Mazur: Court of Appeal overturns restrictions on conduct of litigation

The Court of Appeal has upheld the appeal brought by CILEX against the decision of the High Court Mazur and Stuart v Charles Russell Speechlys LLP.   In doing so, it has overturned the High Court’s decision as to the limitations imposed on the conduct of litigation under the Legal Services Act 2007 (the Act).  The Court of Appeal’s judgment is here.

As is now well known, the decision of the High Court, and the appeal, turned on the question of whether someone who is not an “authorised person” under the Act (generally speaking, an “authorised person” is a solicitor, or a barrister or CILEX lawyer with the relevant extension to their registration to allow for the conduct of litigation) could lawfully conduct litigation under the supervision of an authorised person, or whether they were limited to supporting or assisting an authorised person.  

In very brief summary, the Court of Appeal has held that:

• the High Court was wrong to draw a distinction between “conducting under supervision” and “supporting and assisting with conduct”, and was wrong to conclude that a person who was not authorised was prohibited from conducting litigation under supervision;
• the reserved legal activity under the Act is “carrying on” the conduct of litigation, and the Court of Appeal concluded that the words “carry on” refer to the direction and control of, and responsibility for, the tasks, not simply the act of doing the tasks; 
• a person who is not authorised under the Act can perform any tasks which are within the scope of the conduct of litigation, provided that an authorised person retains responsibility for those tasks;
• where an authorised person retains responsibility for the tasks amounting to the conduct of litigation, the authorised individual is the person carrying on the conduct of the litigation;
• “responsibility” is stated to include the “professional principles” under the Act, of independence, integrity, proper standards of work, acting in the best interests of clients, compliance with duties to the Court and maintaining client confidentiality;
• the question of what is an acceptable level of oversight and control will be context-specific, and a matter for regulators; the Court of Appeal anticipates that in some situations a high level of control and pre-approval will be required, and in other situations regular meetings and sampling of work being sufficient. 

A summary of the Court of Appeal’s decision on this question is at paras 25-26 and 187 of the judgment.

The judgment also provides some further assistance to the profession on which tasks are in and out of the scope of the “conduct of litigation”.  

What has changed?

The simple (and simplistic) answer is that nothing has changed, in that Mazur does not change the law – it simply interprets the Act, which many practitioners (in house and in private practice), and indeed regulators, had overlooked or failed fully to grapple with for many years.  

However, it is obvious that the High Court decision has had huge repercussions across legal services, and the Court of Appeal’s decision provides some “course correction”, allowing long-term solutions which will more closely align with arrangements before the High Court judgment in 2025.  

The judgment also provides clarity for regulators, who may act more robustly to enforce the perimeters of reserved activities.  A key question now will be how to ensure, and demonstrate, that where tasks are delegated, an authorised person retains responsibility for them.  

The immediate consequences are likely to be:

A (more) consistent interpretation of “conduct of litigation”

The Court of Appeal, while recognising the desire for clarity, has stopped short of providing a definitive list of what is in and out of the scope of the conduct of litigation.  It is likely that activities such as approving settled statements of case, and deciding to issue proceedings, will amount to the conduct of litigation, albeit that such tasks can be carried out by people who are not authorised, provided that an authorised person retains responsibility.  The Court of Appeal has confirmed a list of tasks unlikely to fall within the scope of conduct of litigation:

• Pre-litigation work;
• Giving legal advice in connection with court proceedings;
• Correspondence with opponents;
• Instructing counsel and experts;
• Signing a statement of truth in respect of a statement of case;
• Signing a document which the CPR allows to be signed by a legal representative. 

Reduced tolerance for informal working practices

Many teams rely, for day-to-day matter management, on experienced paralegals, claims handlers, or staff who, while regulated, do not hold specific authorisation for the conduct of litigation (for example, CILEX lawyers without the specific litigation extension to their registration).  Notwithstanding the Court of Appeal’s judgment, regulatory status prevails over experience or job title: if an individual who is not authorised is carrying out day-to-day management of the litigation, then an authorised person must retain responsibility (and regulatory accountability) for that litigation, in order that the authorised person is still “carrying on the conduct of litigation”.  In order to manage risks (both organisational, and personal regulatory risks – see below), systems will be needed to demonstrate how authorised people are retaining responsibility and accountability for litigation.

Increased risk of procedural challenge

Since the High Court judgment, there has been an increase in parties to litigation seeking to:

• challenge steps taken by unauthorised individuals;
• raise technical objections to pleadings or applications;
• deploy the issue tactically in contested matters.

The Court of Appeal’s decision is likely to reduce the scope for such challenges, and courts will be reluctant to invalidate proceedings (there are, in any event, authorities to indicate that breaches of the restrictions on conduct of litigation do not invalidate proceedings).  The decision mitigates the risk of avoidable disruption, delay, and cost risk.  However, we are already seeing aggressive challenges in civil and criminal litigation, particularly where in-house teams in large organisations are managing litigation with mixed teams of solicitors, CILEX lawyers and paralegals, and the Court of Appeal decision is not going to completely eliminate such challenges. 

Greater emphasis on responsibility of authorised person as a legal safeguard

The Court of Appeal makes clear (para 187(vi)) that delegation of tasks by an authorised person to the unauthorised person “requires proper direction, management supervision and control”.  Responsibility for litigation will need to be real, evidenced, and in some situations contemporaneous to show (including to regulators) that an authorised person retains responsibility and accountability.  In order to demonstrate compliance, it is likely to be necessary to show:

• policies and workflows where non-authorised staff are undertaking the day-to-day management of litigation 
• in complex litigation, sign-off by an authorised person on case strategy, and documented review and approval of key documents and procedural steps;
• defined escalation triggers to seek supervision;
• in any case, a system of review and oversight to allow an authorised person to demonstrate that they are ensuring compliance with the professional principles.

What are the risks?

Although the appeal outcome provides greater flexibility, the case has highlighted three key areas of risk:

• Organisations
  
  • Potential disruption to litigation where challenges are raised as to compliance with the Act;
  • Resourcing challenges in implementing compliant structures and systems: in many organisations, this comes at a time when threatened and actual litigation is increasing as a result of AI-enabled challenges by litigants in person;
  • Employee relations, where experienced staff are identified as being unable to perform some of the activities that they previously undertook.
• Regulated staff
  
  • Individual staff, such as senior solicitors, face a risk of exposure to personal regulatory enforcement action.  This risk will remain where individuals retain responsibility for litigation on which staff who are not authorised under the Act are carrying out day-to-day work;
• Non-authorised staff
  • Where non-authorised staff are asked to carry out activity amounting to the conduct of litigation, there is a risk (albeit reduced following the Court of Appeal decision) that such activity may amount to a criminal offence.  

Immediate actions 

The Court of Appeal decision provides some assurance as to the continued viability of collaborative, mixed-role teams.  However, in order to demonstrate compliance, litigation teams should consider:

• Mapping litigation activities against roles;
• Undertaking a review of processes for approving decisions and documents; 
• Ensuring authorised staff accountability for litigation;
• Implementing policies for: 
  
  • matter allocation where litigation is under way or anticipated;
  • mandatory escalation and approval of key decisions and documents; 
  • structured file reviews;
  • records of allocation, decision-making and approval.

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