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The recent decision in Mazur & another v Charles Russell Speechlys has raised important questions about how law firms must approach litigation work. In this article, we consider the impact and outline how firms can ensure they remain compliant.
Background
As is likely well-known, the underlying case arose from a debt recovery action by Charles Russell Speechlys LLP (CRS) against their former client, Mrs Mazur, for non-payment of their legal fees totalling approximately £55,000. CRS instructed Goldsmith Bowers Solicitors (GBS) to conduct the recovery action. Mr Middleton, a non-qualified fee earner at GBS, handled the debt matter, carrying out the majority of steps in the claim. It was Mr Middleton's involvement that Mrs Mazur subsequently challenged, and which has given rise to the ensuing debate.
Conduct of litigation: What is it?
The Legal Services Act 2007 provides a statutory definition of "conduct of litigation", which includes:
- (a) The issuing of proceedings before any court in England and Wales.
- (b) The commencement, prosecution, and defence of such proceedings; and
- (c) The performance of any ancillary function in relation to such proceedings.
The definition does not apply to the Employment Tribunal, Employment Appeal Tribunal, The Solicitors Disciplinary Tribunal, or other similar regulatory tribunals.
Conduct of litigation has a narrow interpretation. Activities that take place prior to issue of proceedings and which do not involve any contact with the court are not a reserved activity.
Therefore, activities such as advising on the merits of a claim, drafting Particulars of Claim, instructing counsel, pre-action correspondence or other steps taken with the intention of settling a claim before proceedings are issued, are not classed as "conduct of litigation".
It is worthwhile noting too that the administrative tasks of arranging for documents to arrive at the court, be it physically or electronically, are also not classed as conduct of litigation.
It is also worthwhile noting that the administrative task of arranging for documents to arrive at the court, be it physically or electronically, are not classed as conduct of litigation
Conduct of litigation: Who can do it?
The first question to be answered is what is the given individual authorised to do? The fact that a person is an employee of a regulated firm does not itself authorise them to conduct litigation. Equally, simply acting under the supervision of an authorised person does not permit a person to conduct litigation. There is now a distinction between "acting under the supervision" of an authorised person and "assisting or supporting" an authorised person.
So, who is an authorised person who can conduct litigation? The simple answer is solicitors who are on the roll and hold a practising certificate granted by the Solicitors Regulation Authority (with no restrictions).
The good news, however, is that much of the work involved in litigation can nevertheless be carried out by non-authorised staff, either because it does not amount to conduct of litigation or it falls within their role of "assisting or supporting" an authorised person. Law Society guidance states that "assisting or supporting" an authorised person can include drafting pleadings, applications and correspondence, drafting statements and signing a statement of truth.
Assumed responsibility
The difference between "acting under the supervision of" and "assisting or supporting" an authorised person depends on whether the authorised person has "assumed responsibility" for the task and exercised their "professional judgment" in respect of it.
This is not about rubber-stamping. "Tick-box" oversight from an authorised person will not be sufficient. The authorised person will need to be able to show that they have signed off the approach in the pleadings, not just signed off the document itself without applying their mind to the contents. Documentation and record-keeping will be crucial.
Practical steps for compliance
1. Review policies and procedures
Ensure that the steps involved in the litigation process are documented, and detail who can undertake which steps. Prepare a list of restricted activities and make sure you know who in your firm is an authorised person.
2. Ensure proper involvement in each matter
Make sure that an authorised person with the requisite technical skills and knowledge is involved and takes responsibility by applying their professional judgment to the key elements.
3. Delegate appropriately
Tasks can be delegated, and this can be specific or general (with non-authorised staff working to guides or protocols) provided that an authorised person is responsible for each matter. Ensure that work is actively supervised in line with wider regulatory obligations and key decisions and formal steps in the proceedings are escalated to the authorised person who then exercises their professional judgment in relation to them.
4. Document decision-making
Ensure that key formal trigger points, which amount to the conduct of litigation are the responsibility of the authorised person and and the decision-making is documented on the file to demonstrate the professional judgment applied to these steps.
5. Train and communicate
Make sure your staff know who can do what. Train all staff involved in litigation processes and the policies and procedures to be followed, the reasons for them, and implement suitable supervision and review processes to ensure that the policies and procedures are being followed in practice.
The stakes
The consequences for non-compliance are serious.
It is a criminal offence under the LSA 2007 to undertake Conduct of Litigation if you are not entitled to do so, or to do so through an employee or manager who is not themselves entitled to do so. This could result in imprisonment, a fine or both.
It may also amount to contempt of court and may result in disciplinary action as a result of breaching regulatory obligations.
Turning to the practical consequences, your opponent may likely challenge costs for conduct of litigation work done by non-authorised persons (potentially resulting in large shortfalls in recovery).
Furthermore, there is an increased risk of challenges coming from litigants in person, who may be more likely to scrutinise costs claims and raise objections regarding the authorisation of those conducting litigation.
Conclusion
Compliance requires authorised persons to take genuine professional responsibility for formal steps in the litigation process. With clear policies, proper training, effective supervision, and robust documentation, firms can meet their regulatory obligations whilst continuing to deliver efficient litigation services.
With clear policies, proper training, effective supervision and robust documentation, firms can meet their regulatory obligations whilst continuing to deliver efficient litigation services.
Despite the initial shock, the Mazur judgment has not so much changed the legal landscape (as the rules have always been in place), but they are now in the spotlight.
Mazur provides clarity - firms that implement proper procedures now will be well-positioned to confidently navigate this new landscape.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
