Cost recovery when acting for yourself

Self-represented law firms cannot recover costs in respect of work performed by partners, but a 2025 High Court decision means they can recover the costs of employed solicitors.

The current principles for assessing recovery of costs of self-represented law firms are:

1. The general rule is that self-represented litigants cannot recover the costs of their own time in litigation.
2. The Chorley exception, allowing lawyers to recover costs for their own time in litigation, does not apply in Australia as it is ‘an affront to equality before the law (Bell Lawyers Pty Ltd v Janet Pentelow (2019) 269 CLR 333: Kiefel CJ, Bell, Keane and Gordon JJ [24]).
3. A self-represented law firm can recover the costs incurred by their employee solicitor acting in the litigation as part of the in-house solicitor rule exception to the general rule.
4. Quantifying the costs of the employee solicitor is likely to be approached by comparing the costs to those that would have been incurred by an independent solicitor on the presumption that the litigant would not recover more than was incurred.
5. This presumption may be overturned where there is a ‘good and sufficient cause’.

Professional tip:

While these principles may encourage firms to represent themselves caution is warranted because:

• self-represented litigants may lack the impartiality and independence the court expects of practitioners as highlighted in Bell v Pentelow
• calculation of the professional costs of employed solicitors may be complex as the quantification is not clear cut as highlighted in Birketu v Atanaskovic
• while instructing external lawyers in actions for unpaid legal fees means incurring ‘out of pocket’ costs, it will ensure you receive the benefit of independent and dispassionate legal advice at a time when your emotions may be running higher than usual.

Leading cases involving costs for law firms representing themselves are set out below.

Bell Lawyers Pty Ltd v Janet Pentelow (2019) 269 CLR 333: Chorley exception not law in Australia

Bell v Pentelow involved a barrister who sued solicitors for unpaid fees for appearing in a family provision dispute. The barrister represented herself in a successful fee recovery proceeding and sought legal costs in acting for herself. The case ended up in the High Court. (Kiefel CJ, Bell, Keane and Gordon JJ, with Gageler and Edelman JJ each providing separate judgments. Nettle J dissenting on this point.)

The High Court majority held that the old English exception, allowing self-represented solicitors to recover their legal fees when other self-represented litigants could not, was not part of the common law in Australia. This exception was commonly known as the Chorley exception after the 1884 case of London Scottish Benefit Society v Chorley where a self-represented solicitor was permitted to recover his costs.

The majority noted costs are awarded by way of indemnity (or partial indemnity) for professional legal costs actually incurred in the conduct of litigation, not as a comprehensive compensation for loss suffered by a litigant.

They confirmed that inhouse lawyers in government and corporations could still recover costs when representing their employers, because they were outside the general rule that self-represented litigants could not recover their costs.

Importantly, the plurality expressed the view that self-represented solicitors lacking the impartial and independent advice the court expects its officers to give litigants may also lack objectivity given their self-interest as named parties. They went on to comment that modern orthodoxy finds as a matter of professional ethics that it is undesirable for solicitors to act for themselves.

Birketu Pty Ltd v Atanaskovic [2025] HCA 2

The Majority of the High Court in Birketu Pty Ltd v Atanaskovic overturned the previous leading case of United Petroleum Australia Pty Ltd v Herbert Smith Freehills [2020] VSCA 15 and found that unincorporated legal firms could recover costs incurred for the work of their employed solicitors when representing themselves in litigation. They acknowledged that the Chorley exception does not apply in Australia as decided in Bell v Pentelow and that partners of self-represented law firms could not recover the costs of their own work. They also noted that the "in-house solicitor rule" was an exception to the general rule and that it applied to unincorporated legal practices in the same way it applies to other litigants who employ in-house solicitors.

Weigh up the benefits of obtaining independent legal representation including:

1. Unbiased and impartial advice at a time when your emotions may be running higher than usual.
2. Time saved for partners in supervising staff running the matter.
3. Likely less conflict (easier) recovering costs if a costs order is obtained.

1. Document why self-representation is appropriate in this matter.
2. Record in the opening memo that partners acting in the matter cannot recover their professional fees.
3. Appropriately supervise any work allocated to employee solicitors even if those costs cannot be recovered.
4. Review current case law on claims for employee solicitor costs for self-represented law firms before preparing a cost claim.