clearly shown, the information is materially relevant to the new matter, and its disclosure would be detrimental to the interests of the former client.

The Law Council of Australia 2024 Commentary notes²⁶⁰ that:

[the] test of materiality is an objective one, namely whether the confidential information might reasonably be expected to be material. Materiality and ‘detriment’ may arise at any time. A solicitor must continually reassess whether confidential information in the solicitor’s possession has become material to an ongoing matter and its disclosure may be of detriment to a former client.

In Fordham v Legal Practitioners Complaints Committee, a case on cross-examining a former client, Malcolm CJ asked 'whether a reasonable observer, aware of the relevant facts, would consider that the confidential information given to the solicitor by the former client was being used by the solicitor to advance the interests of the new client to the detriment of the former client'.²⁶¹

The former client must have an interest in the current matter if they are to prevent the solicitor acting on it. The former client must prove that the solicitor has confidential information, and that the information may be relevant to the new matter in which the interests of the new client may be adverse to those of the former client.²⁶²

Whether the information is disclosed is an important consideration. Rule 10 prevents the solicitor acting if the information that, if disclosed, might be detrimental to the interests of the former client. It contemplates a situation where:

information that is confidential to a former client is relevant to a current matter, and
the disclosure of that information may be detrimental to the former client.

The latter situation need not involve a matter in which the interests of the new client are adverse to those of the former client. The incidental disclosure of the confidential information in a matter not involving the former client may be detrimental enough.

The possible detriment to the former client arises from the possession of information in relation to which the solicitor owes the former client a duty of confidentiality. In Nasr v Vihervaara,²⁶³ the Full Court of the Supreme Court of Soutth Australia in setting aside an injunction found that the solicitor had obtained no relevant confidential information while acting for the former client in earlier matters which were factually unrelated to the later proceedings in which the solicitor acted for the former client's de facto partner. Doyle CJ noted that ‘theoretical possibility is not a sufficient basis’ for a finding that the solicitor possessed relevant confidential information.

Informed consent as an exception to the duty

Rule 10 recognises two alternative circumstances where the potential conflict arising from successive representation may be overcome. One exception is informed consent.

A former client must give informed consent for a solicitor to act where subsequent representation is adverse to a former client. By obtaining informed consent, a solicitor may rebut a potential breach of fiduciary obligation. The question of informed consent is a question of fact, having regard to the circumstances of each case. Advising of the importance of obtaining independent and skilled advice from a third party may be one circumstance which negates a breach of fiduciary obligation.²⁶⁴ Although the law does not strictly require that informed consent be in writing, it is recommended as it reduces the risk of misunderstandings and is a clear record for the solicitor, should the client claim that informed consent was not given.

Information barriers as an exception to the duty

Rule 10 also recognises that where there are potential conflicts arising from successive representation, they may be overcome using information barriers. This involves a law practice setting up mechanisms to attempt to quarantine some sections of the practice from others.

If a successful information barrier is established, then confidential information about a former client is effectively quarantined. This allows other sections of the practice to act in circumstances where the disclosure of confidential information may be adverse to a former client. However, the tests for a successful information barrier are rigorous. A barrier must prevent both deliberate and inadvertent disclosure of confidential information.²⁶⁵

Required strength of information barriers

The principles by which an effective information barrier can be raised in a law practice were set out by Lord Millett in Prince Jefri. Given that the risk of disclosing or using confidential information is an avoidable one, because a law practice does not have to take on the later client, Lord Millett found it difficult to justify exposing the former client to any risk of disclosure or use of the information. He noted that there is an unqualified duty to preserve confidentiality, not merely to take reasonable steps to preserve it:

No solicitor should, without the consent of his former client, accept instructions unless, viewed objectively, his doing so will not increase the risk that information which is confidential to the former client may come into the possession of a party with an adverse interest.²⁶⁶

Accordingly, an information barrier is not legally effective unless the different sections are almost permanently, physically, and operationally segregated.²⁶⁷ Relevant undertakings by people who possess the information are essential, but insufficient by themselves.

Whether an information barrier is sufficient may also depend on the practice area.

Civil matters: For the solicitor to rely on an information barrier and act for the later client in civil matters, there must be no real or sensible possibility of the practice misusing the confidential information.²⁶⁸ In Prince Jefri Lord Millett concluded that although 'the risk must be a real one, and not merely fanciful or theoretical', it need not be substantial.²⁶⁹
Family law matters: In family law matters, the court requires the applicant to demonstrate a real as opposed to theoretical possibility that confidential information is at risk.²⁷⁰ In Osferatu, the court indicates a willingness to accept an information barrier as a solution to the problem posed by a migratory solicitor.
Criminal matters: The similar higher standard, protecting against even theoretical risks, is expected in criminal proceedings. In Mallesons Stephen Jaques v KPMG Peat Marwick, lpp J emphasised the importance 'not only that justice is done, but also that it is apparent that it is done'.²⁷¹

Guidelines for information barriers

The QLS Information Barrier Guidelines²⁷² specify a number of measures that should be put in place if a law practice is to act against a former client without being in breach of rule 10. These Guidelines were prepared by the Law Society of NSW in consultation with the Law Institute of Victoria and have been adopted in Queensland, the ACT, NSW and Victoria, and should be strictly followed. They include:

the appointment of a compliance officer,
obtaining the consent of the current client that confidential information held for the former client is not disclosed,
identifying any people in the practice who possess information about which a duty of confidentiality is owed to the former client,
undertakings by those people not to disclose information to others in the practice,
the physical segregation of people who acted for the former client and documents held in relation to that client,
a continuing education program in the practice in relation to these duties, and
careful segregation of IT resources available to the 'screened' team.

Undertakings in information barriers

The Guidelines require the giving of undertakings by anyone in the practice who has acted for the former client. The undertakings confirm that:

they understand they may possess (or come to possess) confidential information,
they understand they must not discuss that information or the matter generally with any other person within the law practice,
they have not previously had such discussions or done anything which would amount to a breach of the information barrier,
they will inform the designated compliance officer immediately upon becoming aware of any possible breach of the information barrier, and
if they are required to produce documents, for example, in order to comply with a subpoena or a notice to produce, they will forward the relevant material (including the former client's physical or electronic files) to the compliance officer.

These undertakings are a necessary element of an acceptable information barrier.²⁷³ However, they are not sufficient on their own, because no matter how strong the integrity and standing of those making the undertakings are, inadvertent disclosures may still occur.

In Mallesons Stephen Jacques v KPMG Peat Marwick,²⁷⁴ the Court accepted that the solicitors giving the undertakings were of the highest integrity and standing. However, lpp J held that the duty of a fiduciary to avoid a conflict of duties to different clients was absolute and inflexible, and could not be cured by an undertaking.

In Fruehauf Finance Corp Pty Ltd v Feez Ruthning (a firm),²⁷⁵ Lee J accepted that an information barrier allowed a law practice to act against a former client because, amongst other things, the solicitors involved gave undertakings not to share the former client’s information and had not in fact disclosed any such information.

A breach of an undertaking may be grounds for an order that the solicitor not represent a new client. In Asia Pacific Telecommunications Limited v Optus Networks Pty Ltd,²⁷⁶ the law practice had previously taken instructions from a company related to the applicant against the respondent. The practice sought to represent the respondent in a new matter and established an information barrier that included sworn undertakings from solicitors who had acted for the former client that they would 'not undertake in any capacity any work or other activity' concerning the new matter. However, a partner who had given the undertaking signed a consent order for the litigation between the applicant and the respondent, because there was a shortage of people in the office who had signing authority.

This was regarded as a breach of his undertaking, although it was at 'the lower end of the spectrum of involvement' in the proceedings, was inadvertent, and there was no disclosure of confidential information.²⁷⁷ However, the breach led Bergin J to conclude that the information barrier was not as strong as had been thought and that the risk of disclosure was now real and not fanciful.²⁷⁸ As a result, the firm was restrained from acting for the respondent.

For Queensland practitioners, see Guidance Statement No. 1 – Undertakings.²⁷⁹

The inherent jurisdiction to restrain a solicitor from acting for a client

The court has an inherent jurisdiction to supervise the conduct of solicitors as officers of the court. A court may use its inherent jurisdiction to decide that it is in the interests of justice to restrain a solicitor from acting for a particular client.

