This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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In

Seymour v Ragley Trust Company Ltd & Anor [2025] EWHC 3400 (Ch)

the Business and Property Courts of England & Wales, Property, Trusts and Probate List, part of the Chancery Division of the High Court, considered various costs matters which I wrote up under

INTERIM PAYMENTS WHERE COMPLEX ISSUES TO BE RAISED ON DETAILED ASSESSMENT.

The court also considered the relevant principles applicable to the costs of claims against Trustees and quoted extensively from

Price v Saundry [2019] EWCA Civ 226.

The general rule is that the unsuccessful party will be ordered to pay the costs of the successful party at the end of the proceedings, and it was common ground that the defendants were the successful parties.

However, the claimant argued that the court should exercise its power under CPR 44.2(2)(b) to make a different order to the usual one and the claimant argued that the costs of all of the parties should be paid out of the Trust assets or alternatively, that an order should be made for a payment of only a proportion of the defendants’ costs and that that should be no more than 50% of those costs.

Trust Litigation can be divided into three categories and the court set out the law guidance in Paragraphs 6 to 9 of the Judgment.

6. First of all, after referring to the leading decision of Re Buckton [1907] 2 Ch 406, Asplin LJ, at [26], cited what Hoffman LJ (as he then was) said about Buckton in McDonald v Hall [1995] ICR 685. He said this, at 695G – 696B.

“While warning that it was ‘well nigh impossible to lay down any general rules which can be depended on to meet the ever varying circumstances of particular cases’, he said that trust litigation could be divided into three categories. First, proceedings brought by trustees to have the guidance of the court as to the construction of the trust instrument or some question arising in the course of administration. In such cases, the costs of all parties are usually treated as necessarily incurred for the benefit of the estate and ordered to be paid out of the fund. Secondly, there are cases in which the application is made by someone other than the trustees, but raises the same kind of point as in the first class and would have justified an application by the trustees. This second class is treated in the same way as the first. Thirdly, there are cases in which a beneficiary is making a hostile claim against the trustees or another beneficiary. This is treated in the same way as ordinary common law litigation and costs usually follow the event.”

The question, therefore, becomes that of identifying whether the case is one falling within the third category. That is where a beneficiary is making a hostile claim against the trustees or another beneficiary.

7. Asplin LJ went on in Price v Saundry at [27] to refer to the decision of Lightman J in Alsop Wilkinson v Neary [1996] 1 WLR 1220. I refer in particular to that part of the extract where Lightman J defined a “beneficiaries dispute”. This is a dispute with one or more of the beneficiaries as to the propriety of any action which the trustees have taken or omitted to take or may or may not take in the future. This may take the form of proceedings by a beneficiary alleging breach of trust by the trustees and seeking removal of the trustees and/or damages for breach of trust.

8. Then:

                        “A beneficiaries dispute is regarded as ordinary hostile litigation in which costs follow                  the event and do not come out of the trust estate: see per Hoffmann L.J. in McDonald                      v. Horn [1995] I.C.R. 685, 696.”

9. Asplin LJ then, at [28], discussed the effect of a trustee successfully defending a hostile claim with reference to the decision of the Court of Appeal in Armitage v Nurse [1998] Ch 241. The general rule is, and I paraphrase, that a trustee who has successfully defended him or herself against a claim for breach of trust is entitled to an indemnity out of the trust assets for having doing so. That is, of course, a distinct consideration from that of whether the court should make any order for costs as between the parties.

The court held that this case was a beneficiaries’ dispute.

On the facts here, the court held that it was not appropriate to depart from the general rule and ordered that the claimant should pay the defendants’ costs on a standard basis, to be assessed if not agreed.

It was agreed that insofar as any costs were not recoverable from the claimant for any reason, either because they were assessed down or not recovered, then the Trustee defendants should have an indemnity from the Trust assets and that that would be on the indemnity basis.

TRUSTEES AND COSTS – AGAIN

In

Smith & Ors v Campbell & Ors [2026] EWHC 144 (Ch)

the Chancery Division of the High Court was considering the incidence of costs in a Trust action and there were two separate but connected issues.

• The instance of the costs as between the parties; and

• Whether the Trustees should be deprived of their indemnity out of the assets of the Trust in respect of their costs of the proceedings.

The court held that overall the claimants had succeeded and that therefore, the starting point in in CPR 44.2(2)(a) was that the Trustees be ordered to pay the claimants’ costs, but that the court has broad discretion to make a different order if it is just to do so considering the conduct of the parties and the other features set out in CPR 44.2(4) and (5).

The court here did exercise that discretion and made no order for costs between the parties for various reasons including:

• The way in which the claimants conducted the action;

• Their failure to comply with the pre-action protocol;

• Their failure to respond properly to offers or mediation.

Mediation

The court set out its views at Paragraphs 26 and 27:

• It would have been far preferable for the parties simply to mediate this dispute, rather than each meeting the other’s offer of mediation with caveats and qualifications. Nevertheless, overall I consider that it is the Claimants, rather than the Trustees, who were primarily responsible for the failure to resolve the dispute by ADR:

1. The Claimants’ decision to initiate the proceedings without any forewarning placed a particular onus on them to consider mediation at an early stage.

1. The Trustees then made several offers of mediation at an appropriately early stage of the proceedings, which were not accepted by the Claimants. The Claimants also rejected outright the Trustees’ proposal – also made at a relatively early stage – that Paddy retire as a trustee.

1. The Trustees’ later failure to take up the Claimants’ offer of mediation was in the context of ongoing discussions of the possible demerger of the Trust, which both sides recognised would require further information and tax advice to be obtained.

1. While it is unfortunate that the parties’ last-minute exchange of offers did not result in a resolution, that is because time ran out on the discussions. That reinforces my impression that pre-action discussions or a more concerted attempt at ADR at an earlier stage of the proceedings could well have saved much of the cost that has been incurred.

• In summary: while the Claimants have achieved a partial success, their claim was materially exaggerated, and the majority of the cost of the proceedings was incurred in litigating allegations of breach of trust and misconduct against the Trustees that were either withdrawn or have been dismissed. The Claimants unreasonably failed to engage in any pre-action correspondence and were primarily responsible for the lack of early-stage ADR. In those circumstances, I do not consider that it would be just or fair to visit the Claimants’ costs of the claim on the Trustees. In all the circumstances, in my judgment the appropriate costs order as between the parties is that there be no order as to costs.

Conduct

The conduct of the claimants is set out in detail in the Judgment and will be fact sensitive to each case.

Pre-Action Protocol

The claimants failed entirely to follow the Pre-Action Protocol, and the court was critical of this in its own right but also said that that reinforced the need to engage in Alternative Dispute Resolution.

The Trustees’ Right of Indemnity

The Judgment sets out the law in detail and concluded that the Trustees’ costs of the proceedings were not properly incurred and so they were entitled to be indemnified out of the assets of the Trust in respect of their costs of the claim.

• A trustee’s right to be indemnified out of the assets of the trust in respect of his or her costs of proceedings concerning the trust, and the circumstances in which that right of indemnity may be lost, is a separate and distinct issue to the incidence of costs as between the parties. It is possible for the court to decline to make an order for costs in the trustee’s favour as against the other party, while at the same time permitting the trustee to be indemnified out of the assets of the trust in respect of his or her costs of the claim^[1]. Indeed, while it is unusual, it is also possible for the court to order that the trustee pay the costs of the other party to the proceedings, but at the same time to permit the trustee to be indemnified out of the assets of the trust in respect of those costs, such that the costs are effectively paid out of the trust: such an order was made recently in Shufflebotham v Shuff-Wentzel [2025] EWHC 3321 (Ch) (see paragraph [34] of the judgment of HHJ Charman). Nevertheless, there is a considerable factual overlap between the issues, since both require consideration of the reasonableness of the trustee’s conduct.

1. A trustee’s right of indemnity derives from s.31(1) of the Trustee Act 2000, which provides that “[a] trustee is entitled to be reimbursed from the trust funds… expenses properly incurred by him when acting on behalf of the trust.” “Properly incurred” is read to mean “not improperly incurred.” If there is doubt as to whether the costs have been properly incurred, the trustee has the benefit of the doubt: see Price v Saundry [2019] EWCA Civ 2261 at [29] – [30], per Asplin LJ.

1. CPR r.46.3 provides that “where…  a person is or has been a party to any proceedings in the capacity of trustee… [t]he general rule is that that person is entitled to be paid the costs of those proceedings, insofar as they are not recovered from or paid by any other person, out of the relevant trust fund or estate.” Any such costs are assessed on the indemnity basis: CPR r.46.3(3). Practice Direction 46 paragraphs 1.1 – 1.2 then provide that:

                                    “1.1 A trustee or personal representative is entitled to an indemnity out of the relevant trust fund or estate for costs properly incurred. Whether costs were              properly incurred depends on all the circumstances of the case including whether      the trustee or personal representative (‘the trustee’) –

                                    (a)           obtained directions from the court before bringing or defending the                                              proceedings;

                                    (b)           acted in the interests of the fund or estate or in substance for a benefit other                      than that of the estate, including the trustee’s own; and

                                    (c)           acted in some way unreasonably in bringing or defending, or in the conduct                        of, the proceedings.

