Prospects of Success in Litigation

It is logical to assume that a matter will go to trial where each of the contesting parties believes that he or she has good (or at least reasonable) prospects of succeeding. The logic is fortified by the application of the costs indemnity rule. Few rational litigants, it could be surmised, would press a matter to adjudication in the face of a strong prospect of not only proving unsuccessful (with whatever financial and other consequences may stem from this), but also liability for (most of) the opponent’s legal costs. Rational litigants, moreover, would take the advice of their legal representatives, who in an ideal world would, to the extent possible, accurately advise as to the chances of success (or failure).

In this logical and rational world, the only cases to reach the adjudicative stage would be those wherein the law and/or the facts would be sufficiently finely balanced as to foster advice by each legal representative that their clients’ (competing) cases have reasonable prospects of success. This is presumably what spawned, for instance, statutory provisions in the Australian Capital Territory and New South Wales that proscribe a law practice from acting in a matter except where the claim or defence has “reasonable prospects of success”.1 Yet that a matter lacks “reasonable prospects of success” if it is “so lacking in merit or substance as to be not fairly arguable”2 means that the statute sets “a high threshold” for its contravention.3 The latter stems from a belief, no doubt, that while lawyers should legitimately have a “chilling effect”4 on litigation involving claims or defences that are “not fairly arguable”, they should not necessarily be an impediment to those that fall outside of this descriptor.

Of course, not all clients behave rationally. It was once thought that lawyers could legitimately pursue hopeless cases or defences on a client’s behalf provided that the client was fully informed as to the (very) likely adverse consequences.5 The assumption was that lawyers are client agents, and so act on (informed) client instructions. Nowadays, even outside of statutory prescription such as the above, courts acknowledge that for a lawyer to pursue a hopeless case or defence represents a breach of the lawyer’s duty to the court, amounting to an abuse of court processes. This may in turn sound in a personal costs order 6 and/or professional discipline.

There is nonetheless a distinction between a genuinely hopeless case and one that is weak. The law accepts that a client may seek to sustain a weak case or defence if he or she is fully informed as to its weakness, and the likely adverse consequences. Most clients, as a matter of self-interest, presumably will not. Lawyers accordingly perform a critical role in case “screening”, a role that is critical not just for their clients, but for the courts and indeed their own financial and other welfare.

In a recent disciplinary determination, a lawyer discouraged his vulnerable clients from seeking a negotiated solution with their bank in the face of the bank’s prospective foreclosure against them.7 Advising the clients “don’t settle”, arranging for them not to attend mediation, and concurrently making wide-ranging (but unsupported) allegations of fraud and corruption against the bank, fostered in the clients the (incorrect) impression that their case had merit. No advice was supplied as to the considerable financial risk to which the clients were being subjected in the litigation. On this basis, the lawyer was found guilty of professional misconduct.

So while it may be tempting to give a client the advice he or she wishes to hear as to the strength of a claim or defence, for multiple reasons it behooves lawyers to exercise independent judgment in providing clients a “reality check”.

Gino Dal Pont
Professor, Faculty of Law
University of Tasmania

1. Civil Law (Wrongs) Act 2002 (ACT) s 188(1), 188(2); Legal Profession Uniform Law Application Act 2014 (NSW) Sch 2, cll 2(1), 4(1).
2. Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284 at [28] per Barrett J.
3. Treadwell v Hickey [2010] NSWSC 1119 at [25] per Barrett J.
4. Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 at [126] per McColl JA.
5. Re Cooke (1889) 5 TLR 407.
6. See, for example, Flower & Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134.
7. Victorian Legal Services Commissioner v Beling [2017] VCAT 1022.