It is difficult for clients to judge whether lawyers have been negligent in their work. Even if the client loses what appears to be an "open and shut case", that is not sufficient indication that the lawyer has been at fault. A lawyer has to be negligent, i.e. to be lacking such professional skill and knowledge as they ought to possess, or failing to exercise such professional care as they ought to exercise, before the client has a legal remedy. In addition, to sue a lawyer for negligence the client must show that a financial loss has been suffered as a result of that negligence.

Some common examples of negligence include excessive delays which result in a client losing their legal right; for example, the failure to issue court proceedings within the required time limits. Another example of negligence is the failure to take certain precautions that are commonly taken by lawyers. For example, in handling a conveyancing matter the lawyer may not have made the necessary enquiries about the property which the client wishes to buy. As a result, the client only discovers after the purchase that the land cannot be used in the way that it was originally intended. Actions that may be considered to be negligent will vary from case to case and no firm guidelines can be given here.

Even if a lawyer has been found guilty of unsatisfactory conduct, misconduct or a disciplinary offence, it does not necessarily mean that the lawyer can be successfully sued for negligence. Negligence or breach of contract does not of itself constitute misconduct.

Negligence claims in excess of $25,000 must be pursued through the courts. Claims for less than this amount may be determined by the VCAT or the courts if the attempts to settle by the Commissioner or mediation are unsuccessful. Any person making a negligence claim against a lawyer may apply to the VCAT for compensation, using the disputes procedure described above. The VCAT can only award a maximum of $25,000 compensation.

The courts may award damages to a client who has suffered monetary or other loss as a result of the lawyer's negligence. All claims of negligence, not just "gross" negligence, may be taken to the courts. It is compulsory for most lawyers to be insured for claims of negligence.

There is an important exception to the liability of lawyers to negligence claims. In 1988, the High Court determined that a solicitor or barrister would not be liable for negligence in relation to the conduct of a case in court: Giannarelli & Shulkes v Wraith (1988) 165 CLR 543. This immunity is particularly significant for barristers, whose work consists primarily of "in court" work. A High Court decision in D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12 has not altered this long standing position in Australia. However, the position is less clear if the alleged negligence arises from work done by a barrister outside the court.

A person with a complaint about possibly negligent conduct by a solicitor or barrister should seek advice from a solicitor (preferably a specialist), a community legal centre, or the Commissioner about what course of action to follow. The Commissioner may not deal with a complaint about negligent conduct if that conduct is already the subject of legal proceedings. (See: "Advice and assistance", below for contact details.)