                                    1.2 The trustee is not to be taken to have acted for a benefit other than that of the          fund by reason only that the trustee has defended a claim in which relief is sought against the trustee personally.”

1. These provisions “implement the statutory indemnity in the litigation costs context”: Smith v Michelmores Trust Corporation Ltd [2021] EWHC 1521 (Ch), at [9], per HHJ Matthews.

1. As is clear from the terms of CPR r.46.3, in determining whether a trustee has incurred costs improperly so as to be deprived of his or her right of indemnity out of the trust, the court must undertake a broad evaluative judgment, taking into account all of the circumstances of the case, but having particular regard to the three matters specified at CPR r.46.3(a) – (c).

1. As to the application of the provisions of CPR r.46.3 and of Practice Direction 46 to a claim to remove and replace trustees:

1.  A claim to remove and replace trustees in office is ordinarily to be characterised as a ‘beneficiaries dispute’, which is “a dispute with one or more of the beneficiaries as to the propriety of any action which the trustees have taken or omitted to take or may or may not take in the future. This may take the form of proceedings by a beneficiary alleging breach of trust by the trustees and seeking removal of the trustees and/or damages for breach of trust”: see Price v Saundry at [27], citing Alsop Wilkinson v Neary [1996] 1 WLR 1220, at 1224B, per Lightman J (as he then was). Such a claim is usually “regarded as ordinary hostile litigation in which costs follow the event and do not come out of the trust estate”: Alsop Wilkinson, at 1224G, citing McDonald v Horn [1995] ICR 685, at 696.

1. However, a removal claim is not always categorised as hostile litigation: sometimes a claim to remove or replace trustees will in substance be concerned with remedying an issue that exists in the administration of the trust: see as an example Jones v Longley [2015] EWHC 3362 (Ch).

1. Evidently, where a removal claim is brought against trustees and fails, it is unlikely that the court will deprive the trustees of their right of indemnity. But where the removal claim is successful, the position is more difficult. In that situation, the court must assess whether the trustees have defended the removal proceedings in their own interests, or in the interests of the trust. “There is no need for a positive finding of breach of trust in order for the indemnity to be lost. The question for the court is whether it was unreasonable to defend the application without the court’s approval”: see Hanson v Coleman [2025] EWHC 116 (Ch), at [21], per Master Brightwell, citing Perry v Neupert [2019] EWHC 2775 (Ch), at [24], per HHJ Eyre QC (as he then was).

1. For obvious reasons, the grounds on which the court removes and replaces the trustees will be highly relevant to the assessment. If trustees are removed on the grounds of positive misconduct, it is likely that they will be deprived of their right of indemnity. Similarly, if trustees have engaged in self-dealing or are subject to a material conflict of interests rendering them unfit to continue in office, it is unlikely to have been in the interests of the trust or reasonable in all the circumstances for them to have resisted their removal from office.

• A more difficult category is a claim to remove and replace the trustees on the basis of hostility, or on the basis of a breakdown in relations between the trustees and the beneficiaries. In relation to a successful removal claim in that category (which includes the present claim), Mr Learmonth KC submitted that it would be wrong as a matter of policy for the court ordinarily to deprive a trustee of his or her indemnity, since it would encourage vexatious removal claims against trustees, who would have to “throw in the towel” in order to avoid exposure to a personal costs liability, even if the claim proceeds solely from a breakdown in relations caused by “human infirmity” rather than any positive misconduct on the trustees’ part. While I recognise that such cases are in a different category to cases of trustee misconduct and the like, I disagree that there is any general rule or policy that a trustee removed from office on the basis of hostility or a breakdown in relations should not be deprived of his or her indemnity. Equally, there is no universal rule that a trustee who is removed from office will be deprived of his or her indemnity. The issue remains whether the trustees’ resistance to the claim for their removal was in their own interests (as opposed to being in the interests of the trust), and whether it was unreasonable in all the circumstances.

• Finally, it is often the case (and it is the position in this case) that a claim to remove and replace trustees is brought on multiple grounds. Thus, a claim may be based on both allegations of breach of trust/misconduct, and on hostility and a breakdown in the relationship between the trustees and the beneficiaries. In relation to a hybrid claim of that nature, the court must assess the reasonableness of the trustees’ response to the claim as a whole. Such a claim may place the trustees in an invidious position: see Lewin on Trusts, at 48-086:

“[a] trustee who is faced with a claim for removal at the instance of beneficiaries who have animosity towards him, but base their claim on allegations relating to his conduct of the trusteeship which are not or may not be well founded, though he may not be anxious to continue in office, will be concerned that if he fails to defend and refute the allegations, he will be taken as acknowledging the allegations. In such circumstances, the trustee would be well advised to consider making an offer of settlement under Part 36 of the Civil Procedure Rules including positive proposals for the appointment of a new independent trustee of good standing in his place, with whom the beneficiaries might enjoy a better relationship, without in any way conceding the allegations of misconduct, and thereby protecting his position as to costs so far as possible.”

• I agree with the good sense of that suggestion, although a Part 36 offer is only one possible means by which the trustees might properly and reasonably respond to a claim for their removal.

Partial Indemnity and Trustees’ Costs

As it ordered full indemnity to the Trustees out of the estate in relation to their costs, the court did not have to consider the issue of partial indemnity. However, it did query whether a court has such a power, or whether it will be all or nothing and that point remains unresolved.

Part 36 and Removal of Trustees

The court said that it is often the case, as here, that a claim to remove and replace Trustees is brought on multiple grounds, for example allegations of breach of trust/misconduct and/or hostility and a breakdown in the relationship between the Trustees and the beneficiaries.

In relation to a hybrid claim of that nature, the court must assess the reasonableness of the Trustees’ response to the claim as a whole.

The court recognise that such a claim may place the trustees in an invidious position and quoted with approval from Lewin on Trust at 48-086:

“[a] trustee who is faced with a claim for removal at the instance of beneficiaries who have animosity towards him, but base their claim on allegations relating to his conduct of the trusteeship which are not or may not be well founded, though he may not be anxious to continue in office, will be concerned that if he fails to defend and refute the allegations, he will be taken as acknowledging the allegations. In such circumstances, the trustee would be well advised to consider making an offer of settlement under Part 36 of the Civil Procedure Rules including positive proposals for the appointment of a new independent trustee of good standing in his place, with whom the beneficiaries might enjoy a better relationship, without in any way conceding the allegations of misconduct, and thereby protecting his position as to costs so far as possible.“

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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Here, I look at the position where a claimant sends a Letter of Claim in a personal injury matter which matter subsequently settles for over £10,000 but under £25,000 and which could therefore have been brought within the low value protocol, generally known as the portals.

CPR 44.11 empowers the court to restrict costs to portal costs where it finds that a claimant acted unreasonably in not using the portal.

That decision must not be judged by hindsight and therefore, the fact that the matter is subsequently settled for a sum well below the portal limit is not determinative.

The claimant bears the evidential burden of justifying the non-use of the portal by reference to material available at the time, but the overall burden of proof rests on the defendant to show that it was unreasonable for the claimant not to use the portal and thus both parties bear a burden of proof in such a case.

The whole issue was recently considered at first instance level in

Hollingshead -v- Khan & Aviva Insurance Limited (County Court at Leeds, 14th October 2025)

I set out below my writeup of that case which appeared in Issue 399 at Pages 1,680 -1,681.

The key will be the contemporaneous Attendance Notes etc, and the material available to the claimant’ solicitors when choosing to send a Letter of Claim and on what basis the solicitor formed the view that the case would need for example, expert evidence making it unsuitable for the portal process.

I advise solicitors to write to the defendant’s solicitors essentially using the material set out in my piece and explaining why they made the decision to issue a Letter of Claim rather than use the Portal and ask the defendant to explain why they believed that the claimant’s solicitors acted unreasonably in not using the portal.

Costs are always in the discretion of the court, and I cannot guarantee that I any given case that will be successful, but there is a fair amount at stake, being the difference between Table 12 Fixed Costs and Portal costs.

The procedure for having the court determine issue of Fixed Costs is set out in the new Section X of CPR 45 at CPR 45.63 to 45.66.

My practical advice is to seek a compromise at a figure between Portal costs and Table 12 costs, and I suggest a Without Prejudice Save as to Costs offer of a sum midway between the two figures.

PORTAL COSTS ONLY WHEN MATTER WRONGLY BROUGHT OUTSIDE IT

In

Hollingshead -v- Khan & Aviva Insurance Limited (County Court at Leeds, 14th October 2025)

the court was considering the issue of whether the claimant’s solicitors had acted reasonably in commencing proceedings outside the Ministry of Justice Road Traffic Accident Portal and if not, whether their recoverable costs should be limited to the fixed costs, that is portal costs.

Here, the claimant’s solicitors valued the matter at over £25,000, which would take it outside the portal process and sent a Letter of Claim outside the portal process and damages were ultimately agreed at £16,000 with costs reserved for determination by the court, and that was by way of a Tomlin Order.

CPR 45.18 sets out the fixed costs recoverable for claims pursued within the RTA Protocol, generally known as the Portal, and CPR 45.19 deals with the recovery of reasonable disbursements.

