Mazur v Charles Russell Speechlys – what about costs recovery?

Let us assume that the worst has come to the worst and all work undertaken on a case was performed by an unauthorised fee earner. Where does that leave the issue of costs recovery in light of Mazur & Anor v Charles Russell Speechlys LLP [2025] EWHC 2341 (KB)?

Firstly, as we have already explored in a previous post, no step that is taken prior to the issue or commencement of proceedings can amount to the conduct of litigation. As such, there should be no difficulty recovering pre-issue work even when undertaken entirely by an unauthorised fee earner.

What about post-issue work?

Mazur held that it was unlawful under the Legal Services Act 2007 for an unauthorised individual to have conduct of litigation (and with it also potentially being a criminal offence and contempt of court). It is therefore difficult to see how a court would permit recovery of costs for work that had been conducted unlawfully. Although not entirely on all fours, it is certainly very similar to the situation of a retainer (most often a Conditional Fee Agreement or Damages Based Agreement) being held to be unlawful. Costs cannot be recovered pursuant to that unlawful agreement. An alternative claim on a quantum meruit basis would be bound to fail (Glaser & Anor v Atay [2024] EWCA Civ 1111). It may well be the case that once a court has concluded that an unauthorised individual has had conduct of the litigation then all costs would be disallowed on the basis that everything was tainted by unlawfulness.

The alternative approach would be for a court to identify only those specific items of work that amount to the conduct of litigation. For example, the giving of legal advice, even in the context of legal proceedings, would not alone usually be treated as the conduct of litigation (see paragraph 203 of Baxter v Doble & Anor [2023] EWHC 486 (KB)). Also, correspondence with another party to the proceedings alone would not usually be treated as the conduct of litigation (see paragraph 56 of Agassi v HM Inspector of Taxes [2005] EWCA Civ 1507). It may the case that a court would allow costs recovery of the specific items of work that did not amount to the conduct of litigation and just disallow those specific items of work that clearly did amount to the conduct of litigation (e.g. the issuing of proceedings).

However, extreme caution is needed here. It would be a mistake to take the approach of saying that step A is not the conduct of litigation, step B is not the conduct of litigation and step C is not the conduct of litigation, as such it is permissible to undertake steps A, B and C without falling foul of Mazur. This is because of the paragraph 208 of Baxter:

“the court should look at the entirety of the activities undertaken by the [unauthorised individual] to assist their client and then decide whether, taken in the round, they amount to the conduct of litigation.”

It may be the case that a court would conclude that once the threshold has been reached where the unauthorised fee earner is found to have had overall conduct of the litigation, it is the entirety of the activities that are tainted by unlawfulness and all such costs should be disallowed.

What about Fixed Recoverable Costs? It is clear that the indemnity principle does not apply to FRC (see Butt v Nizami [2006] EWHC 159 (QB)). If the indemnity principle does not apply, and it is therefore irrelevant from a between-the-parties perspective as to whether there is an unlawful retainer in place (e.g. an unenforceable CFA), it is easy to see that a court may conclude that, for the purposes of between-the-parties costs recovery, it is irrelevant whether some, or all, of the work was undertaken by an unauthorised fee earner. The FRC are fixed by rules of court and are recoverable regardless of who undertook the work. However, it is possible to envisage alterative arguments.

Not only does the Mazur issue open the way for opposing parties to challenge between-the-parties costs recovery, but it produces an equal opportunity for disgruntled clients to challenge their solicitors’ fees. To the extent to which this is done in the context of FRC work, even if costs can be recovered from the opponent, those costs belong to the client not the solicitors. It may be that the solicitors have to account to their client for any FRC recovered.