The circumstances in which a court should exercise this jurisdiction were well-described by Brereton J in Kallinicos v Hunt.²⁸⁰ In this decision, Brereton J found that:

The relevant test is whether a ‘fair-minded, reasonably informed member of the public’ would conclude that the proper administration of justice requires that a solicitor should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice.
The jurisdiction of the court is to be regarded as exceptional and to be exercised with caution, with weight given to the public interest in a litigant not being deprived of their solicitor of choice without due cause.
The timing of the application is relevant in that the cost, inconvenience or impracticality of requiring solicitors to cease to act may provide a reason to refusing to grant relief.²⁸¹

Examples of where the court has exercised the inherent jurisdiction include:

where a solicitor has a personal (whether financial, personal or reputational) stake in the outcome of the proceedings or in their conduct, beyond the recovery of proper fees,²⁸²
a perception that the solicitor is changing sides,²⁸³ and
where a solicitor's professional conduct comes under scrutiny.²⁸⁴

The onus of providing that confidential information could be misused rests with the plaintiff who is seeking to restrain a former solicitor from acting. This was established in Prince Jefri which provided that

it is incumbent on a plaintiff who seeks to restrain his former solicitor from acting in a matter for another client to establish (i) that the solicitor is in possession of information which is confidential to him and to the disclosure of which he has not consented and (ii) that the information is or may be relevant to the new matter in which the interest of the other client is or may be adverse to his own.²⁸⁵

This issue was also discussed in Osferatu v Osferatu.²⁸⁶ The Court held that a party seeking to restrain a solicitor carries the burden of proof and must clearly outline the information at risk and how misuse of that information would cause detriment.²⁸⁷

If a former client has proved a solicitor possesses confidential information, the next step is to assess the likelihood that the relevant information may be disclosed. In Osferatu v Osferatu the Court concluded that ‘[t]he consideration should be whether there is a real risk of misuse as opposed to one which is merely fanciful’.²⁸⁸

The risk of disclosure is to be determined by considering the risk of any protective measures taken or proposed by the solicitor or his or her new firm. The evidentiary burden regarding those protective measures falls squarely on the firm responsible for implementing them.²⁸⁹

When deciding whether to use their inherent jurisdiction to restrain a solicitor, a court must balance:

the nature of the information against a consideration of the person to whom the information was given,
when the information was given,
the relevance of that information to the current proceedings,
the risk of disclosure, and
any proposed protective measures.²⁹⁰

^{237. See definition of ‘former client’ in Glossary.

238. See also Groupline Constructions Pty Ltd v CDI Lawyers Pty Ltd [2024] QSC 209, [43].

239. This conflict was recognised in Spector v Ageda [1973] Ch 30.

240. See, eg, Nash v Timbercorp Finance Pty Ltd [2019] FCA 957, [62]–[64]; Dyer v Chrysanthou (No 2) (Injunction) [2021] FCA 641, [74]–[78]; Le v Angius [2022] NSWSC 1150, [29]–[31]; Porter v Dyer (2022) 402 ALR 659, [74]–[75].

241. [2024] QSC 209, [50].

242. Law Council of Australia 2024 Commentary (n 1) 42-43.

243. Ismail-Zai v Western Australia (2007) 34 WAR 379, [20]–[25] (Steytler P); Cleveland Investments Global Ltd v Evans [2010] NSWSC 567, [38]–[50] (Ward J); Maxwell-Smith v S & Hall Pty Ltd (2014) 86 NSWLR 481, [24] (Barrett JA); Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd [2014] FCA 1065, [40]–[89] (Beach J); Técnicas Reunidas SA v Andrew [2018] NSWCA 192, [36] (Leeming JA); Nash v Timbercorp Finance Pty Ltd [2019] FCA 957, [122] (Anderson J).

244. [2014] FCA 1065.

245. Ibid [42].

246. Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222, 235 (‘Prince Jefri’).

247. [2001] VSCA 248.

248. See rule 3 above for further discussion about the inherent jurisdiction of the court.

249. Walthamstow Pty Ltd v Caratti [No 2] [2023] WASC 363.

250. (2014) 86 NSWLR 481, [24] (Beazley P and McColl JA agreeing); Kallinicos & anor v Hunt & ors [2005] NSWSC 1181.

251. Ian Dallen, ‘The Rise of the Information Barrier: Managing Potential Legal Conflicts Within Commercial Law Firms’ (2014) 88 ALJ 428, 434.

252. Law Council of Australia 2024 Commentary (n 1) 44.

253. See, eg, Yunghanns v ELFIC Ltd (Supreme Court of Victoria, Gillard J, 3 July 1998), [10]–[11].

254. Law Council of Australia 2024 Commentary (n 1) 45. See, eg, Mintel International Group Ltd v Mintel (Australia) Pty Ltd (2000) 181 ALR 78, [44] (in the context of barristers).

255. (1989) FLC 92-005.

256. Ibid [38].

257. See D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118, 123; Yunghanns v ELFIC Ltd (Supreme Court of Victoria, Gillard J, 3 July 1998), [10]–[11].

258. Sent v John Fairfax Publications Pty Ltd [2002] VSC 429.

259. Mills v Day Dawn Block Gold Mining Co Ltd (1882) 1 QLJ 62.

260. Law Council of Australia 2024 Commentary (n 1) 46.

261. (1997) 18 WAR 467, 488.

262. Prince Jefri (n 256).

263. (2005) 91 SASR 222.

264. Maguire v Makaronis (1997) 188 CLR 449, 466-96.

265. Asia Pacific Telecommunications Limited v Optus Networks Pty Ltd [2007] NSWSC 350.

266. Prince Jefri (n 256) 227.

267. For example, Groupline Constructions Pty Ltd v CDI Lawyers Pty Ltd [2024] QSC 209, [74].

268. Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357.

269. Prince Jefri (n 256) 236–237

270. Osferatu v Osferatu [2015] FamCAFC 177.

271. (1990) 4 WAR 357, 374. See also R v Pham [2017] QCA 43.

272. Queensland Law Society, ‘Information Barrier Guidelines’, Rules and Resources (Web Page, 2023) <https://www.qls.com.au/practising-law-in-qld/ethics/australian-solicitors-conduct-rules/rules-resources/information-barrier-guidelines>.

273. Prince Jefri (n 256) 530.

274. (1990) 4 WAR 357.

275. [1991] Qd R 558.

276. [2007] NSWSC 350.

277. Ibid [27].

278. Ibid [41].

279. Queensland Law Society, Undertakings (Guidance Statement No. 1, 28 March 2023).

280. (2005) 64 NSWLR 561.

281. Ibid [76]. See also Potts v Jones Mitchell & Anor [2004] 2 Qd R 298.

282. Mitchell v Burrell [2008] NSWSC 772. See also R & P Gangemi Pty Ltd v D & G Luppino Pty Ltd & Anor [2012] VSC 168.

283. Cleveland Investments Global Ltd v Evans [201] NSWSC 567.

284. Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491.

285. Prince Jefri (n 256) [235].

286. Osferatu v Osferatu [2015] FamCAFC 177.

287. Ibid [26]–[28].

288. Ibid [39].

289. Ibid [33].

290. Ibid [35].}

Overview

Rule 11 deals with concurrent client conflicts, also known as ‘duty-duty’ conflicts. The rule only allows a solicitor to act for two clients in the same or related matter where they have the fully informed consent of all clients. Rule 11 is also relevant where a solicitor is acting for two clients in unrelated matters where there is confidential information from one client that becomes relevant to the other. In such cases, they are required to only proceed when consent from all clients is provided to disclose and use that information for the benefit of the other, or if an effective information barrier can be established.

Duty to avoid conflicts between current clients

Rule 11.1 recognises that conflicts may occur and should be managed. Solicitors should employ practice management skills to manage actual or perceived conflicts of interest before they arise. Examples of managing real or potential risk include identifying areas of risk, educating staff about conflicts, and developing policies to avoid and respond to conflict situations.

In most cases, the conflicting duties will be the duty to maintain the confidences held for one client against the duty to use all the solicitor's knowledge and skill for the benefit of a second client.²⁹¹ The risk of conflict is heightened where the solicitor acts for separate clients in the one matter. These are described as 'same matter conflicts' and have been described as going to 'the very heartland of fiduciary law'.²⁹² In Hilton v Barker Booth and Eastwood (a firm),²⁹³ the solicitors did more than allow the possibility of conflict in acting for both vendor and purchaser in a conveyance. The solicitors knew that the purchaser had been a bankrupt, was convicted of fraudulent trading and did not disclose this to the vendor. After the transaction collapsed, the vendor successfully sued the solicitors for breach of their contractual duty.

As with rule 10, rule 11 reflects the common law obligation to avoid conflicts and may apply in scenarios more nuanced than Hilton v Barker Booth and Eastwood. A breach of the obligation to avoid conflicting duties between two existing clients can result in a claim for civil compensation or an injunction. The solicitor may also be subject to disciplinary proceedings.²⁹⁴ In some circumstances, acting for two or more parties in a transaction will result in a deterrent excess being applied by the professional indemnity insurer should a claim arise from that transaction.