CPR 44.11 empowers the court, where it finds that the claimant acted unreasonably in not using the Protocol to restrict costs to those fixed sums.

That applies even if proceedings have been issued as the argument is that had the matter been properly brought within the portal, then it may well have settled.

CPR 44.4 and 44.11 give the court a general discretion to limit costs where a party’s conduct is found to be unreasonable, including failure to comply with rules or protocols.

The court considered the authorities and because the test focusses on the claimant’s contemporaneous valuation and decision, the evidential burden lies on the claimant to justify non-use of the portal by reference to the material available at the time when the decision was made.

That decision must not be judged by hindsight, and therefore, the fact that the matter is subsequently settled for a sum well below the portal limit is not determinative.

The court here said that the claimant bears the evidential burden of justifying the non-use of the portal by reference to material available at the time, but the overall burden of proof rests on the defendant to show that it was unreasonable for the claimant not to use the portal and thus, both parties bear a burden of proof in such a case.

On the facts of the case, the court found that at the time of the Letter of Claim, the injuries did not objectively justify a valuation exceeding £25,000.

The court also pointed out that the portal process provides a safety valve for cases that become unsuitable as they progress and that there was no objectively reasonable basis at the outset, or by the time of the Letter of Claim, for the claimant concluding that the case could not have commenced within the Portal with the option to exit if it became unsuitable, for example, due to complexity or value.

The court also considered the fact that there is no obligation on a party to enter the portal once it becomes clear that the matter would be suitable for the portal.

The court said that that was not relevant as the court’s focus is on the original decision to proceed by way of a Letter of Claim rather than through the portal process.

The court held that the case should have started in the portal with the safety valve of exit if necessary.

The court therefore exercised its discretion under CPR 44 to limit the claimant’s recoverable costs to portal costs.

Here is a link to the decision in

Ferguson v Royal Borough of Greenwich [2025] EWCC 30 HHJ Brown

That was a decision on appeal to the Circuit Judge, and it will be see that the Circuit Judge upheld the District Judge’s finding that costs should be limited to Portal costs as the Judge found that the claimant had acted unreasonably following the EL/PL portal.

Each case will depend upon its facts, but this is a very lengthy Judgment – 42 pages – which is a detailed consideration of the issues.

Here is a link to the Judgment in

Johnson v Choice Support [2025] EWHC 1020 (SCCO) Deputy Costs Judge Erwin-Jones.

That was the decision of the Senior Courts Costs Office, and it came to a different view on the facts holding that it was not unreasonable for the solicitors to have valued the matter at above the EL/PL portal limit even though it was settled for £16,500.

Gordon Exall of Civil Litigation Brief fame had this to say:

The key element here for claimant lawyers is to make a careful and detailed contemporary note of the reason that you are concluding that the case falls outside the Protocol.  This contemporary evidence is of critical importance.  It is easy to criticise with the benefit of hindsight, however the court should be assessing the decision on the basis of the information reasonably available at the time. A detailed note, and even – as here – a letter to the insurers explaining the thinking behind the valuation, is of considerable assistance. This judgment also contains a review of the cases relating to one of the exemptions to the Protocol, these are worth reviewing.

I agree with every word of that.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

Subscriptions are £250 + VAT for 2026, which is over 100 issues. Buy here.

In

Executors of the Estate of Kenneth Collins v Chief Constable of Thames Valley Police [2026] EWHC 117 (SCCO)

the Senior Courts Costs Office was considering whether the successful claimant in a civil non-personal injury matter was entitled to costs on the standard basis or Fixed Recoverable Costs.

The issues were agreed as follows:

• Fixed Recoverable Costs are excluded by virtue of the fact that the substantive claim fell within the scope of CPR 26.9(10)(e);

• Fixed Recoverable Costs do not apply as the substantive claim was a non-personal injury claim that settled without proceedings being issued, per the transitional provisions set out in the Civil Procedure (Amendment No. 2) Rules 2023;

• Fixed Recoverable Costs were ousted by the express terms upon which the substantive claim settled in February 2023.

Fixed Recoverable Costs, CPR 45 and the scope of CPR 26.9(10)(e)

1. By CPR 45.43 (Fast Track) and 45.49 (Intermediate Track), FRCs are limited to claims “which would normally be for [are] allocated to the fast track/intermediate track“. Accordingly, pursuant to CPR 45, cases which would normally be or are allocated to the multi-track fall outside the scope of FRCs.

1. CPR 26.9 is entitled ‘Scope of each track’. Sub-paragraph (10), where relevant, provides:

            “A claim must be allocated to the multi-track where that claim is –

            …

                        (e) a claim against the police which includes a claim for –

                                    (i) an intentional or reckless tort; or

                                    (ii) …

On the facts here, the court held that the matter did fall within CPR 26.9(10)(e)(i) and therefore was not subject to Fixed Recoverable Costs and that was sufficient to dispose of the matter.

However, the court went on to consider the other two issues, the first of which was the vexed issue of whether Part 8 costs only proceedings amount to post-30 September 2023 proceedings so as to bring the matter within the Fixed Recoverable Costs scheme.

I have written extensively on this.

20.       The key terms are those set out in the transitional provisions provided by rule 2 of the Civil           Procedure (Amendment No. 2) Rules 2023 (‘the 2023 Rules’) (AB2):

            Transitional provisions

            2(1)      Subject to paragraphs (2) and (3), insofar as any amendment made by these Rules                       applies to –

                        (a) allocation;

                        (b) assignment to a complexity band;

                        (c) directions in the fast track or the intermediate track; or

                        (d) costs,

            those amendments only apply to a claim where proceedings are issued on or after 1st October     2023.

            (2)        The amendment referred to in paragraph (1) only apply –

                        (a)        to a claim which includes a claim for personal injuries, other than a disease                                 claim, where the cause of action accrues on or after 1st October 2023; or

                        (b)        to a claim for personal injuries, which includes a disease claim, in respect of                                 which no letter of claim has been sent before 1st October 2023.

The court set out the rival submissions and the relevant case law at length at Paragraphs 21 to 33.

The court held that Part 8 costs only proceedings do indeed bring the matter within the Fixed Recoverable Costs scheme.

34.          I am satisfied that the Claimant’s Part 8 costs-only proceedings issued on 31st December 2024 triggered the application of the FRC regime to this claim. I reject Mr Waszak’s submission that FRCs do not apply to this non-PI action, settled prior to 1st October 2023 without proceedings being issued. It is clear to me, on an ordinary reading of the transitional provisions in the 2023 Rules, that ‘claim’ includes Part 8 costs-only proceedings issued to obtain a costs order. No material distinction should be drawn between the substantive claim and costs only proceedings. There is instead a single, continuing claim, which subsists until all elements have been concluded. Costs-only proceedings accordingly comprise a claim for the purpose of the Rules. The Rules invoked procedural changes designed to implement an extension of the fixed recoverable costs regime. I am satisfied that such procedural matters do not violate the general principle of legal policy that changes in law should not take effect retrospectively. This court is not in any way bound by the decisions in Asmat Bi v. Tesco Underwriting Limited (ibid) and Bek v. Simsek (ibid), but it is reassuring nonetheless to see different judges, sitting in different courts reach the same conclusion, albeit in the context of different types of claim. I should not and do not place any reliance on the CPRC Minutes for 3rd November 2023. I do not find this outcome to be in any way unfair or ‘absurd’, as submitted by Mr Waszak. The transitional provisions implemented a relatively simple scheme which, inter alia, imposes a ‘bright line’ demarcation between FRCs and the previous regime. These changes were publicised well in advance and on the facts of this case the Claimant had eight months to issue costs-only proceedings prior to the 1st October 2023 commencement date. On this issue, for all these reasons, I prefer the submissions of the Defendant to those of the Claimant, so that the FRCs regime would have applied, but for my conclusions set out at paragraph 20 above.

Please note that the reference to Paragraph 20 in Paragraph 34 should in fact be to Paragraph 19.

Fixed Recoverable Costs ousted by the express terms on which the claim settled

• Pursuant to CPR 45.1(3), as upheld by the Civil Procedure Amendment Rules 2024 (made on 30^th January 2024), FRCs do not apply where the parties have expressly agreed they should not. Mr Waszak submits that the Claimant’s acceptance on 1^st February 2023 of the Defendant’s Part 36 offer made on 17^th January 2023 amounted to an express and effective ‘contracting out’ for the purposes of FRCs. This is because the offer, made on Court Form N242A, included the standard proviso that if the offer was accepted within the relevant period, ‘the Defendant will be liable for the Claimant’s costs in accordance with rule 36.13’. CPR 36.13(3) provides for costs ‘to be assessed on the standard basis, if not agreed’. Thus, notes Mr Waszak, by the acceptance of the offer, the parties had effectively agreed the Defendant would pay the Claimant’s assessed costs. Such ‘express agreement’, concludes Mr Waszak, ‘therefore ousts FRCs in any event’ (SA para. 48).

The Defendant’s submissions

• Acceptance of the Part 36 offer, submits Mr Hogan, did not amount to an agreement that the parties ‘contracted out’ of FRCs. Acceptance ‘simply gave the Claimant an entitlement to costs in accordance with CPR 36.13 (SA para. 58)’. Such entitlement is subject to the application of the rules as a whole. CPR 36, in any event, establishes a self-contained procedural code, meaning that its engagement cannot be construed as establishing some form of a contractual agreement or entitlement.

