Julia Mazur & Ors v Charles Russell Speechlys LLP

On 16 September the High Court gave judgment on Julia Mazur & Ors v Charles Russell Speechlys LLP (“Mazur”), a case which involved a non-qualified fee earner undertaking reserved legal activity (s 13 Legal Services Act 2007 (LSA 2007), namely, completing the Statement of Truth accompanying the Particulars of Claim

Charles Russell Speechlys LLP had instructed Goldsmith Bowers Solicitors (GBS) to act for them in this matter. Mr Middleton was the Head of Commercial Litigation at GBS, and so GBS attempted to argue that Mr Middleton was entitled to conduct litigation as a regulated person under section 21(3) LSA 2007.  They also argued that the SRA’s lack of investigation in to GBS/ Mr Middleton provided that the SRA was also of this view.

Ultimately, the High Court disagreed. Giving the first ever judicial interpretation of section 21, Sheldon J ruled that non-authorised persons are permitted only to support an authorised person in undertaking reserved legal activity. It is important to note that supervision by an authorised person is also insufficient when undertaking reserved legal activity.

What may the potential changes to the Legal Landscape look like?

Restructuring

Although, many law firms may not be as affected by this ruling, those that do rely on paralegals/ legal secretaries to do most of the “leg work” when it comes to running files (these may be firms that take on a significant number of lower value claims) will need to potentially make structural and procedural changes to make sure that they are compliant after this new clarification of the legislation. Failure to do so amounts to an offence under section 14 of the Legal Services Act 2007. In practice, this may look like:

• Transferring files so that they are predominantly under the control of authorised personnel,
• Putting unauthorised staff through qualification, or
• Hiring more authorised staff.

The implementation of Legal AI

On 6^th May this year, the SRA approved the first ever AI powered law firm- Garfield AI. The platform’s function is to recover debts of up to £10k through the Small Claims Track. It simply requires the claimant (or their representative) to upload information relevant to the claim and authorise each step in the litigation process. Garfield can undertake acts such as:

• Drafting the Claim Form and Particulars of Claim,
• Apply for default judgement,
• Deal with settlement negotiations, and
• Prepare for trial.

It is said that there are solicitors behind the scenes who approve the documents, but it appears as though the model draws similarities to those firms whereby unauthorised staff carry out the majority of the work leaving the authorised staff to provide light supervision. At this moment in time, AI is not caught under section 21(3), as it cannot be defined as either an authorised or unauthorised person. Time will tell as to whether, as the technology progresses, the law will develop to allow such platforms to be subject to regulation.

Law firms may look at their current employees who demand salaries, benefits and employment rights (all of which bringing with it liability on behalf of the employer), and find it to be commercially more appropriate to take a dive into the world of legal AI.

Addition of more internal processes

As a complete overhaul of the way a firm operates would appear to be unfavourable to most, firms will most likely look to change their processes slightly, so that if any of their files are ever subject to inspection with regard to who is undertaking reserved legal activity, that there are enough checks behind the scenes to ensure that the conduct of a case is being performed by an authorised person. It is a riskier approach but brings with it less of a financial burden than that of a complete restructure.

Ultimately, only time will tell as to how firms will conduct their practices going forward, but for now a starting point for firms is to ask themselves “who is exercising professional judgement in respect of the litigation” within their teams. If the answer is “unauthorised staff” as per the definition provided in LSA 2007, then changes must be made more imminently.