Judge slashes law firm’s costs because of Mazur

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Lumb: Process is no substitute for understanding

A regional costs judge has described how he applied the High Court’s ruling in Mazur to cut the costs awarded to a law firm in a housing possession case from £3,000 to less than £500.

District Judge Richard Lumb, who sits at Oxford Combined Court, predicted that Mazur would lead to “a whole lot” of inconsistent decisions in the lower courts until the issue reached senior judges who could give the right guidance.

Mr Justice Sheldon ruled in Mazur last month that non-authorised employees of law firms can support a solicitor or other authorised person in conducting litigation, but cannot themselves conduct litigation under supervision.

Speaking at last week’s Claims Futures conference in Manchester, DJ Lumb said the ruling had “certainly scared a lot of people, and I think understandably so”.

The day before speaking at the conference, he had dealt with a housing possession list of 25 cases, and couple of them involved private landlords with agreements saying that, in the event of a dispute that went to court, the tenant had to pay the landlord’s reasonable costs, to be summarily assessed by the court.

Schedules of costs were produced and in one case it was clear that the case had been conducted throughout by a grade D paralegal.

“The reality of that, applying Mazur… is that the person was not authorised to be conducting litigation and there weren’t any other fee-earners in doing the work, according to the schedule of costs.

“As a consequence, applying Mazur – which is a case binding on me at my level – I disallowed those costs, which were claimed at about £3,000, but instead gave the solicitors fixed costs which were recoverable, which including the court issue fee were just less than £500. It made a significant difference.”

DJ Lumb warned that “judges at my level are going to make decisions and I’m afraid you’re going to end up with a whole lot of decisions which are inconsistent with each other”.

He went on: “That’s what the appeal process is there for, so that it goes further and further up the judicial food chain until eventually we’ll get some very senior judges who will actually give us all the appropriate guidance that we need.”

In the meantime, DJ Lumb said he would “urge caution in adopting any particular commentaries that have been made by legal commentators”, some of whom could simply be expressing “wishful thinking” or saying “what they hope it’s going to mean”.

Practitioners needed to go back to what the Legal Services Act and the Civil Procedure Rules said; there was “a clear tension” between them and, in such circumstances, “the statute is going to prevail”.

The judge said Mazur had created “quite an unholy mess” which “really does need quite a lot of sorting out” and lawyers also needed to consider decided cases by the senior courts in relation to some of the issues.

Following Mazur, DJ Lumb stressed that proceedings needed to be signed by an authorised person.

“An authorised person is going to be a solicitor. I’m afraid that there are going to be a lot of cases out there where they’ve been signed by paralegals or [non-authorised] fee-earners, because it was always assumed that this was acceptable.

“I don’t think judges are likely to throw out the cases and say this is all completely unlawful, but I think, as I’ve said with the housing cases, that it may well have an impact in relation to costs.”

DJ Lumb added that it was “very important” that heads of law firms and senior people within firms “conduct the appropriate review as quickly as possible” in the wake of Mazur and “try and correct things where things have potentially gone wrong.”

More broadly, the judge cautioned about the complete focus on process in volume litigation, saying that “process is not a substitute for understanding”.

“All too often… it’s pretty obvious that you’ve got often fee-earners who are doing these cases who really have no proper understanding of what they’re doing or why they’re doing it.

“They’re just simply following a process. They’re just simply following a template or a checklist. ‘Yes, if I’ve done that, if I’ve done that, then that’s fine’. And often it’s not when it gets to court and it creates all sorts of problems for everybody, not least the judges…

“We’ve always got more than enough to do. And the last thing we want to do when we get a case in front of us for trial… is mess around, trying to work out what on earth has actually happened and what this case is all about.”