My analysis and conclusions

• Offer and acceptance pursuant to Part 36 cannot, in my conclusion, be construed as an effective ‘contracting out’ of FRCs. Quite apart from the fact that it invokes a procedural and not a contractual process, it is clear that the entitlement to costs conferred by 36.13 is simply a right to have those costs determined by the Rules. Thus, the wording of 36.13(3) includes the proviso: ‘Except where the recoverable costs are fixed by these Rules, …’. Insofar as the Claimant’s entitlement to costs could be otherwise fixed by the Rules to comprise FRCs, therefore, a Part 36 agreement cannot possibly be construed as a contracting out of this consequence.

Conclusion

• My conclusions are summarised as follows:

              (i)       This claim falls within the scope of CPR 26.9(10)(e)(i) and so FRCs do not apply. The         Claimant is entitled to an order for costs to be assessed on the standard basis, if not    agreed.

              (ii)      On the correct interpretation of the transitional provisions set out in the Civil      Procedure (Amendment No. 2) Rules 2023, FRCs would otherwise have applied, as the             Claimant’s Part 8 costs-only proceedings were issued after the commencement date       of 1st October 2023.

              (iii)     An agreement pursuant to CPR 36 cannot be construed as the parties contracting out      of the FRCs regime.

COMMENT

An important case, although the findings are obiter due to the matter not being in the Fixed Recoverable Costs scheme in any event.

The transitional provisions are hopelessly worded, but the courts generally are holding that the issuing of Part 8 costs only proceedings amounts to the post-30 September 2023 issuing of proceedings for the purposes of brining the matter within Fixed Recoverable Costs.

Effectively, this means that any non-personal injury civil litigation where costs have not been agreed is subject to Fixed Recoverable Costs as the paying party can force the receiving party to issue Part 8 costs only proceedings and thus bring the matter within Fixed Recoverable Costs.

As virtually everyone outside the Civil Procedure Rules Committee has commented, the sensible wording would have been to provide that any civil non-personal injury claims not issued by 30 September 2023 is subject to Fixed Recoverable Costs.

The Part 36 finding must be correct.

All that accepting a Part 36 offer does, is to entitle the receiving party to costs; it does not change the basis of those costs. 

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In 2025, Road Traffic Accident claims dropped by 14% to 282,248 and personal injury claims generally fell by 12% to 413,323.

In 2018, there were 876,562 personal injury claims of which 667,377 were Road Traffic Accident claims representing a drop of 53% for all personal injury claims and 58% for Road Traffic Accident claims.

These figures are from the Compensation Recovery Unit of the Department for Work and Pensions and is a trustworthy and independent source of statistics.

It is not known how much this fall has cost the government, and therefore, the taxpayer, in unrecovered benefits payments, and this represents a huge saving to insurers at the cost of the tax payer.

The reasons for the drop are widely considered to be the sharp cut of around 80% in damages for most whiplash claims, and the introduction of the disastrous and unintelligible online portal for handling lower value Road Traffic Accident claims and the related increase in the small claims limit for such claims to £5,000.

The number of accidents resulting in injury has not dropped.

All these matters are currently being reviewed by the Government. The uncertainty in the Intermediate Track as to which Complexity Band a matter will be assigned to is also causing problems and is also being reviewed by the Civil Procedure Rules Committee and the Ministry of Justice.

The Solicitors Regulation Authority is almost universally regarded as broken beyond repair and is almost certain to be scrapped by Parliament.

The Solicitors Disciplinary Tribunal is coming under increasing critical scrutiny by those who see it as not much more than an extension of the Solicitors Regulation Authority.

That may or may not be fair, and in fairness to the Solicitors Disciplinary Tribunal, it has often been critical of the Solicitors Regulation Authority.

However, the policy of One-Way Costs Shifting in the Solicitors Disciplinary Tribunal is regarded as grossly unfair by almost the entire legal profession.

Just to remind you that the massively resourced Solicitors Regulation Authority gets costs if it wins but generally does not have to pay them if it loses.

It is the equivalent of turning the Qualified One-Way Costs Shifting system in personal injury cases on its head so that the losing claimant has to pay costs, but the losing insurer does not.

In

Ashley Hurst v Solicitors Regulation Authority [2026] EWHC 85 

the Administrative Court, part of the High Court, set aside the orders of the Solicitors Disciplinary Tribunal and the

“decision and determinations on which they were based”.

IN what many, including the High Court, regarded as a bizarre prosecution and conviction, the solicitor had been fined £50,000 for the alleged misuse of a without prejudice email and ordered to pay costs of £260,000.

The allegation had been that the solicitor had improperly attempted to stop a solicitor and “tax commentator”, whatever that is when it is at home, from publishing or discussing correspondence from the solicitor concerning the tax affairs of his client, Nadhim Zahawi, the former Chancellor of the Exchequer.

This resulted from a political campaign by the Solicitors Regulation Authority to stop solicitors properly representing their clients in so called SLAPP cases, that is strategic litigation against public participation, whatever that is when it is at home.

Orwellian hardly begins to describe it.

The judge said:

 ‘This idea of a preoccupation with secrecy and stifling a right to publish – proposed by the SRA and adopted by the tribunal – was, in my judgment, insufficiently examined, accounted for, or evidentially supported in the tribunal’s analysis, and as such was replete with risk of unfairness to Mr Hurst and to the reaching of an unfair decision.’

The High Court said that the Solicitors Disciplinary Tribunal did not address itself correctly and relevantly to the law on confidentiality and without prejudice and

“unsurprisingly fell into error of law to the extent that it ostensibly had regard to it, sought to apply it, or rejected it as irrelevant”.

It described the conduct of the Solicitors Disciplinary Tribunal as troubling, specifically

“the vehemence and disparagement with which it [the wrong conclusion] was expressed”.

Its decision was “wrong and cannot be upheld” and its conclusions “unsustainable and troubling”.

“The decision challenged in this appeal was insufficiently analysed and reasoned vitiated by misdirection and error of law, and unfair.”

The solicitor victim of the Solicitors Regulation Authority and Solicitors Disciplinary Tribunal referred to this “long and stressful episode”.

It is not known whether he will issue personal injury proceedings against both or either body, neither of which has the immunity that some think that they have.

Although this was stated not to be a SLAPP case, the High Court’s ruling leaves it political campaign in tatters and it has now lost every SLAPP case.

I do not like acronyms – very Orwellian – but SLAPP could stand for

Stop Lawyers Acting Properly and Professionally.

Given this very strong attack on both bodies by the Administrative Court, it is hard to see how serious disciplinary action against the Solicitors Disciplinary Tribunal members involved can be avoided.

The Solicitors Regulation Authority is a law onto itself and we need emergency legislation to scrap it.

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Here is a piece I wrote in 2019

As we gear up for the whiplash tariff under the Civil Liability Act 2018, it is worth remembering that this is not the first personal injury tariff in this country, and indeed the concept goes back nearly 1,500 years.

I am grateful to Lord Justice Irwin for the idea for this piece and to Harvard University for much of the information.

King Aethelberht of Kent, who reigned from 560 to 616 created an extremely extensive tariff for damages for personal injuries, and some of the examples below show the prevalence of knife, or sword, crime at the time.

Under Section 37 of the code “if a shoulder becomes lamed, let him pay 30 shillings.”

In 7 th Century Kent a shilling was a measure of 1.3 grams of gold.

Currently gold is valued at around £22 a gram, so a shilling was worth around £29.

Thus 30 shillings is around £870, the equivalent under the proposed Civil Liability Act 2018 whiplash tariff to a 9-12 month injury.

Other awards included:

Stabs To The Thighs

• one to two inches deep 1 shilling;
• two to three inches deep 2 shillings;
• three inches deep 3 shillings;
• loss of little finger 11 shillings;
• loss of four front teeth 6 shillings;
• piercing through a generative organ 6 shillings;
• any injury requiring medical treatment 30 shillings;
• eye-gouging 50 shillings;
• broken jaw bone 20 shillings;
• broken arm 6 shillings

Toes, other than the big toe, attracted an award of half the compensation for the corresponding finger.

Bruises were compensated differently depending on whether they were visible outside ordinary clothing, so vanity clearly paid a part in awards, even in the 6th Century.

Indeed there was a specific award for minor disfigurement of appearance, and that was 3 shillings, with 6 shillings being the appropriate sum for greater disfigurement of appearance.
The amount to be paid for the death of a person was also standardised and depended upon the status or inherited rank of the deceased, and could be as high as 1,200 shillings.

Under King Alfred of Wessex, who reigned from 871 to 899, the law accommodated Britons that is Celts not Saxons, who were all referred to as Welshmen and the tariff for a Welshman who died, with no land, was 60 shillings.
Kind Alfred’s code also provided for staged payments.

Aethelberht’s code is believed to be the first example of law being written down in this country and it is thought that a fixed tariff was promulgated to avoid haggling and bargaining between quarrelling families and the fixed financial compensation was introduced as an alternative to retaliation and feud.

Under Aethelberht’s code there was also compulsory arbitration in certain cases, so under Section 65 1 “if he becomes lame, then friends must arbitrate.”

