Mazur Reversed: Court of Appeal Creates a Responsibility-Based Approach to Litigation

Overview

The Court of Appeal’s decision in CILEX v Mazur provides much needed clarity on the meaning of “carrying on the conduct of litigation” under the Legal Services Act 2007 (the LSA).

It overturns a High Court ruling that had cast doubt over the way that many law firms operate, and particularly the use of paralegals and litigation executives. As Sir Colin Birss put it, the High Court judgment had led to “real world impact” and a “scramble” by various regulators to bring their guidance in line with the law. Much of the legal sector had expressed concerns that the judgment had undermined the way they had been working for many years and particularly following the introduction of the fixed costs regime. The personal impact on many unauthorised persons has been profound.

For law firms and their professional indemnity insurers, the judgment is significant in confirming that standard delegation models remain lawful and narrowing the scope for technical challenges to claims. However, questions remain and the fallout for many individuals and firms cannot easily be undone.

1. Can non-authorised persons “conduct litigation” under supervision?

The central issue was whether an unauthorised person commits an offence under s.14 of the Legal Services Act 2007 (LSA) by carrying out litigation tasks under the supervision of an authorised person.

The High Court had drawn a sharp distinction between “assisting” (lawful) and “conducting litigation under supervision” (unlawful).

The Court of Appeal rejected that distinction outright.

It held that the correct focus is on who has responsibility, direction and control. Where an authorised person retains those elements, they, not the unauthorised person, are “carrying on the conduct of litigation”. In turn, this means that where an authorised person supervises the work (whether directly or through appropriate systems) and remains professionally accountable, it is the authorised person who is “carrying on” the litigation for the purposes of the LSA. This remains so even if many of the operative steps, such as drafting documents, issuing proceedings or corresponding with the court, are carried out by an unauthorised person.

This reflects longstanding practice. Authorised persons have always delegated substantial elements of litigation to unauthorised persons, while remaining professionally responsible. The Court found nothing in the LSA to suggest Parliament intended to criminalise that model.

2. What actually counts as “conduct of litigation”?

Perhaps unsurprisingly, Sir Colin Briss stated that “Despite, however, the obvious desirability of clarity, I have concluded that it is simply not possible to provide a comprehensive list of all those tasks that fall within and outside the conduct of litigation”. The Court specifically declined deliberately to define the scope of “prosecution and defence of proceedings”.

However, the Court confirmed that “conduct of litigation” refers primarily to formal procedural acts, such as issuing proceedings and service of documents. The Court also drew attention to the case of Agassi, which held that the meaning of “conduct of litigation” should be construed narrowly.

By contrast, the Court indicated expressly that activities such as pre-litigation work, giving legal advice in connection with court proceedings, corresponding with the opposing party, gathering evidence, instructing and liaising with experts and counsel, signing a statement of truth and signing any other document the CPR permits to be signed are unlikely to fall within the definition of “conduct of litigation”.

The Court also distinguished cases post-LSA cases such as Ndole and Baxter, highlighting that they are concerned with unauthorised persons acting independently, typically for litigants in person. In these cases, there was no authorised person capable of retaining responsibility.

3. Are delegation-heavy models lawful?

Yes. The Court confirmed that models commonly used by high volume litigation firms and law centres are lawful, provided that authorised persons retain responsibility and proper supervision is in place.

This is a critical point which preserves the operational reality of firms where much of the day-to-day handling of claims is undertaken by non-authorised persons within supervised structures. The real question, as dealt with in much of the previous commentary around this case and by regulators, is what constitutes effective supervision. Law firms should ensure that they have comprehensive supervision policies in place and that these are both complied with and reviewed regularly. This is particularly important in the high-volume space, where the ratio of unauthorised persons to authorised persons is likely to be higher.

What remains uncertain

While the decision brings welcome clarity, it does not resolve every issue.

The Court leaves open the precise boundary of “conduct of litigation” in more complex or borderline tasks. Further, the Court did not explain what “proper direction, management supervision and control” looks like when delegating tasks. The Court left this to regulators to clarify. It remains to be seen whether those regulators are able to shed much further light on the subject. There is also uncertainty about the long-term impact on regulators more generally. This is particularly so given the concerns raised about some of the advice previously provided to those they regulate as highlighted in the judgment.

These questions are likely to be explored in future disputes, particularly where there are allegations that an unauthorised person was effectively operating autonomously. Whilst arguably Mazur has simply restored the status quo, certainly it has shone a spotlight on the topic of supervision. Law firms can, therefore, expect regulators to take a keen interest in how they deal with that, particularly in light of the SRA’s current focus on high-volume claims work and a number of recent high profile firm collapses. It should, however, bring an end to satellite costs litigation seeking to reduce or deny any costs incurred by unauthorised persons, although what happens with those claims already in train or where there has already been a decision on the topic is also yet to be seen.

Unauthorised persons will also be left considering where they go from here. Many will already have taken steps to obtain additional practising rights and those whose applications are not yet complete may wish to continue to pursue them. However, there will be damage done to some of those unauthorised persons, many of whom lost their jobs as a result of the fallout from the initial decision and firms which employed them which cannot yet be fully calculated.

Key takeaways

The Court of Appeal has restored a responsibility-based test: litigation is conducted by the person who controls and are responsible for it, not necessarily the person who performs the individual steps.

This significantly reduces the risk of arguments that claims are invalid or unlawful due to the involvement of unauthorised persons. However, it shifts the focus to whether law firms can demonstrate genuine supervision and retained responsibility, which may become the new battleground in both negligence and regulatory disputes.