Bennett: Law firms should evidence who is doing what and why
Last week’s High Court ruling on unqualified fee-earners conducting litigation will cause “nationwide disruption”, it has been claimed, with firms urged to review their approach to supervision.
A barrister suggested that the decision in Mazur v Charles Russell Speechlys has “detonated like a bomb over the profession”.
Mr Justice Sheldon held that unqualified employees of law firms can support a solicitor in conducting litigation – but cannot conduct litigation themselves under the supervision of a solicitor. Both the Law Society and Solicitors Regulation Authority (SRA) intervened at the hearing.
Paul Bennett, a partner and solicitor-advocate at Bennett Briegal, represented the law firm involved, Bradford-based Goldsmith Bowers Solicitors, at the hearing. Speaking for himself, and not his client, he said the courts have never previously addressed the issue of non-admitted staff and their role.
“Still, the long-established practice of solicitors running cases with support from non-admitted staff remains a lawful approach. As the Law Society’s intervention outlined, whether or not a person supporting or assisting a solicitor to conduct litigation was conducting litigation themselves was ‘a question of fact and degree’.
“Firms dominated by non-admitted staff, which includes many consumer firms and alternative business structures aiming to service the volume litigation markets, must now evidence how their teams are completing the work lawfully in light of this decision.
“It is a new ‘record of compliance’ angle; law firms should evidence who is doing what and why, particularly in litigation, and potentially in other reserved legal activities. Compliance departments will be well advised to review what their firms are doing, seek specialist legal advice on it, and document why it is lawful.
“This is likely to be an ongoing area of compliance review. I expect the SRA will issue guidance in due course because it has long been needed.”
Writing on LinkedIn, Stephen Lund, chief executive of Manchester housing disrepair firm Antony Hodari, was critical of the lack of public comment from the SRA.
“It is hard to imagine that the regulator did not anticipate that this judgment would cause nationwide disruption, affecting thousands of firms. Their inbox must now be full of self-reports from across the profession,” he wrote.
“Despite having weeks to prepare, there has been no guidance, no reassurance and no practical steps published to help firms navigate what is a seismic shift for litigation practices.”
Mr Lund said the consequences would be significant: “millions of pounds of wasted costs” for solicitors and the courts service, “further delays for claimants and defendants across England and Wales”, and “thousands of regulated individuals left worried about their jobs and careers”.
An SRA spokesman told Legal Futures only that the regulator “will be looking at the judgment”.
Andrew Hogan, a costs barrister at Kings Chambers, said the ruling “has detonated like a bomb over the profession”.
He explained: “High-volume practices that let non-admitted case-handlers sign, issue and engage the court may have to re-engineer their workflows. An authorised solicitor must own and execute the reserved steps.
“Second, there will be satellite disputes about earlier pleadings issued or signed by the ‘wrong’ person. The court in Mazur declined to strike out because the defects were now cured and strike-out would cause prejudice. But not every case will be so fortunate in timing or discretion. The risk is real.”
Further, said Mr Hogan, costs would be contested. “If a firm relied on an unauthorised person to conduct litigation, the opponent may resist paying for those acts. On the other hand, this decision has the potential to dramatically increase costs, if delegation cannot be lawfully done.”
Iain Miller, a regulatory partner at City firm Kingsley Napley and general editor of the textbook Cordery on Legal Services, said the ruling highlighted “the unclear question of what is the conduct of litigation in the first place”.
He added: “This decision does have an adverse impact on access to justice, in that it will mean that supervision structures within firms are likely to constrain the roles of paralegals and other non-authorised person and as such the cost of providing the service is likely to increase.”
He allayed concerns that probate and conveyancing would be affected by the decision, as the Legal Services Act expressly provides exemptions for non-admitted persons conducting those activities under the supervision of regulated lawyers.
“I have been bemused for some time as to why there is not a similar exemption for litigation,” he added.
Alfie Cranmer, a regulatory lawyer in the general counsel office of Pinsent Masons, wrote on LinkedIn: “I suspect bulk litigation firms will (if challenged) argue that unqualified staff are merely implementing the decisions, strategy and judgement of a qualified/authorised person which is applied uniformly to all cases, meaning that there is no ‘professional judgement’ from the unqualified staff member themselves.
“But perhaps the SRA ought to consider a guidance note.”
Stephen Nelson, a senior associate at Kingsley Napley and former head of legal at the SRA, wrote that he expected opposing litigators to raise the point more frequently in contentious matters.
“Firms must also remain alert to the practising rights of other legal professionals they employ. For example, barristers do not automatically have the right to conduct litigation and require specific authorisation from the Bar Standards Board.
“Similarly, CILEX lawyers have defined practising rights depending on the qualifications they hold, and those without the appropriate practising certificate for civil or criminal litigation may risk falling foul of the rules.”
Mark Aspin, director and head of dispute resolution at Cumbrian firm Cartmell Shepherd, questioned what the case meant for trainee solicitors and solicitor apprentices.
“I want them to learn how to ‘conduct litigation’. I will give them their ‘own’ files to manage so when they become a newly qualified solicitor, they know what to expect. Indeed, for apprentices it’s part of their KSBs [knowledge, skills and behaviours],” he said on the social media network.
“I’ve treated this as fine – my interpretation of the law was the same as HHJ Simpkiss [the first instance judge in Mazur].
“Objectively, I would probably admit they are conducting litigation – under very close supervision admittedly, and only on appropriate files. They will come up with the plan, that I (or another fully regulated colleague) will sign off on – but I wouldn’t say it was ‘my’ file that they are assisting me on.
“It’s not a business model, it’s a model of encouraging the next generation. From at least one interpretation of the judgment, however, it’s not permitted.”
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