Regulatory grey zones: Examining the role of non-qualified staff in conduct litigation post Mazur

Navigating the regulatory landscape

A recent High Court decision has brought uncertainty about the conduct of litigation and the work that may be undertaken by non-qualified staff under the supervision of qualified lawyers.

In the case of Mazur & Anor v Charles Russell Speechlys (Mazur), the court considered the role of non-qualified employees undertaking litigation work and provided important guidance on how law firms should be conducting this work in accordance with the Legal Services Act 2007 (LSA).

The decision impacts law firms that rely on non-qualified staff to run caseloads and also affects in-house legal teams with non-qualified team members, by impacting their working practices and potentially the recoverability of costs.

What the LSA says

Section 12 of the LSA provides that a ‘reserved activity’ includes the conduct of litigation. According to Schedule 4 of the LSA, ‘conduct of litigation’ includes issuing court proceedings in England and Wales, commencing, prosecuting and defending such proceedings, and “the performance of any ancillary functions in relation to such proceedings…”

• A person can only carry out a reserved legal activity if they’re an ‘authorised person’ or an exempt person in relation to that activity (section 13(2)). This includes:
  • Solicitors on the roll that hold a practising certificate
  • Costs lawyers
  • Chartered legal executives
  • Barristers
  • Patent and trademark attorneys.
• An authorised person is defined in section 18 of the LSA as someone who is authorised to carry out the relevant activity by a relevant approved regulator
• Sections 14 to 16 of the LSA make it clear that carrying out a reserved activity without authorisation or being exempt is a criminal offence. Both the employee and the employer may be liable and it could result in imprisonment and/or a fine. Non-authorised conduct of litigation may also amount to contempt of court if it misleads the court.

The facts in Mazur

In this case, Goldsmith Bowers Solicitors (GBS) were instructed by Charles Russell Speechleys to pursue a former client of theirs, Mrs Mazur, for a sizeable unpaid invoice. Mr Peter Middleton, the head of commercial litigation at GBS, had conduct of the litigation and was responsible for carrying out legal work, specifically signing claim documents to issue court proceedings against Mrs Mazur.

Mr Middleton was not a qualified solicitor and did not hold a practising certificate. He was therefore not considered to be an authorised person under the LSA for the purposes of conducting litigation.

Mrs Mazur took issue with Mr Middleton’s involvement and made an application for him to be replaced by a qualified solicitor. In the county court, the judge found that although Mr Middleton was an unauthorised person, he was entitled to conduct litigation as he was taking part in reserved activities. His work was also being completed under the supervision of a qualified solicitor, according to GBS. Mrs Mazur appealed the decision to the High Court.

The High Court’s decision in Mazur

On appeal, Mr Justice Sheldon confirmed that the conduct of litigation is a reserved legal activity under the LSA and may only be undertaken by an authorised or exempt person. Merely being employed by a firm and supervised by an authorised person isn’t sufficient to enable the employee to undertake litigation work, even if unauthorised.

The court found that sections 15 and 16 of the LSA separated out the entitlement of employees to carry out reserved legal activities from that of their employer. The employee must be authorised themselves or alternatively should fall within any of the exemptions under the LSA to proceed with carrying out such work.

Non-qualified staff, such as paralegals, trainee solicitors, litigation executives and even CILEX fellows who don’t have independent litigation practice rights, are permitted to assist or support authorised persons in the conduct of litigation, but not to conduct it themselves – even under supervision.

The court didn’t decide whether Mr Middleton was conducting the litigation under the supervision of another solicitor or supporting that solicitor, but simply decided that he was not entitled to conduct litigation under supervision. It also didn’t decide whether the working practices used by GBS were unlawful, recognising that those questions would depend on the facts of each individual case.

Implications for in-house lawyers arising from Mazur

The Mazur judgment relates only to litigation. The decision is certainly a warning to solicitors and other authorised persons to be wary of supervision and their existing processes where non-qualified staff are assisting with litigation work.

It impacts law firms and in-house legal teams who rely on unqualified staff to carry out a range of litigation activities under the supervision of qualified staff. They will need to re-think their practices in light of the decision in Mazur to avoid breaching their legal and regulatory duties.

There are no statutory restrictions on non-authorised staff undertaking work pre-litigation or on someone who is an exempt person in relation to the conduct of litigation.

Previous cases have looked at the difference between non-qualified staff ‘conducting’ litigation as opposed to ‘supporting’ litigation and what this means in practice, but it remains a grey area. However, this decision does mean that the conduct of litigation and, in particular, distinct steps taken during litigation – including the signing and issuing of statements of case, court forms and documents and making decisions about case strategy – should only be performed by authorised persons. The focus is on who is legally entitled to carry out the reserved activity, not whether the employer is regulated.

The decision also has immediate consequences for costs in ongoing litigation. Time recorded by non-qualified staff on tasks that amount to conduct of litigation may no longer be recoverable under the Civil Procedure Rules. Costs judges may be asked to determine who performed key steps and opponents may resist paying fees where the record suggests unauthorised staff were running the case. As a result, it’s important to keep notes of time spent and file notes with a narrative demonstrating that authorised individuals took key steps in the conduct of the litigation.

What happens next and what should I do?

From an in-house lawyer’s perspective, the decision in Mazur is unlikely to create the same ripple effect as it has for private practice law firms. However, if in-house legal teams who undertake litigation have non-qualified staff who might be conducting rather than supporting, they should review their processes to ensure they’re not in breach of the LSA.

Even though their employer is not regulated by the SRA, individual solicitors are bound by the Standards and Regulations and Code of Conduct which requires them to comply with all applicable laws and regulations.

Some examples of proactive steps that could be taken in light of the Mazur decision include:

• Reviewing how you’re conducting litigation and making sure that non-qualified staff are not engaging in reserved activities, even if under direct supervision from authorised persons
• Ensuring that detailed records are kept on ongoing litigation cases to show compliance with the rules and steps being taken by authorised decision-makers
• Always making sure that formal steps and decisions in litigation are taken exclusively by authorised persons
• Carefully considering the roles and responsibilities of qualified staff in relation to reserved activities, so their work is confined to support instead of conducting of litigation.

The Mazur decision has prompted widespread discussion among regulators including the SRA, CILEX and Legal Services Board. The government is also reviewing potential reform to the Legal Services Act 2007.

The long-term implications are currently unclear, but it’s anticipated there will be a more rigid distinction between the roles of authorised and non-authorised staff in litigation. What is required is clarity on the extent to which a non-qualified member of staff may assist an authorised person before they’re deemed to be conducting litigation.