The court also has an inherent jurisdiction to supervise solicitors as officers of the court and can restrain a practitioner from acting.²⁹⁵

Duty to withdraw from one or both clients

Rule 11.2 states that the solicitor 'must not act' unless the exception at rule 11.3 applies. This means that the solicitor should not act for either client, except as permitted by the rules. At common law, where a significant possibility of a conflict between the duties owed to both clients arises, the proper course for the solicitor to take is to withdraw from acting for both. It is not acceptable to withdraw from acting for only one of the clients, as in doing so the solicitor is likely to be acting in breach of duties that were owed to the other.²⁹⁶

Informed consent

Rule 11.3 acknowledges that solicitors may act for two or more existing clients in the same or related matter so long as both of the clients have given informed consent. The rule mirrors the common law, as expressed in Farrington v Rowe McBride & Partners:

A solicitor's loyalty to his client must be undivided. He cannot properly discharge his duties to one whose interests are in opposition to those of another client. If there is a conflict in his responsibilities to one or both he must ensure that he fully discloses the material facts to both clients and obtains their informed consent to his so acting ... And there will be some circumstances in which it is impossible, notwithstanding such disclosure for any solicitor to act fairly and adequately for both.²⁹⁷

Accordingly, there will be cases in which acting for more than one client in the same or related matter will create irreconcilable duties between clients and it will be improper to act, regardless of whether consent has been obtained. Though the clients may be willing to permit multiple representation, it is the solicitor’s ‘integrity and common sense’ that will answer whether or not to proceed.²⁹⁸

The existence of informed consent negates what would otherwise be a breach of fiduciary obligations.²⁹⁹ The High Court has observed that:

if the appellants were to escape the stigma of an adverse finding of breach of fiduciary duty, with consequent remedies, it was for them to show, by way of defence, informed consent by the respondents to the appellants' acting, in relation to the Mortgage, with a divided loyalty. What is required for a fully informed consent is a question of fact in all the circumstances of each case and there is no precise formula which will determine in all cases if fully informed consent has been given. The circumstances of the case may include (as they would have here) the importance of obtaining independent and skilled advice from a third party. On no footing could it be maintained that the appellants had taken the necessary steps of this nature to answer the charge of breach of fiduciary duty. However, it should be noted that, contrary to what appeared to be suggested by the respondents in argument, there was no duty as such on the appellants to obtain an informed consent from the respondents. Rather, the existence of an informed consent would have gone to negate what otherwise was a breach of duty.³⁰⁰

What is informed consent?

Informed consent requires transparency, full disclosure of all material issues and frankness to all the parties in any proposed multiple representation. What fully informed consent constitutes is a question of fact in all the circumstances of each case. There is no precise formula.³⁰¹

In ‘same matter conflicts’, the following test was set by Clark Boyce v Mouat:

[C]onsent given in the knowledge that there is a conflict between the parties and that as a result the solicitor may be disabled from disclosing to each party the full knowledge which he possesses as to the transaction or may be disabled from giving advice to one party which conflicts with the interests of the other. If the parties are content to proceed upon this basis the solicitor may properly act.³⁰²

It is recommended that solicitors do the following when obtaining informed consent:

explain (in writing) in language the clients will understand, and with consideration of their experience of legal matters:
- the actual or potential conflict in the duties owed,
- the risks and consequences of the multiple representation,
- the advantages and disadvantages of the multiple representation.
- how issues of confidentiality will be dealt with,
- available alternatives to the multiple representation, and
where the circumstances of the case require it, recommend that the clients obtain independent and skilled advice from a third party.³⁰³

Preliminary consent to disclosing information that is confidential may be needed. There is no implied right to disclose information because it is required to secure consent. Neither would it be an answer to failing to make full disclosure that you were unable to obtain the necessary consent to do so. If there is information that should be disclosed that cannot be, informed consent will be impossible to achieve.

Consent in writing

Although rule 11.3 does not stipulate that the informed consent be obtained in writing, it is strongly recommended that solicitors obtain the consent of both parties in writing where possible and appropriate. If not obtained in writing the solicitor ought to make a file note of it. The consent should also be documented with the explanations, information, and disclosures made.

In Legal Services Commissioner v Taylor,³⁰⁴ the solicitor acted for both vendor and purchaser in a conveyance. In disciplinary proceedings, the solicitor admitted that it should have been apparent to himself and his conveyancing clerks that the clients' interests were in conflict, and that he failed to properly supervise his clerks to ensure that he ceased to act for both parties immediately upon the conflict arising. Although he had later told his clients of the conflict, he failed to provide them with that information in writing and failed to obtain written acknowledgement from the parties that he was acting on behalf of both. The solicitor was found to have committed unsatisfactory professional conduct.

Multiple representations by type of matter

Cases and other guidelines provide some assistance in managing risks of conflict in conveyancing, contentious, and criminal matters.

Conveyancing

Solicitors should avoid acting for both parties in conveyancing transactions unless the informed consent of each party to the transaction is obtained before retainers are accepted. It is noted that in Queensland, unlike some other jurisdictions, this is not a common practice. Relevant cases include:

In Clark Boyce v Mouat,³⁰⁵ a solicitor acted for both a mother as mortgagor and a son as guarantor. The solicitor advised the mother to obtain independent legal advice because if her son failed to meet the mortgage payments, she would lose her own property. The solicitor was held to have made adequate disclosure and have secured fully informed consent to the transaction.
In Re Yarwood³⁰⁶ and in Re Evans³⁰⁷ the Tribunal ultimately dismissed disciplinary charges against two solicitors but observed that it is undesirable for solicitors to act on behalf of both the vendor and the purchaser in the one transaction. Although technically permissible to act for both, informed written consent should be obtained from both parties.

The deterrent excess in the Lexon Master Policy applies in circumstances where a claim arises from a transaction in which a practitioner acted for:

both vendor and purchaser,
both lender and borrower, or
both lessor and lessee.³⁰⁸

Contentious litigation

In litigation, the duty to avoid conflicting duties to two or more clients is more onerous. Parties to litigation who have potentially adverse interests must be separately represented. A solicitor may act for two or more parties in litigation only if the parties are on the same side in the proceedings and their interests coincide. If either of these conditions are not met, the leave of the court must be obtained to represent more than one of the parties. This is an express requirement under Commonwealth rules for family matters.³⁰⁹

Criminal matters

The representation of multiple criminal defendants produces an inherent conflict of duties, as each co-accused may attempt to incriminate another. In addition, a solicitor may be obliged to inform a client of the benefits of informing on a co-defendant and the benefits of entering an early plea of guilty. When an actual or foreseeable conflict of interest arises, it cannot be cured by information barriers or by briefing of separate counsel to represent each co-accused client.

The leading decision of R v Pham [2017] QCA 43 states:

[58] It has been a longstanding, reasonably common practice for a solicitor’s firm or a legal practitioner to act for one or more co-defendants in criminal matters. As the appellant submits and the ASCR recognise, it is a practice fraught with danger.

[59] Even if there is no immediately apparent conflict of duties concerning the co-defendants, conflicts can easily arise during trials, which are notoriously unpredictable.

[60] The practice is apt to undermine public confidence in the legal profession and should be discouraged. Unless there is no possibility of a conflict existing or emerging, and such cases will be rare, co-defendants should have separate legal representation. These observations apply equally to solicitors and barristers. If legal practitioners persist in acting for co-defendants, they must be assiduous in meeting their arising ethical responsibilities.

The Law Institute of Victoria provides guidelines for representing co-accused clients and recommends that the solicitor should:

advise the clients as soon as is reasonably practicable in relation to the risks and consequences that may flow if a conflict subsequently arises in the course of the proceedings,
record the fact of such advice in writing, and
provide the co-accused clients with a copy of the notice 'Information for persons jointly charged' which states:

You may all be represented in court by the one solicitor or firm of solicitors only if there is no current or likely future conflict of interest between you and any other person who has been charged with you …

If there is, or is likely to be, any disagreement between you and any other person charged with you about your role in the crime, then you should be represented in court from the start of your case by a different solicitor or firm of solicitors to any other person charged with you.³¹⁰

Queensland Solicitors are referred to: Guidance Statement No. 12 – Conflicts of Interest in Criminal and Crime and Corruption Commission Proceedings.

Confidentiality to be protected by information barriers

Rule 11.4 allows a legal practice to represent clients in conditions that would otherwise amount to a conflict where the informed consent of both clients is obtained, or an effective information barrier is in place.

The Law Council of Australia 2024 Commentary notes³¹¹ that:

In the Rule 11.4.1 situation, the one solicitor (or same set of solicitors) is able to act for each client in the same or related matters as the form of each clients’ consent removes the potential for confidential information conflicts as between those clients.

