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[2003] QSC 327
plaintiff. Declarations (a), (b) and (d) granted: the Council's ruling is a rule or by-law requiring Governor in Council approval and, having no such approval, is invalid and of no legal effect; the question...
The Queensland Law Society Council issued a binding-seeming ruling capping fees in 'no win, no fee' personal injury work. The Supreme Court held the ruling was legally a rule or by-law requiring Governor in Council approval under the Society's Act. Because that approval was not obtained, the ruling is invalid and has no legal effect; solicitors are not legally obliged to comply. The court granted declaratory relief to the applicants (Helman J) (paras 11, 14).
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1,764 words · generated 07/07/2026
The Council of the Queensland Law Society promulgated a ruling, titled "Cap on Professional Fees in 'No Win, No Fee'/Speculative Personal Injury Claims", to take effect on 22 August 2002 (para 3). The ruling purported to direct practitioners that, in personal injury claims conducted on a speculative or 'no win, no fee' basis, a solicitor's professional fees must be reduced so that they do not exceed the amount ultimately paid to the client after statutory refunds, disbursements and the solicitor's fees are deducted; the ruling also stated that failure to comply "may render a practitioner liable to prosecution for professional misconduct or unprofessional conduct" (para 3).
No linked legislation citations have been extracted yet.
The applicants, Gregory Ian Holland and Mark Andrew Holland trading as Holland & Holland Solicitors, practised in the directly affected area and brought an application seeking four declarations: that the ruling is not a rule or by-law under the Queensland Law Society Act 1952; that there is no legal obligation on solicitors to comply with it; that failure to comply, without more, does not constitute professional or unprofessional misconduct; and that the ruling has no legal effect (para 1). The respondents (the Queensland Law Society and its Council) did not file material opposing the applicants' substantive submissions at the hearing (para 4).
The court heard full argument on standing and substantive validity. Helman J concluded the applicants had standing (para 5), characterised the ruling as a rule or by-law requiring Governor in Council approval under s 5A(2) of the Act, found that no approval had been obtained, and declared the ruling invalid and of no legal effect. Consequently the court granted declarations (a), (b) and (d); the question raised by (c) (misconduct) was left undecided as hypothetical (paras 11, 14).
Three principal strands of reasoning led to the decision.
Character of the instrument: The judge examined the content and character of the Council's ruling and concluded it was not mere advice or commentary. The ruling was framed to "direct practitioners"; it contained mandatory language and expressly contemplated sanctions for non-compliance (possible prosecution for professional misconduct) (para 11). The court applied a conventional description of the act of legislating as "the creation and promulgation of a general rule of conduct without reference to particular cases" to conclude that the impugned instrument had the coercive, general and regulatory character of delegated legislation (para 11).
Statutory scheme and prescribed procedure: The Queensland Law Society Act provides expressly that the Council "may make rules" for the regulation of members and that "a rule or by-law is subordinate legislation, and must be approved by the Governor in Council" (s 5A(1) and (2), cited at para 8). Given the instrument's character as a rule or by-law, it fell squarely within the statutory requirement for approval. Because no such approval had been obtained, the instrument could not operate as a binding rule (para 11).
Limits upon the Society's power: The judge emphasised that the Society's corporate powers are "subject to any restrictions by this Act expressed or implied" (s 4(5) cited at para 6). The impugned ruling attempted to regulate the maximum payment for solicitors' services in a class of work and thus to affect the statutory fee regime in s 48I, which prescribes the mechanism for maximum fees recoverable from clients (para 10). The Council could not, by internal ruling, amend or displace that statutory scheme (para 11).
Because of these points, the ruling lacked required approval and was legally ineffective; consequently there was no legal obligation on solicitors to comply (para 14). The court therefore granted the declarations sought, except for the misconduct question which was unnecessary to decide (para 14).
Before this decision, the Society routinely issued guidance and rulings in various forms, and the Solicitors Handbook contained numerous instruments of professional guidance that, in practice, informed professional discipline assessments (para 12). The respondents argued that some Council directives operate as "other directives" distinct from formal rules or by-laws and that such directives could be binding in appropriate contexts (para 12). That argument was not advanced before the court and appears to have been abandoned (para 12).
