Mazur v Charles Russell Speechlys – Wrongly decided? – Part 4

The title of today’s post is a bit of a cheat as we are not looking at the direct question of whether Mazur & Anor v Charles Russell Speechlys LLP [2025] EWHC 2341 (KB) was wrongly decided as a matter of law, but a related issue as to whether it matters at all.

An unauthorised person is nevertheless entitled to conduct litigation if they are treated as an exempt person under the Legal Services Act 2007. Schedule 3 deals with exempt persons. For current purposes, s2(2) states:

“The person is exempt if the person—

(a) is not an authorised person in relation to that activity, but

(b) has a right to conduct litigation granted by a court in relation to those proceedings.”

The argument therefore goes that if there is an existing case where an unauthorised person has had conduct, you can simply ask the court to exercise its discretion under this section and the problem goes away. There is nothing in the section to suggest that the right cannot be granted retrospectively. This would also mean that if a challenge was raised to recoverability of costs at a detailed assessment, an application could be made to the costs judge to retrospectively grant a right to conduct litigation and, again, the problem would be solved.

Can everyone now relax?

The starting point must be to consider the purpose of s2(2). The wording itself contains to guidance or limitation. Nevertheless, there are situations where it is easy to see why a discretion might be granted and other situations where it would not.

If an impecunious claimant had an uncle who was a retired solicitor (without a current practising certificate and therefore an unauthorised individual) who was prepared to act for their nephew on a pro bono basis, it is easy to see that a court may be happy to grant a right to conduct litigation to the uncle, particularly as this should avoid many of the problems that otherwise might arise dealing with a litigant in person. On the other hand, it seems vanishingly unlikely it would grant such rights to an unregulated claims management firm operating for profit.

Assuming Mazur was correctly decided, it is nevertheless perfectly legitimate to criticise the Legal Services Act 2007 if it does not permit unauthorised fee earners to conduct litigation when they are acting under the supervision of an authorised fee earner in a regulated firm. However, the clear purpose of the Legal Services Act 2007 is to control, and limit, those who are able to conduct litigation. There are perfectly sensible policy reasons for this and there have been restrictions on those entitled to conduct litigation, and advocacy in the courts, for hundreds of years.

Where a fee earner discovers they have fallen foul of the Act and therefore applies to the court for permission under s2(2), they are not seeking an exemption due to the specific circumstances of the case, rather they would be seeking to make themselves entirely exempt from the Act. If the court were to agree to this on one case, there would be no reason not to grant permission on all other cases and to any other fee earner in the country in the same situation. I have heard, anecdotally, that some judges have been indeed been granting permission in this situation. However, it is extremely difficult to see how this would be a proper use of the discretionary powers under s2(2). If the Act has created problems, it is for either the regulators to ease those problems (as they are now doing for Chartered Legal Executives) or for Parliament to amend the Act. It cannot be for the judiciary to undertake this task by the back door.

Even if a court could be persuaded to exercise the discretion, it is doubtful this would assist costs recovery where the right is granted during the detailed assessment process. The reason for this is set out in Frison on Costs (Fourth Edition):

“If an entitlement to costs has already crystallised or is a near certainty, there is not a great deal that can usefully be done to remedy any problems with the contract of retainer—although rectification of a genuine error may still be available. This is because any steps taken (with the possible exception of rectification where there was evidence of genuine mistake in the way in which the retainer was recorded) would generally be ineffective as against the paying party. Lord Carswell had this to say on the point:

‘It was quite open to the [receiving party] and his attorneys to vary the fee agreement …  if they so wished … If, however, [the variations] were likely to produce a larger costs bill than the original framework … the [paying party] would be entitled simply to refuse to accept the amended basis and require the respondent to revert to the original framework … [The paying party] could do so on the ground … that that amendment had come into existence subsequent to the making of the costs basis and so could be disregarded by the paying party if he wished.’

Lord Carswell was giving an opinion on the Privy Council, so his comments are not binding, but McCombe LJ has confirmed that they ought to be followed. McCombe LJ went on to clarify that the bar against retrospective amendments after the costs order has been made is not a mere point of reasonableness, but a point of principle, and in doing so he affirmed the following comments of Warby J in the court below: ‘The liability to pay costs crystallises at that point and, although its quantum will remain to be worked out, that process must be governed by the liabilities of the receiving party as they stand at that time.’”

Although this deals with the slightly different issue of whether there is a remedy to discovering a retainer is defective, in seems extremely likely that the same approach would apply here. If the consequence of unlawfully conducting litigation is that costs cannot be recovered (and subsequent case law will need to establish if that is so), then if the liability of the receiving paying party at the point of settlement is £nil a court would not exercise any discretion under s2(2) so as retrospectively create such a liability to the detriment of the paying party.