Importantly, it is only in the Rule 11.4.1 situation (i.e. where the consent permits the sharing and use of confidential information by the solicitor as between the concurrent clients) that the one solicitor (or the same set of solicitors) can act for each client in the same or related matters.

In the Rule 11.4.2 situation, an effective information barrier must be established to protect each clients’ confidential information and, as such, the one solicitor (or the same set of solicitors) cannot act for each client in the same or related matters. Rather, for an effective information barrier to be established in relation to the same or related matters, different solicitors within a law practice must act for each client in accordance with strict information barrier (separation) protocols to ensure that the solicitors on each side of the information barrier act separately and independently from each other.

The commentary for Rule 10, above, discusses information barriers in more detail.

Conflict arising during course of matter

In summary, rule 11.5 provides that if a legal practice is representing two or more clients in a matter and a new conflict arises between duties owed to them, then the practice may only continue to act (at all) if no duty of confidentiality is put at risk.

As always, all parties must give their informed consent. But even with that consent, the legal practice must be satisfied that confidential information will not be disclosed. The rule should only be relied on in the rarest circumstances. Solicitors finding themselves in positions of actual conflict should withdraw from acting for both clients.³¹²

The relevant test was set out in Australian Liquor Marketers Pty Ltd v Tasman Liquor Traders Pty Ltd:

[I]n my opinion, in every case involving an application to restrain a solicitor from acting, it is a question of balancing the competing considerations – one party’s right to be represented by solicitors of its choosing against another party’s right not to have its (former) solicitors acting against it in the same or substantially the same proceeding.³¹³

Queensland Solicitors are referred to: Guidance Statement No-17- Conflicts of interest in work health safety investigations.

^{291. Spector v Ageda [1973] Ch 30.

292. Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1, 47–8.

293. Ibid.

294. See, eg, Re X (Queensland Statutory Committee, 3 June 1997) 388.

295. See above for rule 10 discussion about the inherent jurisdiction of the court.

296. Maguire v Makaronis (1997) 188 CLR 449, 465.

297. [1985] 1 NZLR 83, 90 (Richardson J).

298. Lie Hendri Rusli v Wong Tan and Molly Lim (a firm) [2004] 4 SLR (R) 594, [47].

299. Maguire v Makaronis (1997) 188 CLR 449, 467.

300. Ibid [43].

301. Ibid 466.

302. [1994] 1 AC 428, 435 (Lord Jauncey).

303. Maguire v Makaronis (1997) 188 CLR 449 466–7; Commonwealth Bank of Australia v Smith (1991) 42 FLR 390.

304. [2011] LPC 003.

305. [1994] 1 AC 428.

306. [2003] SCT 91.

307. [2003] SCT 93.

308. Unless the firm is acting as the unpaid agent of another law practice for the purposes of effecting settlement. See the most recent Lexon Master Policy for current wording.

309. Federal Circuit and Family Court of Australia (Family Law) Rules 2021

310. Law Institute of Victoria, Guidelines for the Representation of Co-defendants in Criminal Proceedings (Guideline, 12 October 2022) 2.

311. Law Council of Australia 2024 Commentary (n 1) 53–54.

312. See above for rule 11.2 commentary.

313. [2002] VSC 324, [25] (Habersberger J).}

Overview

The Law Council of Australia 2024 Commentary provides the following guidance³¹⁴ on rule 11A:

The context for the Rule is the provision of a limited range of legal services (as opposed to full and ongoing representation) by a solicitor as a legal assistance service, in circumstances where it is not reasonably practicable to screen for conflicts of interest between the client being legally assisted and other current or former clients of the legal assistance provider organisation as the time required to do so may result in a real risk of the client being denied access to legal assistance.

Rule 11A is not directed towards the application of the conflict of interest principles set out in Rules 9 and 10 in the provision of ‘unbundled’ or ‘limited-scope’ legal services generally. ‘Unbundling’ separates the package of legal services that may be required to handle a dispute [or matter] into components, and the client and lawyer agree to what parts of the package the lawyer will provide.³¹⁵ In other words, a limited range of legal services is being provided under an agreement negotiated beforehand between the solicitor or law firm and the client.

Also, Rule 11A does not displace the duty to avoid conflicts of interest between clients (including between current clients, and between a current and a former client) in legal assistance matters. Rather, Rule 11A provides guidance about satisfying the duty to avoid conflicts of interest between clients when providing a limited scope legal service in the exceptional situations encountered in the legal assistance sector.

The scope of the Rule is centred on the definition of short-term legal assistance services, which is a service offered by a solicitor to a client, whether through a legal assistance service provider or on a pro bono basis, with the expectation by the solicitor and the client that the solicitor will not provide continuing legal advice or representation in the matter.

The term legal assistance service provider is an umbrella term used in the National Legal Assistance Partnership Agreement (Agreement) to refer to individual Legal Aid Commissions, Community Legal Centres and Aboriginal and Torres Strait Islander Legal Services. The Agreement also recognises health justice partnerships and Family Violence Prevention and Legal Services.

In addition to organisations providing government-funded legal assistance under the Agreement, there are many individual legal practitioners, private law firms, professional associations and other organisations and coalitions that provide pro bono legal assistance to individuals and organisations in urgent need of pro bono legal assistance.

The Rule has three elements:

A reasonable belief (that)
Circumstances exist where it is not reasonably practicable to screen for conflicts (because)
The time required to do so may result in a real risk of being denied access to legal assistance.

Consultations leading to the development of Rule 11A identified the exceptional circumstances in which legal assistance services are provided as including:

the legal assistance services in focus are high-volume and limited in scope to the particular and immediate issue at hand (whereas the underlying premise of Rules 10 and 11 involves both an ongoing relationship and a full range of legal services).
a significant volume of discrete legal assistance services are provided by legal aid commissions where there has been no prior arrangement to deliver the service, including services to self-representing parties at court on the day that the party has a court appearance.
the risks to safety involved in obtaining the informed consent of both parties (for example, from a former partner who may have also been legally assisted) where family violence is involved.
legal assistance services clients are often vulnerable and disadvantaged members of the community who lack sophisticated understanding or comprehension of the legal system.
the time-sensitivity of the need for legal assistance, which extends to situations beyond the duty-lawyer situation.
lack of access to technology and advance notice of potential clients in some settings, including for example mental health facilities or prison outreach clinics where use of computers and telephones is prohibited

Application

Legal assistance service provider

As mentioned above, the term legal assistance service provider is:

an umbrella term used in the National Legal Assistance Partnership Agreement to refer to Legal Aid Commissions, Community Legal Centres, and Aboriginal and Torres Strait Islander Legal Services. The Agreement also recognises health justice partnerships and Family Violence Prevention and Legal Services; and
for the purposes of the rule, includes individual legal practitioners, private law firms, professional associations and other organisations and coalitions that also provide short-term pro bono legal assistance.

The definition of ‘short term legal assistance’ services makes clear that legal assistance provided from both of the above sources is intended to be within the scope of rule.

No continuing legal advice or representation in the matter

The second limb of the definition of short term legal assistance services is that both the client and the solicitor have the expectation that the service to be provided is not part of or will not lead to continuing legal advice or representation in the matter. This specifically means that there is a mutual expectation that the solicitor will not provide continuing legal services in the matter, nor take carriage of the matter in an ongoing, representative capacity.

As a result, the definition of ‘short term legal assistance services’ excludes limited-scope or unbundled legal services not provided as a legal assistance service. It also excludes situations where there has been a grant of legal aid to enable a legal assistance service provided to provide full representation to a legal aid client.

The Law Council of Australia 2024 Commentary continues:³¹⁶

Rule 11A.1 is the substantive provision of Rule 11A, with two elements:

i. if solicitor has formed a reasonable belief that because of circumstances it is not reasonably practicable to screen for conflicts of interest as the time required to do so may result in a real risk of the client being denied access to legal assistance;
the solicitor may provide the legal assistance service, provided that:
ii. the solicitor has disclosed the nature of the services to the client, there is no actual or potential conflict of interest, and the client has given informed consent to the provision of the service.

The circumstances in which it would not be reasonably practicable to screen for conflicts of interest will vary according to the setting in which the legal assistance service is to be provided. One example is the combination of lack of access to communications technology and advance notice of potential clients in prison outreach clinics.

Rule 11A.1 requires that the solicitor form a reasonable belief. A prudent solicitor should ensure that a record is kept as the existence of the circumstances and factors that lead to the reasonable belief that there would be a real risk of the client being denied access to legal assistance.

Rule 11A.2 reflects the general principles in Rules 10 and 11 that a solicitor or law practice should not act for two or more clients in a matter where there is a conflict or potential conflict between the interests of those clients. A conflict may arise because the interests of two current clients are adverse (Rule 11). A conflict may also arise because there is confidential information of a current client (Rule 11) or of a former client (Rule 10) that is material to the matter of the client currently to receive the legal service, which would be detrimental to the interests of the other current client or former client if disclosed.