After Helman J's decision, the legal clarity is that where a Council instrument exhibits the hallmarks of a rule or by-law, generality, coercive phrasing, and sanctions, it constitutes subordinate legislation under s 5A and is subject to the statutory approval mechanism. Without Governor in Council approval the instrument is invalid and cannot legally bind members. The case thus confirms statutory limits on the Society's regulatory powers, and reinforces that internal professional instruments cannot, by their wording, override or amend statutory provisions such as s 48I concerning fees (paras 8, 10, 11, 14).
"I conclude that they do have standing to pursue this application." (para 5). Plain English: The applicants, being solicitors who work in the area affected by the ruling and having a professional and financial interest, are able to bring the challenge in court.
"There is no doubt that the ruling is a rule or by-law." (para 11). Plain English: The Court found the QLS instrument to be a formal regulatory rule rather than mere guidance or advice.
"The act of legislating may conveniently be defined as the creation and promulgation of a general rule of conduct without reference to particular cases." (para 11). Plain English: The Court used a standard definition of what counts as making law, to show the ruling is legislative in character.
"...a rule or by-law is subordinate legislation, and must be approved by the Governor in Council." (para 8, citing s 5A(2)). Plain English: The statute says formal Society rules require government approval to be legally valid.
"It follows that a case has been made out for making declarations (a), (b), and (d)." (para 14). Plain English: The court ordered that the ruling is not a valid rule, does not bind solicitors, and is legally ineffective.
This decision is triggered where an internal professional body issues an instrument that:
In those circumstances, the administrative form and content of the instrument must be tested against the enabling statute: if it is a rule/by-law for the regulation of members, the statutory approval mechanism applies and the instrument will be invalid unless approved (paras 8, 11).
This judgment itself relies on established principles about standing and the nature of delegated legislation, applying authorities such as Boyce v Paddington Borough Council, Australian Conservation Foundation v The Commonwealth, Onus v Alcoa, Shop Distributive, and Bateman's Bay in support of standing (para 5). It also relies upon statutory construction principles about the content and limits of corporate powers (paras 6, 11).
Because the court's dispositive reasoning is directly founded on the statutory text (s 5A and s 48I) and the instrument's character, later courts assessing similar questions will consider: (a) the formal statutory regime for making rules/by-laws; (b) whether the instrument's form and substance amount to subordinate legislation; and (c) whether any required external approval was obtained. Practitioners advising professional bodies or members should therefore expect courts to insist on compliance with statutory procedures before treating a professional body's instrument as legally binding.
Note: The judgment itself does not catalogue subsequent appellate treatment or citations; practitioners should check later Queensland and appellate decisions for confirmation or variation of these points in different statutory contexts.
'Other directives' vs formal rules: The respondents alluded to a class of Council directives in the Solicitors Handbook that do not possess formal status as rules/by-laws but may nonetheless inform disciplinary assessments (para 12). The judge noted this argument was not pressed and appears to have been abandoned (para 12). The precise line between non-binding guidance and a binding rule in contexts where statutory authorisations exist remains fact-sensitive. Future litigation could test when guidance crosses the threshold into subordinate legislation, particularly where the instrument lacks express sanction but has practical coercive effects.
Remedies and retrospective effect: Helman J granted declaratory relief that the ruling had no legal effect (para 14). The judgment does not explore potential consequences for disciplinary actions taken in reliance on the impugned ruling prior to the declaration, nor does it address potential restitution or costs consequences of any bills adjusted under the ruling. Those practical consequences may require further litigation.
Interaction with professional disciplinary standards: The court declined to decide whether non-compliance with the ruling would, without more, constitute misconduct (para 14). There remains an open question whether, independent of any invalid ruling, certain fee arrangements could be sanctioned under pre-existing disciplinary rules or statute; the present decision does not foreclose disciplinary action founded on independent and valid professional conduct rules.
Scope of 'maximum payment' in s 48I: The judge treated the ruling as attempting to alter the statutory regime for maximum fees (paras 10–11). There may be unresolved interpretative issues about the breadth of s 48I and the extent to which professional bodies can meaningfully regulate fees within the statutory formula, so long as they do not purport to override the statutory mechanism itself.
