Solicitors' Liability Committee v Gray

- The Federal Court of Australia heard an appeal by the Solicitors' Liability Committee against the decision of a judge of the Court (Olney J) which found that a liability incurred by a firm of solicitors, Gray & Winter, in settling a claim for damages, was incurred in connection with their practice as solicitors. The firm cross-appealed from Olney J's finding that they were not entitled to be indemnified for their costs and expenses reasonably and necessarily incurred in certain matters. The court considered the legal issues of whether the liability incurred by the solicitors was incurred in connection with their practice as solicitors and whether the indemnity policy covered the costs and expenses reasonably and necessarily incurred in the settlement of the claim and in the subsequent proceedings.
- The court held that the liability incurred by the solicitors was not incurred in connection with their practice as solicitors, as their activities were primarily entrepreneurial and not professional in nature. The court also held that the indemnity policy did not cover the costs and expenses reasonably and necessarily incurred in the settlement of the claim and in the subsequent proceedings, as they were not truly incidental to the litigation.
- The appeal was allowed, with costs, and the cross-appeal was dismissed, with costs. The judgment and orders made at first instance were set aside, and the application was dismissed, with costs.