In the context of Rule 11A the effect of Rule 11A.2 is that where it is not reasonably practicable to undertake a conflict of interest of check prior to providing a legal assistance service, the solicitor must not act, or continue to act for his or her legal assistance client if the solicitor has, or becomes aware of a conflict of interest between his or her legal assistance client and another client or former client of the solicitor or the solicitor’s legal assistance service provider

Rule 11A.3 embodies the principle in Rules 11.3 and 11.4 that where there is an adverse interest conflict between current clients, a law practice may continue to act for both the clients provided each client has given informed consent and (if necessary) measures are in place to protect confidential information from disclosure.

In the context of the provision of short term legal assistance services, where it is quite possible that the two parties to a dispute may each seek short-term legal assistance, it is prudent practice to inform a client of this possibility before providing the legal assistance service, that the short-term legal assistance service will be provided without disclosure of confidential information to any other person, and that the client consents to the provision of the legal assistance service on this basis.³¹⁷

^{314. Law Council of Australia 2024 Commentary (n 1) 66–67

315. Ibid

316. Law Council of Australia 2024 Commentary (n 1) 68–69. Ibid.

317. Ibid}

12.1 A solicitor must not act for a client where there is a conflict between the duty to serve the best interests of a client and the interests of the solicitor or an associate of the solicitor, except as permitted by this Rule.
12.2 A solicitor mut not do anything:

calculated to dispose of a client or a third party to confer on the solicitor, either directly or indirectly, any benefit in excess of the solicitor's fair and reasonable remuneration for legal services provided to the client, or
that the solicitor knows, or ought reasonable to anticipate, is likely to induce the client or third party to confer such a benefit and is not reasonably incidental to the performance of the retainer.

12.3 A solicitor must not borrow any money, nor assist an associate to borrow money, from:

12.3.1 a client of the solicitor or of the solicitor's law practice; or
12.3.2 a former client of the solicitor or of the solicitor's law practice who has indicated a continuing reliance upon the advice of the solicitor or of the solicitor's law practice in relation to the investment of money,

UNLESS the client is:

an Authorised Deposit-taking Institution;
a trustee company;
the responsible entity of a managed investment scheme registered under Chapter 5C of the Corporations Act 2001 (Cth) or a custodian for such a scheme;
an associate of the solicitor and the solicitor is able to discharge the onus of proving that a full written disclosure was made to the client and that the client's interests are protected in the circumstances, whether by legal representation or otherwise; or
the employer of the solicitor.

12.4 A solicitor will not have breached this Rule merely by:

12.4.1 drawing a Will appointing the solicitor or an associate of the solicitor as executor, provided the solicitor informs the client in writing before the will is signed:

of any entitlement of the solicitor, or the solicitor's law practice or associate, to claim executor's commission;
of the inclusion in the Will of any provision entitling the solicitor, or the solicitor's law practice or associate, to charge legal costs in relation to the administration of the estate; and
if the solicitor or the solicitor's law practice or associate has an entitlement to claim commission, that the client could appoint as executor a person who might make no claim for executor's commission.

12.4.2 drawing a Will or other instrument under which the solicitor (or the solicitor's law practice or associate) will or may receive a substantial benefit other than any proper entitlement to executor's commission and proper fees, provided the person instructing the solicitor is either:

a member of the solicitor's immediate family;
a member of the immediate family of the solicitor's spouse;
a solicitor, or a member of the immediate family of a solicitor, who is a partner, employer, or employee, of the solicitor.

12.4.3 receiving a financial benefit from a third party in relation to any dealing where the solicitor represents a client, or from another service provider to whom a client has been referred by the solicitor, provided that the solicitor advises the client:

that a commission or benefit is or may be payable to the solicitor in respect of the dealing or referral and the nature of that commission or benefit;
that the client may refuse any referral, and the client has given informed consent to the commission or benefit received or which may be received.

12.4.4 acting for a client in any dealing in which a financial benefit may be payable to a third party for referring the client, provided that the solicitor has first disclosed the payment or financial benefit to the client.

Conflict with solicitor's own interests

Rule 12.1 captures the fundamental principle underlying every fiduciary relationship between a solicitor and a client, which is that a solicitor must never secure a benefit at the client’s expense during work defined by the retainer. The only exception is the receipt of fair and reasonable professional fees to which the solicitor is legitimately entitled.³¹⁸

Solicitors must be vigilant in their dealings to avoid actual and potential conflicts between their own interests and their duty of 'undivided loyalty' to their client. In O’Reilly v Law Society of NSW, Clarke JA expressed that 'whenever a solicitor, either personally or through his company, seeks to deal with his own client, then the potential for conflict is so great that it will only be in rare cases that such a dealing could be acceptable.’³¹⁹

Rule 12.1 supports rule 4.1.1 in reflecting the solicitor's fundamental duty to act in the best interests of a client in any matter in which the solicitor represents the client. A solicitor cannot misuse their influence over a client, actively or passively.³²⁰ A solicitor must promote the best interests of the client, even where that will be to a personal disadvantage. If there is a conflict with the solicitor's personal interests or their associates, then the solicitor cannot act except as permitted by rule 12. The associates may be professional, financial, or family.³²¹

The circumstances in which a conflict between duty and interest might arise are varied, and can include transactions involving:

the charging of excessive fees or disbursements (see rule 12.2),
lending to or borrowing from a client (see rule 12.3),
a will or other instrument benefiting the solicitor (see rule 12.4),
receiving or paying a referral fee or commission (see rule 12.4),
inter vivos gifts and benefits to the solicitor,³²²
conducting a managed investment scheme,³²³
buying from or selling to a client,
investment in a client's business,
the exercise of a power of attorney, and
the representation of friends and family members.

Accepting gifts

Whether a solicitor can accept a gift from a client will depend on the nature of the gift and whether the solicitor is continuing to represent the client. For example, if the solicitor's retainer has ended, or a transaction has been completed, then a modest gift given in gratitude by the client is acceptable.³²⁴

Benefits in excess of fair remuneration

Other than as expressly permitted by rule 12, a solicitor must not gain benefit in excess of fair remuneration for legal services. Any excess benefit is presumed to be an exercise of undue influence over the client (see below). Rule 12.2 reflects the civil law prohibition against a fiduciary deriving a financial advantage through undue influence and extends to any financial dealings with their clients beyond charging a fair and reasonable fee. If a breach is found, the transaction may be set aside in equity with damages and an account of profits, in addition to any disciplinary charges.³²⁵

Presumption of undue influence

The nature of the solicitor and client relationship is one of trust and confidence. As with all fiduciary relationships, there is a presumption of undue influence that stems from the imbalance in power and knowledge.³²⁶ Any excessive gain by the solicitor is presumed to be a result of the undue influence. That presumption can only be rebutted by the client receiving full disclosure and independent advice. Any apparent common intention on the part of the solicitor and the client is irrelevant.

Fair remuneration

The negotiation of legal costs is the transaction in which the solicitor's superiority of knowledge and experience, and therefore influence, is most apparent. The client's interests are therefore protected in equity, by the Legal Profession Act and by the ASCR. The twin objectives of consumer protection and professional standards are met by the costs disclosure and assessment regime of pt 3.4 of the Legal Profession Act. The non-exclusive grounds for the setting aside of costs agreements are instructive as to what are 'fair and reasonable' costs.³²⁷

The charging of excessive legal costs can constitute unsatisfactory professional conduct or professional misconduct.³²⁸ The court also has an inherent jurisdiction to supervise the conduct of solicitors in relation to costs and address any breach.³²⁹

Borrowing from clients

Rule 12.3 prohibits a solicitor from borrowing from a client, or from a former client who continues to rely on the law practice for advice relating to investments. The prohibition operates regardless of any consent from the client.

Exceptions to the prohibition on borrowing

Rule 12.3 also contains exceptions. The solicitor may avoid disciplinary action where the client is:

the solicitor's employer,
an authorised deposit-taking institution under the Banking Act 1959 (Cth) (such as a bank),
a trustee company,
the responsible entity or custodian of a managed investment scheme registered under Chapter 5C of the Corporations Act 2001 (Cth) or a custodian for such a scheme, or
the solicitor's associate, and all fiduciary duties are discharged (these duties are discussed below).

In all these cases, the solicitor still owes the fiduciary obligations noted above to obtain the client's fully informed consent to the terms of the loan.