One Way Cost Shifting was not introduced until 1277, by the Statute of Gloucester, but that subject is for another day.

There really is very little new under the sun.

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The insurers of Axiom Ince have issued proceedings against the Solicitors Regulation Authority alleging negligence in failing to prevent client account money of £64.5 million going missing. Axiom Ince went into Administration in October 2023.

The Solicitors Regulation Authority became involved in June 2022 when an Axiom Ince employee resigned and the firm self-reported over concern regarding client account money payments.

The Solicitors Regulation Authority decided to take no action and Axiom continued to trade and received money into client account, which then went missing.

It is alleged in the professional negligence claim that the SRA’s forensic investigation officer reviewed documents on site but did not check off the stated balance of the purported client accounts against bank statements provided to them.

The claim states that it was reasonable for the firm  to rely or depend on the SRA to investigate Axiom with ‘reasonable care and skill and to place reasonable reliance and/or dependence on its conclusions’.

The SRA did not insist on existing client accounts being frozen and the remaining directors believed they were allowed to proceed on a ‘business as usual’ basis. From 27 July 2023 to October 2023, the amount held in Axiom’s client account reduced from £23.5m to £2.2m.

The claim states that the SRA was in breach of its duty of care by not intervening in the firm  when it suspended the three individuals. This failure included failing to advise Axiom not to receive or pay out sums from the client account during August and September 2023.

The particulars of claim states that Axiom is entitled to compensatory damage for negligence. The claimant also seeks an order for contribution under the Civil Liability (Contribution)Act 1978.

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The Solicitors Disciplinary Tribunal has ordered the Solicitors Regulation Authority to pay £159,242 costs to a solicitor in relation to what it termed a “fundamentally misconceived” prosecution and where it found that the Solicitors Regulation Authority’s case was so weak that they stopped the case at half time without hearing the defence.

The solicitor concerned was admitted 39 years ago and the Solicitors Disciplinary Tribunal found that far from concealing matters from her client, she was trying to explain the issues to the client as shown by her advising the clients to seek independent legal advice.

Lawyers for the solicitor said that she had suffered extreme stress and  her health had suffered.

It is not known whether the solicitor is bringing personal injury proceedings against the Solicitors Regulation Authority.

A successful defendant in Solicitors Disciplinary Tribunal proceedings is not normally awarded costs, whereas the Solicitors Regulation Authority is, if successful.

However, the Solicitors Disciplinary Tribunal departed from the usual rule as the prosecution

“lacked any proper foundation in law or fact”.

It added:

The present allegation was fundamentally misconceived and could not succeed on any reasonable interpretation of the evidence. While the tribunal accepted that the SRA was acting in the exercise of its regulatory function, it concluded that the decision to prosecute in these circumstances fell outside the bounds of what was reasonable.

There is a rich irony if personal injury proceedings are issued here as the position is reversed.

The solicitor, if successful, will recover her costs, but due to Qualified One-Way Costs Shifting, she will not have to pay costs to the Solicitors Regulation Authority if unsuccessful.

At the end of this issue of the Newsletter I set out readers’ comments on the original Law Society Gazette article.

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Here is a reprint of an old piece. This Judge is now the Master of the Rolls… but has just announced his retirement…

In a bizarre speech) delivered to The Law Society on 8 May 2018, the Chancellor of the High Court, that is a High Court Judge, suggested that there may be benefits if it were made a criminal offence in this country not to carry a mobile phone at all times. He said:

“33. Despite this, I think there will be far fewer contested criminal cases in the future, mainly because of the surveillance of which I have already spoken. We have recently seen the impact that digital disclosure of mobile phone records has had on rape prosecutions. One change in behaviour is already having a big impact on the eradication of contested criminal cases. Most people carry their smartphones on their person at all times with their GPS location switched on. They do this voluntarily, but if the legislators were, for example, to require citizens to carry phones at all time, it would be even more difficult to avoid detection. With or without such o rule, as the location of all persons is continuously uploaded to the cloud, there will anyway be far fewer identity issues in criminal cases. As society seems to accept more and more surveillance, I wonder how radical the change I have mentioned will seem to the population in 10, 15 or 20 years’ time.”

My first thought was that this was an ironic piece highlighting how Orwellian society is becoming; I am well used to my own irony being treated as serious proposals.

However, I am assured that Sir Geoffrey Vos was not being ironic, and indeed the rest of the speech is in similar vein.

His apparent detachment from reality as far as the court system is concerned is shown by these observations on litigants in person:

“35. This online world has allowed the litigant in person to flourish. Indeed, many of the online dispute resolution processes are designed to allow individuals to deal by themselves with their small legal cases.”

I am unaware of any other member of the judiciary who shares this view. Indeed there is overwhelming evidence, from both the criminal and civil judiciary, that litigants in person are struggling to get justice, while at the same time slowing down the whole court process.

The whole speech is l]_erg and is worth reading, in the same way that George Orwell’s 1984 is worth reading.

Take this:

“Lawyers at all levels must start to demonstrate that they are thinking ahead and, most of all, embracing innovation across the board.”

That statement assumes that innovation = good, and that tried and trusted = bad.

A moment’s thought shows that this is illogical, and plain wrong.

It echoes Lord Justice Munby’s recent suggestion that we should ask litigants whether they want to walk a total of 24 miles to court and back, or want to access the court online.

No suggestion that may be the one thousand year old system of having local County Courts – the giveaway is in the name – is what people want.

No, of course not, as old= bad.

In fairness to Lord Justice Munby he made these comments against his own statement:

“Anyone who thinks we currently have a network of courts which enables proper access to justice is deluding themselves. I was told that somebody the previous week had walked for 12 miles to get to court and at the end they had to walk 12 miles back home. That is the reality of our present justice system.”

Lord Justice Munby may well have been being ironic.

Imagine a supermarket chain running a campaign along the lines of:

“We are closing loads of our supermarkets, which you paid for in the first place, and we will charge up

to £10,000 to shop with us.

What we need to know is whether you wish to walk to our nearest store, which will be 12 miles from you, or just trust your luck online.”

Now, we know that no one ever visits a supermarket personally; that is why they are open 24 hours a day and the car parks are full.

Vos suggests that his views had the backing of the American Bar Association, quoting Rule 1.1 Comment 8 of the Model Rules of Professional Conduct.

I think not.

The statement there that lawyers must “keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology” is hardly the same as “embracing innovation across the board” is it?

In particular the American Bar Association specifically warns that lawyers must be aware of the risks associated with technology.

In discussing Artificial Intelligence Vos says:

‘This latter [AI] is where machines can perform the kind of intellectual decision making that we normally associate only with humans: for example, the decision of a judge to choose between a/locating the custody of a child to her father or her mother, or the decision as to what happened at a contested business meeting.”

This is a telling quote. Surely the whole point of judges, and for that matter politicians, priests, doctors, teachers, police officers etc., is that we often need something other than “intellectual decision making” – something less tangible but more valuable, including wisdom.

For a senior member of the judiciary to equate a dispute as to what happened at a business meeting with the issue of the custody of a child is unfortunate.

I literally started laughing out loud when I read this at paragraph 20:

20.       Moreover, we will need to become increasingly aware of the dangers of contract automation,      as algorithmic trading increases. It now accounts for some 50% of trades on the S&P 500 and             is already credited with having accelerated recent market collapses across the globe.”

Well that is alright then. A global world market collapse is a small price to pay for closing a few courts and saving a few quid on a legal transaction.

Does it not ever occur to the learned judge that people are better off paying a bit more for services and avoiding the collapse of the banking system, together with the consequent cost of nationalising it and the loss on denationalising it?

What about this:

“It will be very rare to have a face to face interview with a lawyer in relation to a legal problem.”

We will see.

Vos also refers to meeting Richard Susskind in 2006, when Susskind predicted that all conveyancing, family law, wills, probate, personal injury and administrative disputes would be advised upon and dealt with online for no charge.

Really?

Vos also, and I am sure it is through ignorance and not an attempt to mislead, equates the drop in conveyancing fees with automation since 2006.

Well conveyancing fees started dropping in the 1980s, and are now increasing again as people realise that you get what you pay for.

The cheap, automated firms, are those going bust.

Vos’ reference to “small legal work” in paragraph 36 is telling; we do not want the plebs having lawyers; only rich corporation should have lawyers and courts and judges.

“Also, unless human nature changes more radically than I expect, I would therefore predict that some advice will still be required about transactions that have either produced that were expected to produce profits or losses.”

But not, presumably, in relation to family matters, custody disputes, immigration, human rights, freedom of speech or employment etc. – the small law for small people.

It may well come as a surprise – or maybe not if you have read this far – that Russia is a role model here:

“46. … I was surprised to learn a few years ago that there were 11,000 regulated advocates in Moscow, but some 50,000 unregulated so-called “business lawyers”. It may well be that we will need a cadre of business advisers with excellent technological and IT skills and an understanding of the law, but rather less fully trained legal experts.”

I was unaware that Russia was regarded as a model of good legal and business practice with no problems of corruption or deregulation.

In the Transparency International Table of Perceptions of Public Corruption, Russia ranks 135 out of 180.

