Julia Mazur & Ors v Charles Russell Speechlys LLP

An employee of an authorised legal-services provider is not thereby authorised to conduct litigation. Under the Legal Services Act 2007, entitlement belongs separately to the individual and the employer. An unauthorised employee may support an authorised solicitor, but may not conduct litigation under that solicitor’s supervision unless individually authorised or exempt.

The court also held that, in an Intermediate Track claim, costs for an interim application are subject to the applicable fixed-cost regime unless exceptional circumstances justify removing the cap. A failure to use the prescribed costs form does not itself invalidate the costs evidence where the substance of the rule has been complied with and no prejudice is caused.

The appellants appealed from a Brighton County Court order lifting a stay in a debt claim brought by the respondent law firm and ordering them to pay £10,653 in costs. The stay had been imposed because a non-practising employee of the respondent’s solicitors appeared to have undertaken reserved legal activities, including litigation steps.

By the time of the lower-court hearing, that employee had been replaced by a qualified solicitor, and the firm had amended its pleadings. The lower court relied on the Solicitors Regulation Authority’s view that employees of an authorised firm could undertake reserved activities under Legal Services Act 2007, section 21(3). The appeal concerned the employee’s entitlement to conduct litigation and the lawfulness and amount of the costs order.

1. Entitlement to conduct litigation. The appeal succeeded on the legal issue. Under sections 12, 13, 14, 15, 16, 18 and 19 of the Legal Services Act 2007, and paragraph 4 of Schedule 2, the conduct of litigation is a reserved legal activity. A person may carry it on only if that person is authorised or exempt. The employee’s entitlement is distinct from the employer’s entitlement: sections 15 and 16 would make no sense if employment by an authorised person itself conferred authority (paras [48]-[62]).
2. Section 21(3) defines the persons subject to regulatory arrangements. It includes unauthorised employees of authorised persons for regulatory purposes, but does not enlarge the class of persons authorised to conduct reserved activities. The lower court and the SRA therefore erred in treating section 21(3) as conferring authority (paras [59]-[63]).
3. The statutory scheme permits an unauthorised person to support an authorised solicitor, but does not permit that person to conduct litigation under supervision. Whether the employee in fact crossed that boundary was left undecided, both because the employee was no longer involved and because he was not a party to the appeal (paras [64]-[67]).
4. Costs. The costs order could not stand because it was based principally on the erroneous conclusion that the appellants had lost the Legal Services Act point. The claim was provisionally within the Intermediate Track regime. Under CPR 45.8, the recoverable amount for the interim application was £333 plus the appropriate £303 court fee, absent exceptional circumstances. No such circumstances were identified (paras [68]-[74]).
5. The failure to use Precedent U did not invalidate the costs evidence because the document supplied set out the costs and caused no prejudice (para [71]). The appeal was allowed, the £10,653 order was quashed, and it was varied to an order of no order as to costs below. The requests for regulatory referral and strike-out were refused (paras [75]-[79]).

• High Court (Administrative Court): allowed the appeal from the Brighton County Court order, quashed the £10,653 costs order, and substituted an order of no order as to costs.
• Brighton County Court: His Honour Judge Simpkiss lifted the stay, permitted amended pleadings, and ordered the appellants to pay £10,653.
• Earlier procedural order: Deputy District Judge Campbell had stayed the proceedings because of concerns about an unauthorised person conducting litigation.