Satisfying the fiduciary duty

The fiduciary obligation to a client in respect of borrowing, where permitted under one of the exceptions noted above, is particularly onerous. The solicitor must show that all steps have been taken to protect the client's interests. The duty is discharged if:

the solicitor has given full and frank disclosure of their personal interest,
has advised the client to obtain independent advice, and
has secured the client's fully informed consent to the terms of the loan.³³⁰

These actions prevent solicitors taking advantage of clients by providing inadequate security, poor terms or interest, or by exposing the client to excessive risk.

Even if there is technical compliance with rule 12, it is still possible that a solicitor could act in a way that places their interest above a client and could still result in a disciplinary application for breach of the fiduciary duty.³³¹

Rule 12.3 prohibition compared with common law

The prohibition in rule 12.3 is significantly stricter than the solicitor's fiduciary duty expressed in common law as borrowings are prohibited unless allowed by the express exceptions in the rule. Breaches of the predecessor rule have led to solicitors being removed from practice.³³²

No amount of client consent can cure the breach of professional standards. The following are examples of prohibition borrowing:

In Re X³³³ a solicitor advised the client to obtain independent advice but the client refused to do so. The solicitor was still found to be in breach of the former rule 86 and fined $2,500.
In Queensland Law Society v Wakeling,³³⁴ a solicitor received instructions to act for clients A, B and C in a sale of land. He was paid $10,000 by the purchaser as a deposit, which the solicitor held in his trust account. However, before completion of the contract, client A authorised the solicitor to transfer the $10,000 to his office account as an unsecured loan for 'general use'. Neither B nor C nor the purchaser gave permission for this transfer, so the transfer was not properly authorised. Even if it was authorised, the court noted that such a borrowing contravened the rule.³³⁵
The prohibition on borrowing is violated when a solicitor makes an unauthorised withdrawal of trust money that is subsequently reimbursed. If the solicitor secured some use of the money in the period before reimbursement, there has effectively been a borrowing from the client.

Solicitor as executor

Although not an unusual request, a solicitor should nonetheless exercise caution before agreeing to accept appointment as an executor of a client’s will. If the solicitor accepts the appointment, they must make the disclosures required by rule 12.4.1 before the will is signed and otherwise satisfy their fiduciary duty to their client. The law restricts the preparation of a will containing a gift to the solicitor preparing it other than the solicitor’s proper fees or which may be part of an executor’s commission (see rule 12.4.2). Exceptions exist where the will is prepared by the solicitor for an immediate family member, for an immediate family member of the solicitor’s spouse, or for certain colleagues (law firm partner, employer or employee).

As there is a real potential for conflict, solicitors should carefully consider whether it is appropriate to act as an executor, including whether the solicitor has sufficient experience in wills and estate. In Re Will and Estate of Mary Irene McClung the court stated that:

[t]he occasion on which a solicitor receives instructions for the preparation of a will for a client by a solicitor can place the solicitor on the horns of a dilemma if the solicitor is asked to act as executor under the will. It is not a position which the solicitor should seek.³³⁶

Informed consent of client

Rule 12.4.1 sets out the disclosures that must be made in writing prior to the client signing the will. They include:

any entitlement to a commission for acting as executor,
that the client may appoint another person with no entitlement to commission, and
any entitlement to claim legal costs.

The intention is to ensure that the client understands the entitlement of the solicitor and the consequences of the appointment of the solicitor as executor. In Re Will and Estate of Mary Irene McClung,³³⁷ the court noted that with respect to costs it may be reasonable for a solicitor to accept the position as executor provided they preface any acceptance with a requirement that the will includes a charging clause for legal services performed for the estate. However, requesting a charging clause for all possible executor services ‘is not reasonable unless the solicitor ensures that the will provides that such charges may be made in lieu of any entitlement to commission and the full import of the clause is explained to the client’.³³⁸

The solicitor should also inform the client of the maximum rate of commission which would be charged, and the possible burden such commission may impose both on the corpus and income of the estate.³³⁹ A solicitor executor who charges a commission beyond that entitled may be guilty of professional misconduct.

Solicitor executors who are sole practitioners should also be aware of the unique challenges in accepting such an appointment.³⁴⁰

Solicitor as beneficiary

Rule 12.2 does not allow a solicitor to receive a substantial gift from a client under a will or other instrument prepared by the solicitor and is a special case of the general rule against receiving benefits in excess of fair and reasonable remuneration. Both the professional conduct standards and the common law restrict such gifts. The rule is not concerned with insignificant gifts.

A solicitor may receive a substantial benefit under a will drafted by the solicitor if the testator is in their immediate family, the immediate family of their spouse, or a partner, employer, or employee solicitor (or their immediate family). In other cases, the solicitor cannot prepare the will and may face disciplinary penalties in addition to civil law remedies.³⁴¹

Prohibition against acting if a beneficiary

The common law suggests that, as a professional conduct standard, a solicitor who is to receive a benefit under a will or other instrument should not act.

Rules 12.1 and 12.4.2 prohibit the solicitor from acting for the client even if the client is exercising a free judgment in leaving the gift to the solicitor, subject to exceptions.

Rule 12.4.2 allows the solicitor to obtain a material benefit under a will drafted for their close family and associates. It is the only exception to the prohibition.

The presumption of undue influence

Nevertheless, the presumption of undue influence will still apply in these cases, and some of those listed may be people who are even more vulnerable because of undue pressure. Accordingly, the solicitor must be prepared to rebut the civil law presumption of undue influence. If not, there may still be disciplinary proceedings for breach of the civil standard.³⁴²

The relationship between solicitor and client has long been presumed by courts of equity to be one of undue influence. As a result, a solicitor who receives a benefit (such as a gift or a legacy) under the will or instrument of a client is presumed to have exercised undue influence even if the solicitor is allowed to draft the will under rule 12.4.2. Without proving anything more, other beneficiaries of the client may have the gift or legacy set aside.³⁴³

Importantly, it is not necessary that the solicitor who received the gift or legacy is actually the solicitor who drew the will or instrument. The presumption may arise where the solicitor has been instructed in other matters. The source of equity is the habitual reliance and confidence arising from the relationship. Nevertheless, it would normally be the case that the relationship between solicitor and client is close and maintained for a significant period. Therefore, the presumption would not necessarily arise where the solicitor has been instructed in one isolated matter (other than the drawing of the will in question), if the client has simultaneously retained a number of different solicitors for different matters, or if a considerable period of time had elapsed since the solicitor ceased acting for the testator.

If the presumption exists, and undue influence is raised by another beneficiary, the onus will be on the solicitor wishing to keep the gift to show that:

‘the gift was the independent and well-understood act of a man in a position to exercise a free judgment based on information as full as that of the donee’, and
that the transaction cannot be attributed to the relationship of inequality between solicitor and client.³⁴⁴

How that ‘free judgment’ is shown will depend on the circumstances. Advising the client to obtain independent advice is an important factor in determining whether the gift is the ‘pure, voluntary, well-understood act of the mind of the donor'.³⁴⁵ The more valuable the gift, the more important independent legal advice will be.³⁴⁶ Where a presumption is raised, the court will set aside the gift unless the solicitor can establish it was the spontaneous act of the donor acting in circumstances which enabled the donor to exercise an independent will. Whether the client is generally 'sophisticated and well-informed' will be a factor.

Referral fees paid two or received from third parties

A solicitor may receive a referral fee or commission from a third party in where the solicitor refers a client to that third party (such as a real estate agent) provided the client has been made aware in advance of the arrangement. For Queensland practitioners, see Guidance Statement No. 4 – Receiving Referral fees and Rule 12.4.3 Australian Solicitors’ Conduct Rules.³⁴⁷

Serious criminal responsibility can also arise in any case where a solicitor secretly receives a commission from a third party in relation to a client's business, or that would in any way influence the solicitor's representation of the client.³⁴⁸ These criminal offences provisions operate in addition to disciplinary rules.

In Queensland, no person can reward or receive a reward from another for soliciting or inducing a 'potential claimant' to make a claim for compensation or damages for personal injury.³⁴⁹ A solicitor who pays a referral fee may be soliciting a potential claimant to make a claim, and the solicitor who receives a referral fee may be involved in that inducement.

Referral fees paid to third parties

Apart from the statutory prohibitions noted under rule 12.4.3, a solicitor may pay a third party a benefit for referring the client, if benefit is disclosed to the client.

For Queensland practitioners, refer to Guidance Statement No. 3 – Paying Referral Fees and Rule 12.4.4 Australian Solicitors Conduct Rules.³⁵⁰

^{318. Law Society of NSW v Harvey [1976] 2 NSWLR 154. See also Law Council of Australia 2024 Commentary (n 1) 71.

319. (1988) 24 NSWLR 204, 219.

