Pekar v Rickards Legal

In *Pekar v Rickards Legal*, the Supreme Court of Queensland was asked to determine whether a solicitor, Rickards Legal, had breached its duty of care to its client, Pekar, by failing to advise Pekar of the potential for a costs order against him in separate proceedings. Pekar alleged that Rickards Legal had negligently failed to inform him of the risk of being ordered to pay the costs of the other party in the underlying litigation, which he subsequently incurred.

The central legal issue before the Court was whether the duty of care owed by a solicitor to their client extended to advising on the potential for adverse costs orders in circumstances where the client was not the party seeking costs, but rather the party who might be ordered to pay them. The Court had to consider the scope of a solicitor's duty to inform and advise, particularly concerning financial risks that might arise from litigation.

Judge Hartnett found that a solicitor's duty of care does encompass advising a client on the potential for adverse costs orders, even if the client is not the party seeking costs. The Court reasoned that such advice is a fundamental aspect of managing a client's litigation and protecting their financial interests. Failing to provide this advice could lead to unexpected and significant financial detriment. The Court applied the principles of negligence, focusing on the foreseeability of harm and the solicitor's obligation to act with reasonable care and skill in advising their client on all material aspects of their case, including potential financial liabilities.

The Court ultimately found that Rickards Legal had breached its duty of care to Pekar by failing to advise him of the risk of an adverse costs order. The proceedings were adjourned for further submissions on the question of damages.