BURT and ANOR v WARE [1998] NSWCA 48

BURT v WARE

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MASON P, BEAZLEY JA and FITZGERALD AJA 28 October 1998, 28 October 1998

[1998] NSWCA 48

Negligence — solicitor and client relationship — workers compensation rights extinguished by settlement — client advised of this immediately prior to giving instructions to settle — communication of advice in writing not essential

Mason P This is the judgment in the matter of Burt and Ware. In September 1986 the respondent was injured in a motor vehicle accident. He was on a periodic journey from his place of residence to his place of employment at the time.

The appellants are solicitors who were retained by the respondent shortly after the accident. They challenged Judge McLachlan's finding of liability for professional negligence relating to the settlement of third party proceedings brought by the respondent against the Government Insurance Office (GIO), the insurer of the. allegedly negligent driver of the other vehicle.

The action was commenced in the Parramatta District Court on 22 October 1986 and settled for the sum of $75,000, inclusive of costs, on 25 September 1987. The respondent received the net sum of $46,259 after deduction of medical expenses, legal fees and other deductions including the sum of $687.82 paid to the respondent's workers compensation insurer.

The GIO's insured had crashed into the rear of the respondent's motor vehicle which was stationary at the time. The respondent was wearing a seat belt.

Accordingly it was found by the learned primary judge that the third party proceedings were effectively a dispute about quantum of damages, with no likelihood of a discount for contributory negligence.

Not only did the settlement of the third party proceedings terminate the respondent's so called common law rights arising out of the negligence of the GIO's insured, but it also terminated the respondent's right to recover further compensation pursuant to the Workers Compensation Act. It was common ground at the trial in the present proceedings that a reasonably prudent solicitor would have advised a plaintiff in September 1987 that settlement of a claim for damages would terminate the right to future payments of workers compensation. The appellant's case was that this advice was given. The respondent's primary case was that he had been advised the very opposite.