Procedural irregularities and necessary parties: The judge observed that the members of the Council (second respondent's members) arguably should have been joined but the point was not pressed (para 13). While the defect was curable and not fatal here, questions may arise in other proceedings about when such joinder is necessary to grant effective relief.
Concluding practical note: where a professional body intends to promulgate binding rules affecting members' legal rights or obligations, it must carefully check the enabling statute for any required external approvals and for limits on the scope of permissible regulation. Instruments that purport to create general obligations and contemplate sanctions are likely to be characterised as subordinate legislation and subjected to formal approval requirements. Helman J's decision is a reminder that substance, not mere form, determines whether an instrument is legislative in character (paras 11, 14).
[1] The applicants, solicitors practising in Brisbane, seek four declarations concerning a ruling of the second respondent entitled `Cap on Professional Fees in "No Win, No Fee" Speculative Personal Injury Claims' which was to take effect from
(a) That the ruling does not operate as a rule or by-law under the provisions of the Queensland Law Society Act 1952;
(b) That there is no legal obligation upon solicitors to comply with the ruling;
(c) That a failure by a solicitor to comply with the ruling, without more, does not constitute professional misconduct; and
At the hearing the applicants sought to add, without objection, the words `or unprofessional conduct' after the word `misconduct' in (c).
[2] The first respondent advised members of the ruling on 3 September 2002 in an email called a `Managing Partner mail out'. The email contained seven notices, the first being a message `from QLS President Tom Sullivan - review of QLS's regulatory function'. Paragraph 6 of that notice was as follows:
6. The QLS has introduced a new ruling, effective from 22 August, prohibiting any solicitor, when acting on a `no win no fee' or speculative basis in personal injury matters, from charging a fee of more than half the nett award received by their client
http//www.qls.com.au/mailout/m-frame-nowinnofees.htm. In effect, if the matter incurs professional fees much greater than the limit imposed by the new rule, the solicitor cannot claim more than the client takes home. Of course, every solicitor involved in such a case must have a signed client agreement before they can act, and the agreement must include a fair and reasonable fee.
[3] The ruling, as it was promulgated on the first respondent's website, was as follows:
Council Ruling - Cap on Professional Fees in "No Win, No Fee"/Speculative Personal Injury Claims
The Council has formulated the following Ruling to direct practitioners and assist clients in personal injury claims conducted on a speculative or `no win, no fee' basis. A failure of compliance may render a practitioner liable to prosecution for professional misconduct or unprofessional conduct.
1.1 In any claim for damages for personal injuries in `no win, no fee' speculative personal injury claims, a solicitor (or firm) is entitled to charge reasonable professional fees pursuant to a written client agreement with the client.
If the solicitor's reasonable professional fees pursuant to the client agreement would exceed the amount ultimately receivable by the client, after the following deductions from the judgment or settlement monies:-
(b) all disbursements incurred in the provision of the claim
(c) the solicitor's professional fees (including GST)
then the solicitor shall reduce his fees in 1.1(c), so that those fees shall not exceed the amount ultimately paid to the client.
If the settlement sum is $10,000 and the total of the expenses in 1.1(a) and (b) above are $8,000 the solicitor shall not charge any more than $1,000 in 1.1(c).
If the settlement sum is $10,000 and the total of expenses in 1.1(a) and (b) above exceed that amount, the solicitor shall not charge anything for professional fees.
1.2 A solicitor of firm may in special circumstances apply to the Council of the Queensland Law Society for leave to raise a bill exceeding the amount permitted under this Ruling.