North Korea and the Soviet Union also appear as role models:

“Once greater surveillance becomes the norm, the low of evidence may become less central, and lawyers less indispensable to dispute resolution in this area.”

As a New Year treat, I suggest that the Chancellor of the High Court read the Glass Bead Game, written by Hermann Hesse during the Nazi control of Europe, and disposing, one had hoped for ever but obviously not, with these theories.

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In

Vehicle Control Services Ltd v Langley [2026] EWCC 1

the County Court considered the issue of Rights of Audience in small claims trials, and in particular whether a non-exempt unauthorized person has the right to appear as an advocate in such trial.

This issue was not considered in

Mazur & Anor v Charles Russell Speechlys LLP [2025] EWHC 2341 (KB)

but is clearly related to the policy behind the Mazur decision and this issue may well be considered by the Court of Appeal in the Mazur appeal and it is to be hoped that the Court of Appeal gives wider guidance, albeit some of it may be obiter.

This decision is District Judge level but runs to 20-pages and is a comprehensive analysis of the law in this field.

The starting point is that in a small claims track trial, anyone can appear as an advocate, even on a paid basis, but this is subject to conditions, and here the court was considering whether those conditions were satisfied.

Here, a representative from an “advocacy firm” which was not on the record in the matter, and that advocacy firm was instructed by the firm on the record who in turn had been instructed by the claimant, Vehicle Control Services Ltd.

The claimant did not attend the trial, and that is a key point, and the representative was not an authorized person under the Legal Services Act 2007.

The court held that that individual did not have a Right of Audience, and gave detailed reasons, and conducted a detailed analysis of the relevant law which I look at below.

I dealt with the general issue of Rights of Audience in my piece:

RIGHTS OF AUDIENCE AND MAZUR

which appeared in Issue 377 at Pages 1,053 – 1,060.

I dealt specifically with the issue of Small Claims Track Matters and Mazur and that was in Issue 392 at Pages 1,391 to 1,393 and I now set that piece out as background to this Judgment, and indeed, the Judgment appears to have drawn from this piece.

SMALL CLAIMS TRACK MATTERS AND MAZUR

The issue of Small Claims Track matters is coming up frequently and affects a huge number of cases as the starting point is that all matters valued at £10,000 or less are allocated to that track, with different rules for personal injury matters.

Schedule 2, paragraph 4 of the Legal Services Act 2007 defines conduct of litigation as follows:

• the issuing of proceedings before any court in England and Wales,

• the commencement, prosecution and defence of such proceedings, and

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

(2) But the “conduct of litigation” does not include any activity within paragraphs (a) to (c) of sub-paragraph (1), in relation to any particular court or in relation to any particular proceedings, if immediately before the appointed day no restriction was placed on the persons entitled to carry on that activity.”

The Small Claims Track is just that, it is a track within the conventional court system, and although people sometimes refer to the “Small Claims Court”, there is no such thing in England and Wales, and there is no doubt that issuing proceedings in a matter which is then allocated to the Small Claims Track is indeed the issuing of proceedings before any court in England and Wales as defined by paragraph 4(1)(a) above.

However, paragraph 4(2), which is very difficult to follow provides that none of the activities in paragraph 4(1) count as the conduct of litigation if immediately before the appointed day for the Legal Services Act to come into effect, no restriction was placed on the persons entitled to carry on that activity.

That is the paragraph that has led many of us to conclude that Mazur & Anor v Charles Russell Speechlys LLP [2025] EWHC 2341 (KB)  is wrongly decided as anyone who could conduct litigation before the Act could continue to conduct afterwards, including employees of firms of solicitors.

However, for the purposes of the Small Claims Track only there is an entirely separate provision in the Civil Procedure Rules which makes it clear that anyone can appear as a representative at a trial or hearing in the Small Claims Track, but there is nothing in relation to the conduct of the litigation, so the Legal Services Act 2007 and Mazur apply to the Small Claims Track as much as it does to other civil litigation.

The right of anyone to appear as an advocate is due to the Civil Procedure Rules, and in particular Practice Direction 27A which I will now look at in detail, and that person need not have any connection with a law firm and does not need to be insured.

A Practice Direction is not the law, as the courts have repeatedly made clear, but there is no doubt that prior to the appointed day for the Legal Services Act 2007, lay representatives could appear, including for profit, in the Small Claims Track and therefore paragraph 4(2) allows that.1,391

It is not as straightforward as that, as it could be argued that “any particular proceedings” means an actual case, and not the class of case, and that it was a transitional provision, but it does not appear under the transitional provisions.

There is a further point, and that is that when proceedings are issued, the matter is not in the Small Claims Track and only goes into that track once the court allocates the matter.

Having said that, allocation is retrospective in the sense that the costs consequences, and procedure etc., are governed from the beginning by the first allocation to track, and I need not here get into what happens if the matter is re-allocated.

Practice Direction 27A does not as such allow a non-lawyer to conduct the litigation but rather allows representation at a hearing and that is governed by paragraph 3 which reads:

“Representation at a hearing

3.1 In this paragraph:

(1) a lawyer means a barrister, a solicitor or a legal executive employed by a solicitor or any other person authorised under the Legal Services Act 2007 to act as a litigator or advocate; and

(2) a lay representative means any other person.

3.2

(1) A party may present his own case at a hearing or a lawyer or lay representative may present it for him.

(2) The Lay Representatives (Right of Audience) Order 1999 provides that a lay representative may not exercise any right of audience:–

(a) where his client does not attend the hearing;

(b) at any stage after judgment; or

(c) on any appeal brought against any decision made by the district judge in the proceedings.

(3) However the court, exercising its general discretion to hear anybody, may hear a lay representative even in circumstances excluded by the Order.

(4) Any of its officers or employees may represent a corporate party.”

The Lay Representatives (Rights of Audience) Order 1999 reads:

“1. This Order may be cited as the Lay Representatives (Rights of Audience) Order 1999 and shall come into force on 18th May 1999.

2.  The Lay Representatives (Rights of Audience) Order 1992(2) is hereby revoked.

3. —(1) Subject to paragraph (2), any person may exercise rights of audience in proceedings dealt with as a small claim in accordance with rules of court.

(2) A lay representative may not exercise any right of audience:–

• where his client does not attend the hearing;

• at any stage after judgment; or

• on any appeal brought against any decision made by the district judge in the proceedings.”

Thus, the position is that there are three stages in a matter that ends up a Small Claims Track trial:

1. Pre-action work;

2. work between issue and trial;

3. the trial or hearing.

In relation to pre-issue work I refer to my piece:

Pre-Issue work and Mazur

which appears in this Issue.

There is then a lacuna as once proceedings are issued that is unquestionably the conduct of litigation and requires an authorized person, or an exempt person to conduct that litigation, and that makes sense, because as stated above, at that stage the matter is not a Small Claims Track matter; that will occur when the court allocates the matter.

Once the matter is allocated to the Small Claims Track then only an authorized or exempt person can conduct that litigation, but of course the individual can conduct it as a litigant in person.

A lay representative, that is anyone at all, who is not a lawyer as defined in paragraphs 3.1 of Practice Direction 27A above can represent the litigant in person, and can charge for that representation.

Nothing in the Civil Procedure Rules or Practice Directions gives a person who is not an authorized person the right to conduct litigation in Small Claims Track matters, but rather only the Right of Audience.

It may well be that a court where an individual regularly appears as a lay representative may be inclined to grant that person exempt status under Schedule 2(2) of the Legal Services Act 2007 which provides:

“(2)The person is exempt if the person—

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

(b)has a right of audience granted by that court in relation to those proceedings.”

A non-authorized, non-exempt person or body cannot go on the record as acting for a party in the Small Claims Track.

Vehicle Control Case

The court recited the history of managing clerks attending hearings, although unqualified, and pointed out that many of these administrative hearings are not now conducted by the judiciary but are undertaken by Legal Advisers who are Proper Officers as an administrative function, rather than a judicial function.

The court then had this to say:

Against that context some agencies offer advocacy-only services for more straightforward County Court hearings by instructing unqualified individuals on a contractor basis to attend hearings. They are self-styled ‘Solicitor’s Agents’. That term does not appear in any legislation and is described in the White Book as ‘misleading’ (infra). It refers to unqualified advocates rather than regulated professionals. They often provide advocacy-only services to other bulk-work solicitors or large in-house legal teams.

The question is whether this style of ‘Solicitor Agents’ have a right of audience at this hearing, acknowledging always that the judge has a discretion to allow an unqualified person to appear nonetheless.

A Solicitors Agent’s only arguable general right to appear – unless it is a specific case where it is allowed – derives from being an Exempt Person under Schedule 3 of the Legal Services Act 2007 (‘the Act’). This exemption historically stems from solicitors sending their (often unqualified) managing clerks to handle basic matters in what were termed ‘chambers’ hearings under the old County Court Rules (CCR)—a term now absent from the Civil Procedure Rules (CPR) and Family Procedure Rules (FPR).