320. See, eg, PD Finn, Fiduciary Obligations (The Law Book Company Ltd, 1977) 161–168.

321. See Glossary to the ASCR.

322. Re a Solicitor [1975] QB 475.

323. O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204.

324. See below page 60 for further discussion about gifts.

325. Law Society of New South Wales v Harvey [1976] 2 NSWLR 154.

326. Wright v Carter [1903] 1 Ch 27, 50.

327. Legal Profession Act (n 5) s 382(2).

328. Legal Profession Act (n 5) s 420(1)(b). See also Council of the Queensland Law Society v Roche [2004] 2 Qd R 574; Legal Services Commissioner v Duffield [2007] LPG 05/07; Law Society of New South Wales v Foreman [1994] 34 NSWLR 408.

329. Re Morris Fletcher and Cross' Bill of Costs [1997] 2 Qd R 228.

330. Law Society of New South Wales v Harvey [1976] 2 NSWLR 154

331. See, eg, Legal Services Commissioner v Hoolihan [2006] LPT 003, 9–10.

332. Queensland Law Society Rule 1987 (Qld) r 86; Re Barry SC 372, 30 October 1996; Re Andersen SCT 74, 13 August 2002.

333. [1999] SCT 13.

334. [2004] QCA 42.

335. Ibid [18].

336. [2006] VSC 209, [34]. See also Walker v O'Alessandro [2010] VSC 15; Re Will and Estate of Foster [2012] VSC 315.

337. [2006] VSC 209.

338. Ibid 209, [34] (emphasis added). For Victoria, see now ss 65B and 65C of the Administration and Probate Act 1958 (Vic) (refer to LCA Commentary, 73).

339. Ibid [35].

340. Legal Services Commissioner v Bone [2013] QCAT 550; New South Wales Law Society, Solicitors as Executors - Q&As, 2018.

341. See above page 57 for further discussion about gifts.

342. Legal Practitioners Complaints Committee v Clark [2006] WASAT 119 (this case pre-dates the ASCR and the client would not have fallen within the categories in rule 12.4.2).

343. Dowsett v Reid (1912) 15 CLR 695, 707.

344. Johnson v Buttress (1936) 56 CLR 113, 134–5, discussed in Weiss v Barker Gosling (1993) 16 Fam LR 728, 761.

345. Ibid 113.

346. Union Fidelity Trustee Company of Australia Ltd v Gibson [1971] VR 573, 577.

347. Queensland Law Society, Receiving Referral Fees and Rule 12.4.3 Australian Solicitors Conduct Rules (Guidance Statement No. 4, 28 April 2023).

348. Criminal Code 1899 (Qld), ss 442A–442M.

349. Personal Injuries Proceedings Act 2002 (Qld) s 68(1); Legal Services Commission - Guidance on Claim farming.

350. Queensland Law Society, Paying Referral Fees and Rule 12.4.4 Australian Solicitors Conduct Rules (Guidance Statement No. 3, 10 July 2023).}

Completion of legal services

Subject to rule 13.1, a solicitor must complete the work for which they were retained before any liability for costs arises with the client (subject to the express terms of any retainer). Solicitors’ retainers are in this way viewed as entire contracts.³⁵¹ This presumption is not unqualified. For example, a solicitor has a right to recover their professional costs on a restitutionary basis for work done before termination of the engagement.³⁵² The solicitor and client can agree that the solicitor is entitled to charge on an interim basis for professional services and disbursements.

The engagement can only be terminated as provided by rule 13.1:

by prior agreement of the client,
by the client discharging the solicitor,
by the solicitor terminating the engagement for just cause and on reasonable notice, or
by operation of law.

For Queensland practitioners, see Guidance Statement No. 8 – Termination of a retainer.³⁵³

^{351. Cutter v Powell (1795) 101 ER 573.

352. Planché v Colburn [1831] ER 856; Legal Services Commissioner v Baker [2006] QCA 145, [3].

353. Queensland Law Society, Termination of a retainer (Guidance Statement No. 8, 16 October 2024).}

Introduction

The Law Council of Australia 2024 Commentary noted³⁵⁴ that:

The first principle underpinning Rule 14.1 is that client documents remain the property of the client and must be returned to the client at the completion or termination of the engagement between the client and solicitor.

The second principle underpinning Rule 14.1 is that a solicitor has a common law lien over property of the client in his or her possession, which entitles the solicitor to nevertheless retain possession of the documents (or trust money or trust property) until his or her taxable costs have been paid.³⁵⁵

Rule 14.2 provides that it is acceptable for a solicitor to destroy client documents 7 years after the engagement was completed or terminated unless there are client instructions or legal obligations to the contrary.

Application

The Glossary defines ‘document’ as:

any record of information, and includes:

anything on which there is writing, and
anything on which there are marks, figures, symbols or perforations having a meaning for persons qualified to interpret them, and
anything from which sounds, images or writings can be reproduced with or without the aid of anything else, and
a map, plan, drawing or photograph,

and a reference to a document includes a reference to -

any part of the document, and
any copy, reproduction or duplicate of the document or any part of the document, and
any part of such a copy, reproduction or duplicate.

When is a document a client document?

Whether a document belongs to the client or the solicitor will depend on the circumstances.

The Glossary defines ‘client documents’ to mean ‘documents of a client’, examples of which are set out in Appendix C.

Any original documents that were created by the client or third parties before the solicitor was formally retained but are later provided to the solicitor (either by the client or by third parties) during the course of the retainer are held by the solicitor on behalf of whoever provided them. This effectively means that those documents remain the property of the client (or the third party), not the solicitor. This will not ordinarily extend to electronic copies of original documents provided to the solicitor, where the original remains in the client’s or third party’s possession, or to electronic documents and files such as emails and their attachments that are forwarded to the solicitor by the client or a third party. However, electronic documents on physical media that have been provided to the solicitor where the client does not retain the original files should be treated as ‘client documents’.

A solicitor may nonetheless own the intellectual property (such as copyright) in a document even though it is a ‘client document’ and the client’s right to use it beyond the scope of the retainer will depend on the circumstances.

In Wentworth v de Montford, Hope JA identified types of documents brought into existence during the retainer.³⁵⁶ The general approach adopted by Hope JA is that documents belonging to the client are those:

prepared by the solicitor for the benefit of the client and which may be said to have been paid for by the client, and
prepared by a third party and sent to the solicitor (other than at the solicitor’s expense) with the intention that they belong to the client.

Documents belonging to the solicitor are those:

prepared by the solicitor for their own benefit or protection, and not regarded as an item chargeable against the client,³⁵⁷ and
sent by the client and intended by the client to belong to the solicitor.

File notes that have been prepared for the solicitor’s benefit (and are not charged to the client) will usually be considered to be the solicitor’s documents but there may be instances where a file note taken during a meeting will be the client’s document as the solicitors have charged the client for the work that they have done while attending the meeting.³⁵⁸

Handing over client documents on request

Rule 14.1 applies when a client’s matter is completed, or the retainer terminated. Unless there is an effective lien,³⁵⁹ when a client or former client, or a person authorised by them, requests client documents, then the solicitor is to deliver any client documents as soon as reasonably possible. What is considered a ‘reasonable time’ is a question of fact that will depend on the circumstances.

Once a solicitor has delivered the client documents to the client, there is no obligation to hand over further copies. If the client loses them and/or asks for another set, the solicitor is under no duty to provide a further complete set or a copy of selected documents. The solicitor may nonetheless retain copies for their own purposes, although the client should not be charged for such copies. Many or even all of the documents to which the client may be entitled may have already been provided to the client during the course of the matter.

Means of delivery

Whether a solicitor effectively delivers client documents will also depend on the circumstances. Where the solicitor and client have explicitly or implicitly agreed that client documents are to be held in a specific format (for example electronically or in hard copy), then delivery in that format would be appropriate.

For Queensland practitioners, see Guidance Statement No. 6 – Form of Delivery for Client Documents.³⁶⁰

Destruction of client documents

Client consent

Rule 14.2 on its face allows a solicitor to destroy client documents seven years after the engagement ends, subject to client instructions or legislation. Nonetheless, client consent is best secured for the destruction.

Queensland solicitors are referred to the Legal Profession Act which determines what solicitors should do if they have not obtained such client consent.³⁶¹ It is strongly recommended that solicitors have a file destruction clause in the costs agreement from the outset and remind the client of this clause at the end of the retainer.³⁶²

Period of retention

Rule 14.2 states that documents are to be kept for seven years or as legal obligations demand (such as ongoing proceedings).

As claims arising from the retainer can take time to mature, it may be prudent to keep client documents beyond the period suggested by the rule.

The specific limitation periods of the matter also need to be considered before destroying client documents.³⁶³ In some cases it is recommended to retain relevant material for up to 25 years or longer, or if the file relates to the creation of a document with long term operation, for the entire lifespan of that document plus six years.

