When Lawyers Act for Themselves: Lessons from Birketu Pty Ltd v Atanaskovic
Home › Case Studies › Case Law Library › Commercial & Business Cases › Civil Procedure & Evidence › Birketu Pty Ltd v Atanaskovic [2025] HCA 2 (5 February 2025)
Published: 19 November 2025 | Reviewed: 19 November 2025
(3-minute read)
Case Summary
This 2025 High Court decision clarifies a narrow but important question:
Can a law firm that represents itself recover costs for work performed by its employed solicitors?
The Court answered yes. The majority held that when an unincorporated law firm is a party to litigation and its employed solicitors perform professional legal work, that work represents a cost actually incurred by the firm, falling within the ordinary indemnity principle.
The key sentence encapsulating the reasoning is:
“An order for costs in favour of an unincorporated law firm entitles the firm to obtain recompense for legal work performed by an employed solicitor of the firm.”
The majority explained that the common law principle is that costs indemnify a litigant for professional legal costs actually incurred. Salaries and overheads connected to employed solicitors fit within that category because they reflect genuine expenditure incurred in conducting litigation.
The Court also emphasised equality before the law: the abolition of the Chorley exception (which had allowed lawyers acting for themselves to recover their own time) did not justify creating a new disadvantage that would prevent law firms from recovering costs of work done by their staff.
A strong minority disagreed, warning that allowing firms to recover employed-solicitor time when they represent themselves risks reintroducing the Chorley exception through the back door. But the majority’s view prevailed.
The appeal was dismissed with costs.
Why It Still Matters
Although the case deals with technical costs principles, it highlights a structural challenge that arises across many legal disputes:
Who is actually representing whom?
And what happens when the lines blur?
In Birketu, the firm was both the litigant and its own legal representative. The Court accepted this unusual dual role because the law had to determine where the indemnity principle ends and begins. But this kind of structural overlap also exposes the risk of:
unclear accountability,
competing interests within the same entity,
diminished professional detachment, and
decisions being made without an independent check.
The Court noted longstanding concerns about the loss of objectivity when lawyers conduct their own matters. That observation applies more broadly: when roles collapse into each other, independent oversight becomes thin, and the client experience shifts from transparent to opaque.
The decision sits within a wider system where litigants, especially businesses, shareholders, and people facing complex disputes, can be exposed to invisible risks whenever the professional architecture around them is not clearly separated or supervised.
How to Avoid the Same Trap:
Independence & Fair-Process Safeguards
The core risk exposed by Birketu is the erosion of independent professional roles. When the same entity is both client and lawyer, professional detachment becomes fragile. While the High Court ultimately permitted cost recovery for employed solicitors, the broader lesson is the systemic risk created when representation and oversight are concentrated in one place.
Clean Law’s independence safeguards are designed to avoid that collapse of roles. These include:
a structural separation between the lawyer who holds responsibility for process fairness and the practitioners who conduct the substantive work;
audited trust accounts under Law Society requirements;
transparency through ACNC-governed reporting;
and no referral fees or profit-sharing, ensuring loyalty is not diluted by hidden financial ties.
These safeguards create a visible system of accountability, one that prevents the kind of role-confusion pressures and self-representation distortions highlighted throughout the judgment.
Clients reading Birketu often ask how Clean Law’s governance model ensures clear lines of responsibility and avoids the conflict risks that courts repeatedly identify. Our detailed explainer sets out those safeguards step by step.
Learn more → Independence & Safeguards Framework
Birketu is a reminder that even where the law permits a structure, it may still carry practical risks for fairness, clarity and accountability. Independent oversight serves as a stabilising force, ensuring that representation remains transparent, roles remain distinct, and procedural decisions are anchored in professional distance.
If your dispute involves intertwined relationships, cost pressures, or questions about who is genuinely acting for whom, a confidential conversation can help map a safer, more structured path.
Book a confidential discussion → Secure a Private Consultation
By Nicky Wang
Principal Solicitor
Legal Liaison Ltd (trading as Clean Law)
Prepared in accordance with public-interest governance,
annual Law Society trust-account audits, and ACNC-reported standards.
Disclaimer: This page is intended to provide general information only and is not legal advice. The contents may not reflect the most current legal developments and do not take into account your individual circumstances. You should not act or refrain from acting on the basis of this information without obtaining legal advice tailored to your situation.