2. If an application is made pursuant to Paragraph 1.2, then the Society has the right to call upon the solicitor to present for inspection:-
(a) any client agreement and/or statement of account between the solicitor and his client
(c) any memos, notes or correspondence bearing in whole or in part upon the issue of costs in any claim for damages for personal injury conducted by the solicitor on a "no win, no fee" basis
3. When a solicitor receives instructions to settle a claim for damages for personal injuries, before he acts on those instructions he is obliged to inform his client of the minimum nett amount the client will receive from that settlement
4. This Ruling applies immediately and in respect of any settlement or judgment which occurs from 22 August 2002.
* Legal Aid has not been available for personal injury claims for many years
* Many solicitors now fund litigation for impecunious people who have good claims which would not otherwise be maintained. This is an important public service
* Most solicitors provide this service on a `no win, no fee' basis
* The Ruling is designed to ensure there is no potential for conflict of interest in duty
For further inquiries in respect of this Ruling, please contact Bernie O'Donnell, Deputy Secretary [Ph No: (07) 3842 5918] or Nick Masinello, Acting Director, Professional Standards Department [Ph No: (07) 3842 5939].
[4] At the hearing of the application, full submissions were made by Mr Davis on behalf of the applicants, and, on behalf of the respondents, Mr Shaw told me that his clients, while not consenting to the relief sought, were `not going to offer any material or submissions opposing the applicants' submissions'.
[5] Late last year a dispute arose between the applicants and the respondents concerning the application of the ruling to a bill rendered by the applicants. Mr Davis properly raised the question whether his clients have the requisite standing to pursue this application since that dispute was resolved in June this year. He submitted that his clients do have standing as they have a special interest in the class of work to which the ruling applies. They practise in an area of the law directly affected by the ruling, and it will have an impact upon the fees they may charge for work in small personal injuries claims. Their interest is then professional and pecuniary, so that, applying the principles explained in Boyce v. Paddington Borough Council [1903] 1 Ch 109, Australian Conservation Foundation v. The Commonwealth (1980) 146 C.L.R. 493, Onus v. Alcoa of Australia Ltd [1981] HCA 50; (1981) 149 C.L.R. 27, Shop Distributive and Allied Employees Association v. Minister for Industrial Affairs (S.A.) (1995) 183 C.L.R. 552, Bateman's Bay Local Aboriginal Council v. The Aboriginal Community Benefit Fund Pty Ltd [1998] HCA 49; (1998) 194 C.L.R. 247, I conclude that they do have standing to pursue this application.
[6] Part 2 of the Queensland Law Society Act relates to the respondents. Section 4(1) provides that the first respondent is a body corporate and s. 4(3) that it is to have perpetual succession and may sue and be sued. Section 4(5) provides:
(5) Subject to any restrictions by this Act expressed or implied, the society shall also be capable in law of doing all such other things as it may deem expedient for effectuating its objects.
[7] Section 5(1) provides for the second respondent `[f]or the good government of the society'. Section 5(6) provides for the management of the first respondent by the second respondent:
(6) Subject to the provisions of this Act, the council shall have the sole management of the society and of the affairs and concerns and the income and property thereof for the purposes and benefit of the society, and may exercise all powers vested in the society and do all such acts and things as are hereby directed or authorised to be done by the society.
[8] Section 5A, so far as it is relevant, provides:
(1) The council may make rules for the following purposes -
(b) for the regulation and good government of the society and of the members and affairs thereof;
(i) to provide for additions to an alterations of the rules of the society;
(j) to empower the council to make by-laws of the society for any purpose with respect to which the society is authorised to make rules;
(l) generally, to carry the objects of the society into full and complete effect.
(2) A rule or by-law is subordinate legislation, and must be approved by the Governor in Council.
(b) There is no approval by the Governor in Council; therefore
(d) The ruling is inconsistent with s. 48I of the Act which prescribes the maximum amount of fees and costs that a practitioner may charge and recover.
[10] Section 48I provides for the maximum sum a practitioner or firm may charge and recover from a client as fees and costs for work done. So far as it is relevant, it provides:
(1) The maximum amount of fees and costs a practitioner or firm may charge and recover from a client for work done is -
(a) an amount calculated in accordance with the client agreement between the practitioner or firm and the client for the work; or
(b) if there is no client agreement and there is a scale for the work provided under an Act - an amount calculated in accordance with the scale; or
(c) if there is no client agreement and there is no scale for the work provided under an Act - an amount assessed as a reasonable amount for the work by a tribunal costs assessor.
