Navigating litigation: what’s reserved?

The High Court has provided welcome guidance on what exactly constitutes the conduct of litigation: Iain Miller & Charlotte Judd examine this perilously grey area of the law.

• Baxter v Doble acts as a reminder to practitioners to ensure they are on the right side of the line when it comes to the reserved legal activity of conducting litigation and being authorised to act as required by the Legal Services Act 2007.
• The High Court has reiterated the fact-sensitive nature of assessing where a practitioner falls in respect of that line.

In March this year, the Legal Services Board concluded there was no current case for reform in respect of reserved legal activities (RLAs) as stipulated by the Legal Services Act 2007 (LSA 2007). RLAs comprise the work that can only be done by those who are regulated by an approved legal regulator. The current framework is therefore here to stay, for now.

Difficulties have arisen in practice, however, in the interpretation of the RLAs and what activities might be considered to fall within them. This is particularly so in respect of the RLA of conducting litigation. Indeed, several cases have come before the courts on the question of whether a particular activity might fall within the meaning of conducting litigation and thus be restricted to individuals authorised and regulated by one of the approved legal regulators. Most recent was the High Court decision in Baxter v Doble and another [2023] EWHC 486 (KB), [2023] All ER (D) 64 (Mar).

This case and previous authorities have demonstrated that the framework of RLAs under LSA 2007 is full of grey areas as to when a practitioner does and does not fall on the right side of the line, with potentially very serious repercussions if one gets this wrong.

Acting when not authorised to do so

As stated, LSA 2007 reserves the carrying out of RLAs to persons who are authorised and regulated by an approved legal regulator (or exempt). ‘Person’ is defined broadly to include corporations and unincorporated bodies, as well as individuals. Both the individuals who are carrying out RLAs, and any entity through which they provide them, must be authorised.

There are six categories of RLAs under LSA 2007, including the conduct of litigation. The others are exercising a right of audience; reserved instrument activities; probate activities; notarial activities; and the administration of oaths.

If an individual or entity carries out a RLA when they are not entitled to do so, they may be found guilty of a criminal offence. A conviction could lead to a fine and/or a prison sentence of up to two years. An individual who is found guilty of such an offence in relation to the RLA of conducting litigation will also be guilty of contempt of court.

Turning to the conduct of litigation, the LSA defines this activity to comprise:

a. the issuing of proceedings before any court in England and Wales;

b. the commencement, prosecution and defence of such proceedings; and

c. the performance of any ancillary functions in relation to such proceedings (such as entering appearances to actions).

In practice, this wording gives rise to uncertainty as to what does and does not amount to the conduct of litigation. 

The Court of Appeal in Agassi v Robinson (HM Inspector of Taxes) [2005] EWCA Civ 1507, [2005] All ER (D) 40 (Dec), which considered the statutory wording of ‘ancillary functions’ (despite having been decided prior to LSA 2007 coming into effect), provided further guidance. It said ‘ancillary functions’ must be related to formal steps required in the conduct of litigation. Given the potential penal implications of breaching this section and the obscurity of the wording, the words should be construed narrowly. They cannot cover all of the activities that are ancillary to litigation and which are sometimes carried out by a solicitor and sometimes by a lay person. For example, they could not cover giving legal advice in connection with court proceedings and would not extend to purely clerical or mechanical activities like photocopying documents, preparing bundles, delivering documents to opposing parties and the court etc.

Based on other authorities, it is possible to identify the following as not constituting the conduct of litigation:

• signing a statement of truth (O’Connor v Bar Standards Board [2012] All ER (D) 108 (Aug));
• activities that occur prior to the issue of proceedings and which do not involve any contact with the court. For example, advising on the merits of starting proceedings or drafting particulars of claim (Heron Bros Ltd v Central Bedfordshire Council (No 2) [2015] EWHC 1009 (TCC) (obiter));
• sending copies of the pleadings to the other party on the same day that they were sent to the court (Heron Bros (obiter));
• the giving of legal advice per se by someone who is not a qualified lawyer (JK v MK [2020] EWFC 2); and
• drafting of a claim form such as a divorce petition or an application for decree nisi or the supporting statement (JK v MK). 

Again, based on the authorities, it is possible to identify the following as constituting the conduct of litigation:

• sending copies of the claim form and particulars of claim for sealing and issue (Heron Bros (obiter));
• serving the claim form (Heron Bros(obiter)); Ndole Assets Ltd v Designer M&E Services UK Ltd [2018] EWCA Civ 2865) (Ndole also held that the service of a claim form by a person who was not an authorised or exempt person did not mean that the service was invalid, so long as they were simply engaged in the ‘mechanical’ activity of actually delivering the claim form);
• serving documents, filing documents at court, giving assistance to people at court hearings and giving your address as an address for service (Ellis v Ministry of Justice [2018] EWCA Civ 2686; this decision was made in circumstances where Mr Ellis instructed the litigant what to say in the tribunal and drove what was happening at the hearing). 

