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Regional criminal lawyer fights former firm on restraint clause
A regional criminal lawyer was forced to defend a decision to open his new practice within a minute’s walk of his former firm.
Naomi Neilson
Wodonga-based solicitor Chirag Patel said 20 of his clients were at risk of losing representation when KPW Law unsuccessfully sought an injunction in the NSW Supreme Court to prevent him from practising within a 50-kilometre radius of his previous workplace.
Since ending his employment with KPW Law in May, Mr Patel has worked at his firm CP Law on Hovell St in Wodonga’s centre, about 100 metres from his former workplace on Sesame Lane. Both firms are within walking distance of the Wodonga Magistrates’ Court.
If the injunction was granted, Mr Patel said his clients — some who were either already in custody or were facing the prospects of a custodial sentence — would have been left without help due to the “shortage of criminal defence lawyers” in the Wodonga region.
Justice Mark Richmond agreed there was a risk the clients “will be unable to find a replacement criminal lawyer of equal standing”.
Mr Patel worked at KPW Law from January 2021 to May 2023 but began the process of opening his own practice by March after he and principal solicitor Kathryn Hall were unable to reach an agreement about his request to be promoted to salaried director.
In an email to Mr Patel following his notice of resignation, Ms Hall said KPW Law would not be prepared to waive a restraint clause that restricted him from practising in a rival workplace within the 50-kilometre radius for a period of two years.
In response, Mr Patel said he did not intend to solicit clients from KPW Law and it was “unenforceable as an unreasonable restraint of trade” and “unreasonable for KPW to withhold its consent”.
Mr Patel offered KPW Law an undertaking that for six months from his resignation he would “not approach, induce, solicit, or persuade or accept any approach from any client” of the law firm.
He submitted to the court that he had already done so on two occasions when he was contacted by a police custody officer who had been seeking assistance about his former clients. Mr Patel explained that he told the officer he could not act for them.
Justice Richmond said KPW Law’s “only interest’ is its goodwill and its entitlement to protect itself “against the possibility of loss which may otherwise arise from the mere existence of personal relations between its customers and its former employees”.
He accepted KPW Law’s submission that Mr Patel has a “strong connection with clients” he dealt with during his employment.
“However there is real issue as to whether an area of restraint of this kind … goes further than reasonably necessary for the legitimate protection of that interest,” Justice Richmond said.
Justice Richmond added the “most important factor” was the undertaking Mr Patel made to KPW Law that he would not solicit clients from the firm and made an order that prohibits Mr Patel from doing so for a period of six months from his termination.
“When all matters are weighed, I conclude that the prejudice suffered by KPW Law if it is ultimately determined that an interlocutory injunction should have been granted is outweighed by the prejudice which Mr Patel will suffer if an interlocutory judgement is wrongly granted,” Justice Richmond said.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