[11] There is no doubt that the ruling is a rule or by-law. The preamble to it on the first respondent's website refers to the formulation of the ruling to `direct' practitioners and to the sanction of possible prosecution for failure to comply with it.
Mr Sullivan, in his message, referred to the ruling as `prohibiting' any solicitor from charging a fee otherwise than in accordance with the ruling. The ruling then went beyond the category of suggestion, recommendation, or advice, and took on, and was intended to take on, the coercive character of delegated, or subordinate, legislation. (`The act of legislating may conveniently be defined as the creation and promulgation of a general rule of conduct without reference to particular cases': D.C. Pearce and R.S. Geddes, Statutory Interpretation in Australia, 5th ed., 2001, para 1.2, p.1.) It was intended to be a rule, in the words of s. 5A(1)(b), `for the regulation ... of the members and affairs thereof'. It follows that the ruling required the approval of the Governor in Council and, since it has not had that approval, it has no legal effect. The ruling was intended to regulate, for a certain class of work, the maximum payment for solicitors' services and so was intended to amend s. 48I for that class of work. The first respondent clearly had no power to amend the Act and its power is restricted by the reservation in s. 4(5).
[12] There are two further matters to which I should refer. The first arises from an outline of argument concerning the validity of the ruling prepared on behalf of the first respondent and sent to the applicants before a proposed meeting between the applicants and representatives of the respondents that was to take place on
15 April 2003. The argument was in essence that the ruling fell into a class of `other directives' - i.e., other than rules or by-laws - `howsoever styled, for the advancement of the objects of the Society'. `The Solicitors Handbook', the argument continued, `contains a significant number of rulings on a wide range of subjects of professional import, none of which possess the formal status of a rule or a by-law, but which are relevant to the determination of whether or not particular conduct is misconduct in the particular circumstances'. Power to give such directives was, it was argued, ultimately derived from s. 4(5) in providing that the first respondent should be capable in law of doing all such other things as it might deem expedient `for effectuating its objects'. Among those objects was that provided for by rule 2(5) of the Rules of the Queensland Law Society Incorporated approved by the Governor in Council on 25 June 1987 (Qld Gov. Gaz.,
27 June 1987, No. 82, pp. 2079-2122): `To take such action as may be necessary to suppress dishonourable, improper, or unprofessional conduct or practices on the part of practitioners.' An obvious response to that argument is that it overlooks the effect of the restriction on the first respondent's power provided for in the first words of
s. 4(5), `Subject to any restrictions by this Act expressed or implied', the effect of which would be to require a valid rule or by-law if a directive is to be binding on members in the way contemplated by the respondents, i.e., not as a suggestion or recommendation, or as advice, but as a general rule of conduct without reference to particular cases. That response was made to the first respondent in a letter to it dated 8 April 2003 from the applicants. But in any event, as there was no argument advanced before me on behalf of the respondents, I assume the argument recorded in the outline has been abandoned.
[13] Secondly, although the first respondent is a corporation the second is not, and it would appear to me that the members of the second respondent should have been joined, but as no objection was taken on their behalf in reliance on that irregularity I shall not pursue it further. In any event in the circumstances it is a defect in the proceeding capable of cure, if necessary: see Healey v. Ballarat East Bowling Club [1961] VicRp 32; [1961] V.R. 206. I say `if necessary' because it may be that the members of the second respondent were, strictly speaking, unnecessary parties.
[14] It follows that a case has been made out for making declarations (a), (b), and (d). Since the ruling has no legal effect the issue raised by declaration (c) becomes hypothetical, and there is no need to consider it further; and I should record that
Mr Davis did not press it. I shall invite the parties to make any further submissions on costs they wish to make.
Australian Conservation Foundation
The Commonwealth
(1980) 146 CLR 493
(1998) 194 CLR 247
(1981) 149 CLR 27
(1995) 183 CLR 552
Declarations (a), (b) and (d) granted: the Council's ruling is a rule or by-law requiring Governor in Council approval and, having no such approval, is invalid and of no legal effect; the question whether non-compliance amounts to misconduct was not decided; costs reserved for further submissions (paras 11, 14).