The court then quoted from the commentary in the White Book which it regarded as insightful and it is indeed a helpful analysis of the legal position:

“…The combined effect of 2007 Act, ss.13, 19, and Sch.3 para.1(7), is to provide that in certain circumstances a person “whose work includes assisting in the conduct of litigation” is an exempt person for the purpose of exercising a right of audience. Before the Courts and Legal Services Act 1990 came into effect, solicitors’ general rights of audience in the High Court and county courts when sitting in chambers, extended to their responsible representatives; particularly to solicitors’ clerks and legal executives, and to persons providing clerk’s services and who were not employed but acted under instructions. There was no such right in open court although, in the exercise of a discretion, a judge could grant this. These statutory provisions were designed to preserve that position and must be seen against that background.

Some unqualified persons who offer advocacy services describe themselves as “solicitor’s agents”. This is a misleading term in this context as it implies an authority which does not exist. “Solicitor’s agent” is not a term used in the 2007 Act. Such persons are generally self-employed and obtain work through an agency. Being unqualified they are not subject to the disciplinary process of any profession. Importantly, they are not “authorised persons” within s.18 of the 2007 Act nor “exempt persons” within s.19 and Sch.3 para.1(7) states that a right of audience accrues to such a person when they are: assisting in the conduct of litigation …; acting under the instructions and supervision of an authorised litigator e.g., a solicitor; acting in proceedings that are being heard in chambers and which are not reserved family proceedings …” (my emphasis)

The court said that the term “Solicitors Agent” is misleading and that the correct term is Exempt Person and looked at Schedule 3, Paragraph 1(7) of the Legal Services Act 2007, which I have examined in detail in the link to the piece

 Rights of Audience and Mazur.

The court also said that under the Civil Procedure Rules, anyone may represent a party as a small claims track trial, provided the lay client attends. (my bold)

That was a key point here as the advocate from the advocacy firm was neither exempt nor an authorized person and one of the pre-conditions of a lay person representing a client at a small claims track trial is that the lay client also attends.

That stems from

The Lay Representatives (Rights of Audience) Order 1999, which reads in part:

(2)  A lay representative may not exercise any right of audience:–

            (a)where his client does not attend the hearing;

….

Employees of Housing Management Bodies have a specific exception for possession and certain injunction proceedings, and the courts also have a discretion who grant Rights of Audience to any person.

The court here also dealt with the case of

Halborg v Apple (2022) (unreported)

which the court said is often relied on to justify Rights of Audience and is often misquoted.

1. Of recent note is Halborg v Apple (2022) (unreported). It is often relied on to justify rights of audience, and it is often misquoted. The Solicitors Agent in Halborg was contracted to attend by LPC Law Limited. LPC Law Limited were actually on record for Apple via SCS – a trading style of that company – and providing litigation services. However, one needs to read the amended transcript to discover that nuance. So, it was not a typical advocacy-only Solicitor Agent arrangement. This limits its relevance to Solicitor Agents rights more generally.

1. Additionally the decision is not binding and has it’s own problems. It held that advocacy was in itself ‘assisting in the conduct of litigation’. With respect to the Circuit Judge, I fundamentally disagree. The Act makes it clear that ‘conducting litigation’ and ‘exercising rights of audience’ are two quite different things. In my view, the Act is aimed at Legal Executives (without authorisation in their own right) and what used to be termed ‘managing clerks’ who are employed or retained by a Solicitor to assist with litigation generally. Consequently, Halborg has significant limitations to its use in assessing these issues.

There is no doubt that had the claimant attended the hearing, then the advocate here would have had a Right of Audience, but in the absence of the claimant attending, and in the absence of the advocate being an authorized person, the only way he could have Rights of Audience was by being an exempt person.

At paragraph 17, the court here set out the condition to being an exempt person –

17. Consequently, to be an Exempt Person, that individual must be;

17.1. assisting in the conduct of litigation (the First Condition),

17.2. acting under the instructions and supervision of an authorised litigator acting in proceedings (the Second Condition),

17.3. being heard in chambers (the Third Condition), and

17.4. which are not reserved family proceeding (the Fourth Condition).

The court pointed out that the exempt persons meet all four these criteria and it then looked at them in detailed and helpful analysis.

The First Condition – assisting in the conduct of litigation

19. The First Condition is that the person in question must be assisting in the conduct of litigation. The Act as considered by Mazur sets out what that may be. ‘The conduct of litigation’ is defined by paragraph 2 of schedule 2 to the Act as ‘…the issuing of proceedings…the commencement, prosecution and defence of such proceedings, and…the performance of any ancillary functions in relation to such proceedings (such as entering appearances to actions).’

20. That must be more than advocacy alone. I respectfully disagree with that element of Halborg. Otherwise, the distinction between litigation and advocacy would vanish. It would become self-proving; anyone attending purporting to conduct advocacy would automatically be an Exempt Person by reason of undertaking that advocacy.

21. To meet the First Condition the Exempt Person must factually establish that they have assisted in the conduct of the litigation to a sufficiently meaningful degree.

The Second Condition: Acting under the instructions and supervision of an authorized litigator acting in proceedings

22. The Second Condition is to establish that the Exempt Person is working under the instructions and supervision of the authorised litigator in the proceedings. In my view, that is Lord Bingham’s ‘managing clerks’ model that was intended to be retained by Parliament. Factually, that must demand some nexus between the Exempt Person and the supervising solicitor conducting the litigation of a sufficient degree to approximate that traditional role of ‘managing clerk’ or equivalent.

Chambers

23. The Third Condition is that the relevant hearing is taking place in ‘chambers’. This is more difficult to define. The problem is that Parliament adopted the term ‘chambers’ in 2007 when it had become defunct in 1999 when the CPR was introduced. In ‘chambers’ is a term not defined by the Act and not recognised by the CPR. CPR r. 39.2 has done away with the CCR definition of in ‘court’ or in ‘chambers’. That definition was removed some 8 years before the Act.

24. It seems obvious to me that Parliament did not intend ‘chambers’ to refer to the type, size or geographic configuration of the room the hearing happens in. Nor must it matter whether it is in Private or Public. It must have been intended for a shorthand for a set of appropriate hearings.

25. On the one hand, it may have been Parliament intended ‘in chambers’ to mean any identified exceptions in the CPR/FPR where unqualified individuals are permitted to attend under the procedure rules. For example, small claims trials or Housing Officers in possession claims. However, it seems to me unlikely that Parliament would ever have included such an exception in this way. I would have expected Parliament to have more expressly delegated authority to the respective rules committee to specify any exceptions.

26. On the other hand, and more realistically, it seems to me Parliament must have intended to continue the commonly understood practice of solicitors sending their ‘managing clerks’. As such, adopting ‘in chambers’ as a shorthand. A shorthand for hearings of an administrative type and quality that would have been usually ‘in chambers’ under the old CCR.

27. That definition is unsatisfactory in its lack of clarity. Further, the lens of history makes the view cloudier. The jurisdiction shift of the District Judge role has removed many of the old CCR ‘in chambers’ hearings from the District Bench altogether. The very straightforward matters historically attended by the ‘managing clerks’ have been removed piecemeal from the District Judge’s role and are now handled by Legal Advisers or Proper Officers as an administrative function. Third party debt orders, charging orders, directions in small value small claims cases, and the like, now only come to the District Judge in unusual circumstances. So, the practice that Parliament intended to retain, has been gradually eroded from the Court arena in any event.

These were not reserved family proceedings and therefore that point is not relevant here, and the court did not deal with it in detail.

The court then dealt in detail with the general principle that anyone can attend and represent a party at a small claims trial and noted the qualification that that only applies if the lay party also attends the hearing.

Attendance at a Small Claim Trial

29. An alternative route is that anyone can attend and represent a party at a small claims trial. Under CPR 27APD.3 any party may have a Lay Representative. That is qualified by para3.2(2) requiring that a party may have a lay representative only if the lay party also attends the hearing under the Lay Representative (Rights of Audience) Order 1999. Additionally, attendance could be by an officer or employee of the Claimant company (none of which applies here).

30. As the White Book 2025 n 27.9.1 makes plain, ‘attendance by a [qualified] legal representative is attendance by the party for the purpose of this rule: Owen v Blackhorse Ltd [2023] EWCA Civ 325. Parties in person cannot give written notice of their no attendance but then attend the hearing by way of a lay representative appearing on their behalf.’ In Owen v Blackhorse attendance at first instance was by a qualified solicitor before DDJ Sandercock.

            viii. Interaction of CPR 27.9 and 27.11

31. Today the advocate also advanced an argument that, when read together, CPR 27.9 and 27.11 mean a party is present if the lay client is absent and an unqualified advocate is present. With respect, I struggled to follow that logic and cannot see that could ever be correct. CPR 27.9 allows a party to absent themself at a small claims trial and ask the court to deal with the hearing on their papers (the other party may or may not attend at their discretion). Equally, CPR 27.11 speaks of a re-hearing in absence. I am afraid I struggled to follow all the steps in the argument, because if that reading was correct it would justify the paradox of attendance by non-attendance.

32. Equally, the advocate referred me to Rouse v Freeman [2001] EWHC J1130-10 which in my view adds little. That simply says that a hearing may proceed if the party is represented by qualified lawyers but if the lay client is absent. In my view, nothing to do with any exemption to the rules about rights of audience.

The court held that the advocate was not an exempt person as he only met the third condition of the matter being in chambers, not the first condition for assisting in litigation nor the second condition relating to supervision and instruction.

