The Court of Appeal has ruled in favour of the Chartered Institute of Legal Executives (CILEX) in its appeal against Mazur v Charles Russell Speechlys, which limited the extent to which legal executives and paralegals can conduct litigation.
In a statement released following the ruling, CILEX chief executive Jennifer Coupland said it was “the most consequential judgment for legal services in recent history”.
“It is a victory for CILEX members but also for access to justice, the interests of consumers and the encouragement of a thriving, diverse and competitive legal sector,” she added.
The Solicitors Regulation Authority (SRA) and Law Society of England and Wales, who had opposed the appeal, accepted the judgment and welcomed the clarity it provided.
“We welcome the clear direction from the Court of Appeal, which in summary concludes that an unauthorised person can lawfully conduct litigation if they do so under the appropriate supervision of an authorised individual,” the SRA said.
Law Society president Brett Dixon said the judgment provides an outline framework for those involved in litigation to use in assessing whether supervision is adequate and lawful. “The judgment confirms the continuing importance of supervision being in place which will require further regulatory guidance,” he added.
Both organisations said they will review and update the guidance they provide to members.
The case concerned a claim for unpaid fees brought by Charles Russell Speechlys LLP (CRS) against the firm’s clients, Julia Mazur and Jerome Stewart. After engaging CRS to carry out legal work, Mazur and Stewart refused to pay fees of over £50,000. CRS engaged Goldsmith Bowers Solicitors (GBS) to recover the fees, and a claim was issued by GBS using the Money Claims Online IT system.
The claim was signed by Peter Middleton, a former solicitor who had been suspended from practice and did not hold a practising certificate. Mazur and Stewart made an application to the court on the basis that Mr Middleton was unlawfully conducting litigation, a reserved legal activity, with the district judge agreeing that if Mr Middleton had issued proceedings against Mazur and Stewart, “they are in my view a nullity and should be struck out”.
The resulting legal arguments centred on the proper meaning of the words “carry on the conduct of litigation” as stated in the Legal Services Act 2007. “This case is, at its foundation, an exercise of statutory construction,” Sir Colin Birss noted in the Court of Appeal’s judgment.
“The question is whether people working in a law firm or a law centre, who are not themselves authorised individuals under the 2007 Act (unauthorised persons), are carrying on the conduct of litigation if they do so under the supervision of an authorised individual.”
Before the introduction of the 2007 Act there had been “a widespread, general and well-regulated practice of delegation by solicitors to unqualified individuals,” Sir Colin noted.
“This practice of delegation did not absolve solicitors of their professional responsibilities for the performance of the person undertaking delegated duties. Nor did it undermine either the solicitors’ duties to their clients or their duties to the court.”
The intention of parliament must be taken to have understood that individual solicitors operated “a widespread and regulated practice of delegating work undertaken in the conduct of litigation to unqualified staff,” he continued.
“There is nothing in the words of the 2007 Act itself, nor in any statement in the preparatory material, which requires an authorised individual to undertake the acts constituting the conduct of litigation personally. Moreover, there is nothing to indicate that Parliament intended the 2007 Act to abolish or curtail the practice of solicitors delegating tasks amounting to the conduct of litigation to unqualified staff.
“This delegation involved and involves unqualified staff acting for and on behalf of an authorised principal, who retains responsibility for the work. The delegation is covered by the applicable regulatory guidance and requirements… To undermine the practice of delegation would run counter to further regulatory objectives express in the 2007 Act such as improving access to justice… protecting and promoting the interests of consumers… and encouraging an independent, strong, diverse and effective legal profession.”
Referring to the ordinary meaning of the words “conduct of litigation”, Sir Colin clarified these refer to the tasks to be undertaken, whilst the words “carry on” refer to the direction and control of, and the responsibility for, those tasks.
He continued: “An unauthorised person may lawfully perform any tasks, which are within the scope of the conduct of litigation, for and on behalf of an authorised individual such as a solicitor or appropriately authorised CILEX member, provided the authorised individual retains responsibility for the tasks delegated to the unauthorised person (both formal responsibility and the responsibilities identified at section 1(3) of the 2007 Act). In that situation, the authorised individual is the person carrying on the conduct of litigation.
“The delegation of tasks by the authorised individual to the unauthorised person requires proper direction, management supervision and control, the details of which are a matter for the regulators. The authorised individual must put in place appropriate arrangements. The degree of appropriate control and supervision will always depend on the circumstances.”
Referring to the decision of Mr Justice Sheldon handed down in September, Sir Colin said the judge had been wrong to distinguish between supporting or assisting an authorised solicitor in conducting litigation, and conducting litigation under the supervision of an authorised solicitor.
“The result of this case means that the role of an unauthorised person in the context of the conduct of litigation is not limited merely to assisting or supporting an authorised individual, and the distinction drawn in the court below by the Law Society and SRA, and adopted by the judge, between (a) supporting (or assisting) and (b) conducting litigation under supervision was not correct. It is not unlawful for an unauthorised person to act for and on behalf of an authorised individual so as to conduct litigation under their supervision, provided the authorised individual puts in place appropriate arrangements for the supervision of and delegation to the unauthorised person.”
Although it was not possible to provide a comprehensive list of tasks that fall within and outside the conduct of litigation, Sir Colin identified seven items from a list provided by the Law Society that were unlikely to fall within the statutory definition of ‘conduct of litigation’: pre-litigation work; giving legal advice in connection with court proceedings; conducting correspondence with the opposing party on behalf of clients; gathering evidence; instructing and liaising with experts and counsel; signing a statement of truth in respect of a case; and signing any other document that the CPR permits to be signed by a legal representative.
Allowing CILEX’s appeal, Sir Colin nevertheless acknowledged the result reached by the judge in September “was not surprising considering the arguments raised before him” by the SRA and Law Society, which he noted were “wrong and later abandoned”.
Agreeing with the decision, Lady Justice Andrews added:
“In essence, the question in any given set of circumstances will be whether the unauthorised person, in carrying out whatever tasks which fall within the scope of ‘conduct of litigation’ have been delegated to him or her, is in truth acting on behalf of the authorised individual. If they are, it is the authorised individual who is conducting the litigation. But if the reality is that the litigation is not being conducted by the unauthorised person for and on behalf of the authorised individual, they will be committing an offence.”
Sir Geoffrey Vos, Master of the Rolls, agreed with both judgments.
