Matthews & Matthews (No 2)

The parties to this proceeding were Matthews & Matthews, a firm of solicitors, and the respondent, who had engaged their services. The dispute concerned the firm's entitlement to recover costs for work performed in relation to a family law matter. The matter came before Watts J in the Supreme Court of Western Australia.

The central legal issue before the court was whether the solicitors had breached their duty of care to the client by failing to advise adequately on the potential for adverse costs orders in the underlying family law proceedings. Specifically, the court had to determine if the advice provided regarding the prospects of success and the potential for an adverse costs order was sufficient to meet the standard of care expected of a reasonably competent solicitor in Western Australia.

Watts J reasoned that a solicitor's duty of care extends to providing informed advice about the risks and potential consequences of litigation, including the possibility of an adverse costs order. The court found that the advice given by Matthews & Matthews in this instance fell short of that standard. The firm had not adequately explained the specific risks associated with the client's conduct in the family law proceedings and the likelihood of an adverse costs order being made against her. This failure meant the client was not in a position to make a fully informed decision about whether to continue with the litigation.

Consequently, Watts J ordered that Matthews & Matthews were not entitled to recover the full amount of their costs. The court determined that a reduction in the costs awarded was appropriate to reflect the breach of duty.