Section 60 of the Legal Profession Regulation 2007 (Qld) requires the retention of trust records for a period of seven years, excluding the client’s instructions or consent to destroy it earlier.

The approach to document retention must also be balanced against the risks associated with retaining client information longer than necessary, such as the very real risks arising from cyber attacks, for which the solicitor may be liable. This risk may or may not be covered by professional indemnity insurance.

Practices covered by the Privacy Act 1988 (Cth) also need to bear in mind Australian Privacy Principle 11 which mandates the destruction of personal information no longer needed by the firm (provided retention is not required by another law).

The retention of information for protection of the solicitor needs to be balanced in this way against the risk to the client from retention and supplemented by appropriate security measures. A periodic review of client information held with a schedule for regular destruction and / or deletion in keeping with rules for retention is recommended.

For Queensland practitioners, see the QLS Client Document Retention Guidance.³⁶⁴

Safe custody documents such as wills and other original documents

In The Public Trustee of Queensland as a Corporation Sole, Daubney J stated that:

[a] solicitor to whom a testator entrusts a testamentary document for safekeeping holds that document as bailee. The existence of the bailment gives rise to a range of obligations on the bailee (not the least of which is not to part with possession of the bailed property other than in accordance with the bailer’s instructions) and a range of rights in the bailer.³⁶⁵

^{354 Law Council of Australia 2024 Commentary (n 1) 79.

355 In the matter of Mamounia Pty Ltd (In Liquidation) (ACN 007 091 349) [2018] VSC 65, [24], [34].

356 (1988) 15 NSWLR 348, 355–6.

357 McGrath v Macrossan & Amiet [2007] QSC 305, [6].

358 Alexiou v Alexandra White and ors t/as HWL Ebsworth Lawyers [2021] NSWSC 485, [73].

359 See below page 70 for rule 15 commentary on lien over documents.

360 Queensland Law Society, Form of Delivery for Client Documents (Guidance Statement No. 6, 20 November 2024).

361 Legal Profession Act (n 5) s 713A.

362 Howard Moses, ‘Destroying Client Files? Not without client instructions!’ (2008) 28(11) Proctor 14–16.

363 For relevant times see Legal Profession Act (n 5) s 713A; Limitations of Actions Act 1974 (Qld); Personal Injuries and Proceedings Act 2002 (Qld).

364 Queensland Law Society, Client Document Retention Guidance (Guide, March 2024).

365 [2012] QSC 178, [14].}

Lien over client’s documents

Where a retainer ends and a client instructs a new solicitor while still having outstanding costs to the former solicitor, that former solicitor may exercise a retaining lien over client documents necessary for ongoing proceedings. However, where there is reasonable security for costs on the outstanding amount, the former solicitor must deliver the documents to the new solicitor.

Delivery should be to the new solicitor who is offering that security (rule 15.1.1), or otherwise to the client (rule 15.1.2).

For Queensland solicitors insured by Lexon, please refer to Lexon’s insurance checklist on the transfer of a client file³⁶⁶ See also Guidance Statement 6 – Form of Delivery for Client Documents and Guidance Statement 30 – Transfer of files.³⁶⁷

A retaining lien enables a solicitor to ‘withhold possession of the documents or other personal property of his client or former client’ until their costs are paid.³⁶⁸ The lien exists no matter whether the client discharged the solicitor, or the solicitor discharged the client (provided that the solicitor’s termination was for ‘just cause’). If a solicitor terminates the retainer, the solicitor’s rights to exercise the lien are qualified. The lien is qualified in the sense that the court can require the solicitor to deliver up the client documents to the new solicitor, who holds subject to the former solicitor’s lien. This prevents a client from:

in effect getting solicitors’ work done for nothing by the simple expedient of changing his solicitor as often as he chose, leaving a trail of unpaid costs in his wake and demanding the papers without payment when he had no just cause to complain of the conduct of the solicitors instructed and discarded.³⁶⁹

The retaining lien may be exercised over a client’s passport³⁷⁰ and monies in a trust account.³⁷¹ However, a solicitor cannot claim a lien over a will.³⁷²

Reasonable security for essential documents

At common law, the court has discretion to order a solicitor to hand over documents to new solicitors to ‘save the client’s litigation from catastrophe’. This is subject to the new solicitor’s undertaking ‘to preserve the original solicitor’s lien and to return the papers to the original solicitor, for what they are worth, after the end of the litigation’.³⁷³

Reasonable security is understood to mean ‘the provision, in lieu of payment, of something of monetary value which would ensure the satisfaction of the possessory lien’.³⁷⁴ Apart from undertakings, tripartite deeds may be regarded as reasonable security and templates have been approved for the purpose by the Law Society of New South Wales. However, where the solicitor has terminated the retainer without good cause, the court can require the solicitor to deliver up the file to the new solicitor, but ‘the court will not … be overly fastidious to ensure the adequacy of the former solicitor’s security for his fees’.³⁷⁵

^{366. Lexon Insurance, LastCheck > File Transfer – Sending and Receiving (Checklist, January 2025).

367. Queensland Law Society, Form of Delivery for Client Documents (Guidance Statement No. 6, 20 November 2024); Queensland Law Society, Transfer of files (Guidance Statement No. 30, 23 February 2022).

368. Barratt v Gough-Thomas [1951] Ch 242, 250.

369. Hughes v Hughes [1958] 3 All ER 179, 180–181.

370. Xu v Council of the Law Society of NSW [2009] NSWCA 430.

371. Legal Profession Act (n 5) s 258(1)(a).

372. Hawkins v Clayton (1988) 164 CLR 539, 550.

373. Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 WLR 614, 624–5.

374. Bechara t/as Bechara & Co v Atie [2005] NSWCA 268, [64].

375. Stark v Dennett (2008) 2 Qd R 72, [49] (Keane JA).}

Charging for storage

In Legal Services Commissioner v Rose (No 2) (Legal Practice),³⁷⁶ the Tribunal found the solicitor guilty of unsatisfactory professional conduct for charging a retrieval fee without the client’s written consent. Rule 16 was amended to clarify that from 27 September 2023 the rule extends to all forms of storage of documents and the proviso applies where client consent has been provided (whether or not in writing).³⁷⁷

Where a solicitor makes a copy of a client’s documents prior to the client collecting them, such copies must be made at the solicitor’s cost. This is because they are being retained for the solicitor’s benefit, not the client’s.

Where the solicitor proposes to charge for imaging documents for electronic archiving on the client’s behalf, the client should be informed that they are entitled to instead collect the file without charge.

^{376. [2007] VCAT 2465.

377. Law Council of Australia 2024 Commentary (n 1) 84.}

This section contains Rules 7-16

Clear and timely advice

Alternative dispute resolution

Lawful and proper

Competent instructions

Litigation and contract (capacity tests and comment)

Enduring documents

Will instructions

Related content

Duty to keep information confidential

What is Confidential Information?

Public domain

Imputed knowledge within a legal practice

Duration

Metadata, technology, and outsourcing

Exceptions to duty of confidentiality

Authorised by client (rule 9.2.1)

Permitted or compelled by law (rule 9.2.2)

Privilege

Disclosure to obtain ethical or legal advice (rule 9.2.3)

Avoiding probable crimes (rule 9.2.4)

Preventing physical harm (rule 9.2.5)

Information disclosed to the insurer (rule 9.2.6)

Related content

Overview

Ongoing duty of confidentiality

Duty of loyalty

Confidential information

Material and detrimental to the interests of the former client if disclosed

Informed consent as an exception to the duty

Information barriers as an exception to the duty

Required strength of information barriers

Guidelines for information barriers

Undertakings in information barriers

The inherent jurisdiction to restrain a solicitor from acting for a client

Related content

Overview

Duty to avoid conflicts between current clients

Duty to withdraw from one or both clients

Informed consent

What is informed consent?

Consent in writing

Multiple representations by type of matter

Conveyancing

Contentious litigation

Criminal matters

Confidentiality to be protected by information barriers

Conflict arising during course of matter

Related content

Overview

Application

Legal assistance service provider

Conflict with solicitor's own interests

Accepting gifts

Benefits in excess of fair remuneration

Presumption of undue influence

Fair remuneration

Borrowing from clients

Exceptions to the prohibition on borrowing

Satisfying the fiduciary duty

Rule 12.3 prohibition compared with common law

Solicitor as executor

Informed consent of client

Solicitor as beneficiary

Prohibition against acting if a beneficiary

The presumption of undue influence

Referral fees paid two or received from third parties

Referral fees paid to third parties

Related content

Completion of legal services

Related content

Introduction

Application

When is a document a client document?

Handing over client documents on request

Means of delivery

Destruction of client documents

Client consent

Period of retention