The commencement, prosecution & defence of proceedings

In Baxter v Doble, the High Court was called upon once again to determine a different set of facts and whether these constituted the conduct of litigation. The case involved allegations that Mrs Doble and her company were in contempt of court for providing legal services to a party bringing possession proceedings when they were not entitled to do so, contrary to LSA 2007. 

Mrs Doble was CILEX-qualified. After some years working as a paralegal for a firm of solicitors, she set up her own business in 2014 advising and assisting letting agents and landlords experiencing difficulties with tenants, after identifying what she felt was a gap in the market. 

Between 2016 and 2018, Mrs Doble was the subject of a CILEX Regulation investigation. As part of the investigation, CILEX Regulation took issue with Mrs Doble’s practice of sending letters on behalf of clients to the court on her company’s letterhead which, in particular, asked the court to ‘issue and serve’ proceedings; it was thought this could amount to conducting litigation. It was ultimately agreed that future letters sent by Mrs Doble to the court would not be on her company letterhead and that they would be perused and signed by the relevant client beforehand. Also, correspondence with the other party to proceedings was, from that point onwards, signed by the client and generally did not use the company letterhead. Mrs Doble continued to compose the letters. She understood that CILEX Regulation’s position was that these changes were sufficient to mean that she and her company were no longer conducting litigation. 

Mr Justice Cavanagh recognised that the issues raised by the proceedings were potentially of general public importance, there being a number of other businesses which ‘follow a similar operating model to that followed by [Mrs Doble]. Some of these assist landlords, and some operate in other spheres, such as taxation’. 

He went on to identify the central question for the case to be what is meant by ‘the commencement, prosecution, and defence of proceedings’ under LSA 2007. 

Commenting that it was very difficult to identify a clear dividing line between what does and does not amount to the conduct of litigation from a review of the authorities, Cavanagh J nevertheless observed there were ‘clues’ from the statutory language, and from the case law, that assisted him in deciding whether Mrs Doble fell on the right or wrong side of that line. 

He identified four key points of general principle from the authorities, the first two identified by the Court of Appeal in Agassi, and the latter two by the same court in Ndole:

1. the starting point must be the statutory language itself, and the statutory words must be given their natural and ordinary meaning;
2. it must be borne in mind this is penal legislation;
3. substance must prevail over form; and
4. the question is one of fact and degree in every case. The Court of Appeal in Ndole said an approach permitting individual assessment of the activity undertaken in an individual case is likely to achieve justice.

In determining whether Mrs Doble had engaged in conducting litigation, Cavanagh J further concluded that the court should, ‘look at the entirety of the activities’ she and her company had undertaken: ‘To do otherwise…would… run the risk of form being prioritised over substance.’ This was the principle to arise from the authorities (for instance, Ndole considered the whole course of events).

Applying that approach, Mrs Doble had conducted litigation. She and her company ‘did everything…in relation to the proceedings that a solicitor or other authorised person would have done. They gave full-service assistance…including drafting all of the documents required to comply with formal requirements, giving instructions to counsel, making a payment to court, corresponding with the other side, and ensuring that all procedural steps complied with the CPR. Someone must have conducted this litigation, and it would be wholly artificial to say [Mrs Doble’s client] did it himself, albeit with support and guidance from [Mrs Doble/her company] …. Their role went far beyond clerical or mechanical assistance’. 

The only difference in this case from that which a solicitor or authorised person would have done was that Mrs Doble/her company did not ‘formally go on the record or use their own notepaper for covering letters when dealing with the court’ (though they did use their own letterhead when corresponding with the other side). For these matters to take activities outside the meaning and scope of the conduct of litigation would be to again ‘prioritise form over substance’. 

Having held that Mrs Doble and her company were engaged in conducting litigation, Cavanagh J further held that on the facts of this case the statutory defence under s 14(2), LSA 2007 applied—namely that Mrs Doble did not know, and could not have been reasonably expected to know, that the offence was being committed.

She was ‘an entirely truthful witness’ and could not have been reasonably expected to know she and her company were conducting litigation in the circumstances. The confusing state of the law was a key feature in this conclusion being reached. 

Where are we now?

Baxter v Doble provides welcome further guidance in this notoriously grey area. However, where the question is one of ‘fact and degree in every case’, which involves an assessment of the ‘entirety of the activities’ undertaken by the party concerned, this area remains one that requires a fact-sensitive analysis where there is any uncertainty which makes it difficult for there to be any certainty. 

This case acts as a warning for those operating similar business models to revisit their working practices and ensure they are on the right side of the line. The steps taken by Mrs Doble previously in response to CILEX Regulation’s investigation played an important part in the court’s decision that the statutory defence under LSA 2007 applied and Mrs Doble was not, crucially for her, in contempt.

This article was first published in New Law Journal, 12 May 2023.

FURTHER INFORMATION

If you have any questions about the issues discussed in this article, please contact Iain Miller or any member of our regulatory team.

 

ABOUT THE AUTHORS

Iain Miller is a Partner in the Regulatory department and specialises in advising law firms and the legal professionals on legal ethics, investigations, and public law matters.