The court also said that it was not asked to grant a special Right of Audience, but had it been so asked, it would have been slow to do so stating that that is a rare exception for fact specific reasons.

Much of the Judgment involves looking at the accountability of non-authorized people employed by law firms and the fact that the las firms themselves are subject to professional discipline etc.

Courts will be much slower to grant Rights of Audience to people not employed by disciplined, regulated, and insured law firms.

52. From the review of the authorities, and in my view, it has become clear that the purpose of the exception was to continue the long running practice of managing clerks attending administrative hearings. It was not to drive a coach and horses through the requirements of qualification as a lawyer. This particular ‘Solicitor Agent’ model is most akin to a barrister’s chambers where junior barristers attend routine court hearing, albeit with unqualified advocates.

53. The requirements of legal qualification include not just professional insurance, and a base line of knowledge and experience. It is that each individual advocate in our adversarial system is constrained by the professional codes of conduct to act in a recognised manner. For example, not to mislead the court. That is backed by a regulatory framework of professional complaints, and enforcement by regulatory action; not just inhouse procedures. It was exactly the fact of direct supervision that ensured that the traditional managing clerk was equally constrained in Lord Bingham’s view.

54. Equally, it is to distort the purpose of Sch3, para 7 beyond recognition that the traditional role of an inhouse managing clerk undertaking the routine work before the District Judge be extended into a wholesale unqualified advocacy scheme.

COMMENT

This is an important, and in my view, entirely accurate Judgment which not only sets out in detail the law, but also the policy decisions behind the law and the rules.

The direction of travel of the judiciary is against the deregulation of the Civil Litigation system for commercial gain, and that was highly relevant here.

Mazur involved different considerations in that the individual there was employed by a regulated, disciplined, and insured law firm.

It is to be hoped that the Court of Appeal will give detailed guidance in relation to all of these issues and it may be that they will draw the line between individuals employed by regulated law firms and those who are not.

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In

Willers v Joyce & Ors [2019] EWHC 937 (Ch)

the High Court held that correspondence marked “without prejudice save as to costs” was admissible in a subsequent application for non-party costs under section 51 of the Senior Courts Act 1981.

The lawyers represented the claimant in a failed action against the applicants for malicious prosecution and the claimant was ordered to pay the applicants’ costs but the claimant had no money.

The applicants claimed their costs from the lawyers on the basis that those lawyers had a substantial financial interest in the outcome of the claim, as the damages claimed represented costs owed by the claimant to the lawyers in the related proceedings.

The applicants argued that correspondence marked without prejudice save as to costs between the respective firms of solicitors concerning a failed mediation, was admissible as evidence of the respondent lawyers’ attitude to the litigation.

The High Court held that the evidence was admissible solely on the basis that the parties had agreed that the correspondence could be used in the context of an argument about costs.

The High Court did not accept that, by marking the correspondence without prejudice save as to costs, the respondent lawyers were confining the relaxation of the without prejudice rule to the hearing of an application for costs against the claimant.

The High Court did however reject the argument that the correspondence fell within the “independent fact” exception to the without prejudice rule identified in

Muller v Linsley & Mortimer [1996] P.N.L.R. 74.

The High Court did not see how the extent of the influence the respondent lawyers had over the claim, could properly be separated from the content of the settlement negotiations themselves.

Admitting evidence for this purpose would undermine the policy underlying the without prejudice rule and lawyers would not be able to speak freely about settlement if they thought that that information could later be used in costs proceedings against them.

Relying on the recent case of

Briggs v Clay [2019] EWHC 102 (Ch) (25 February 2019)

the High Court held that there was no reason why the without prejudice protection afforded to the claimant could not be relied upon by his legal representatives in a subsequent action for costs in the same action, made against them personally, under the section 51 procedure.

However, in this case, that protection had been waived.

The judgment contains a detailed analysis of the without prejudice rule and, as set out above, refers to the recent decision in Briggs v Clay where the rule was also looked at in detail.

The effect of this decision is that “without prejudice save as to costs” excludes from protection section 51 applications as well as ordinary between the parties’ costs issues.

If a party did not wish to waive the without prejudice rule for section 51 purposes it would need to use wording such as:

“Without prejudice save as to costs between the parties, but still without prejudice in relation to applications under section 51 of the Senior Courts Act 1981”.

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I get a lot of enquiries about this issue and therefore republish this earlier piece, which remains the correct statement of the current law.

In Chapter 23 of my book, Personal Injury Small Claims, Portals and Fixed Costs, I deal at length with the issue of when a bankrupt or discharged bankrupt can nevertheless personally receive damages, that is circumstances where damages do not vest in the trustee in bankruptcy.

Here I am dealing with the other side of the coin, that is the issue of when an award can be enforced against a bankrupt or discharged bankrupt.

It is well established that a bankrupt can still receive damages where:

“The damages are to be estimated by immediate reference to pain felt by the bankrupt in respect of his body, mind, or character, and without immediate rights of property.”

In

Heath v Tang [1993] 3 All ER 694

the Court of Appeal said:

“Actions for defamation and assault are obvious examples. The bankruptcy does not affect his ability to litigate such claims. But all other causes of action which were vested in the bankrupt at the commencement of the bankruptcy, whether for liquidated sums or unliquidated damages, vest in his trustee.”

The bankrupt cannot commence any proceedings based upon such a cause of action and, if the proceedings have already been commenced, he ceases to have sufficient interest to continue them. Under the old system of pleadings, the defendant was entitled to plead the plaintiffs supervening bankruptcy as a plea in abatement.

Since the Supreme Court of Judicature Act 1875, the cause of action does not abate but the action will be stayed or dismissed unless the trustee is willing to be substituted as plaintiff:

see Jackson v North Eastern Railway Co [1877] LR 5 Ch D 844.

In

Ord v Upton [2000] 1 All ER 193, Ch 352

the Court of Appeal quoted the passage from Heath v Tang and said:

“Section 436 is not in truth a definition of the word “property”. It only sets out what is included. As will appear later from the cases that have been decided over many years, actions which relate to a bankrupt’s personal reputation or body have not been considered to be property and therefore they do not vest in anybody other than the bankrupt. They relate solely to his body, mind and character and any damages recovered are compensation for damage to his body, mind and character as opposed to other causes of action which have been considered to be a right of property. Thus causes of action to recover damages for pain and suffering have been held not to vest in the trustee. That has led to a number of oddities. For example, the parties agree that if at the time of the bankruptcy, the bankrupt had in his bank a sum which included money paid as damages for a libel, that sum would vest in his trustee because the right to the money formed part of his estate and therefore was available to pay off the bankrupt’s creditors. That was to be contrasted with an action personal to the bankrupt, such as a libel action, which was not settled before the end of the bankruptcy. In such circumstances the cause of action would remain with the bankrupt as would any damages awarded after discharge. If a cause of action is not personal to the bankrupt, it vests in the trustee and therefore any damages awarded whether before or after the discharge will be available to discharge the bankrupt’s liabilities.,,

In Ord the claim was a negligence action for personal injury, including special damages, and the issue was whether the existence of the special damages claim took the case out of the exception, meaning that it vested in the trustee, or remained wholly within the exception, or could be severed so that the general damages claim remained with the bankrupt but the special damages claim vested in the trustee.

The Court of Appeal held that that was a single, indivisible action and therefore it either all remained with the bankrupt or all vested in the trustee, and that it was a hybrid claim, in part personal in part relating to property.

The Court of Appeal held that the action vested in the trustee and to fall within the exception a claim must relate only to a cause of action personal to the bankrupt, adding:

“All causes of action which seek to recover property vest in the trustee whether or not they contain other heads of damage to which the bankrupt is entitled.”

In

Beckham v Drake [1849] 11 HLC 1213

the Court of Exchequer Chamber repeatedly used the term “assignees” in relation to the passing of the action to the trustee, and the term was also used in Stanton v Collier (1854} 23 UQB 116 and subsequent cases.

In Ord the Court of Appeal undertook an extensive review of the authorities and concluded that although the whole of the action vested in the trustee the actual general damages belonged to the bankrupt and did not form part of the trustee’s fund, and thus the damages must be split between the trustee and the bankrupt.

Provable Debts on Bankruptcy

There is no definition of a provable debt in the Insolvency Act 1986.

The general rule is that all debts are considered provable unless they come within the exceptions of non-provable debts.

A debt or liability to which the bankrupt is subject at the commencement of the bankruptcy is a provable debt.

Any debt or liability to which the bankrupt may become subject after the commencement of bankruptcy, including after discharge from bankruptcy, by reason of any obligation incurred before the commencement of bankruptcy, is a provable debt.

I have considered the various definitions of non-provable debts and none of them relates to a judgment of the court for damages for defamation.

This is the reverse for the situation set out above, which dealt with the ability of a bankrupt to conduct litigation, and receive the fruits of that litigation, in certain circumstances, one of which is damages for defamation.

Does that principle apply against a bankrupt?

In order words does the nature of the damages in defamation mean that a bankrupt or discharged bankrupt is still liable to pay those damages, even though he was a bankrupt at the time of the hearing and his bankruptcy has subsequently been discharged?

The relevant legislation is the Insolvency Act 1986, and in particular section 281 which is headed “Effect of Discharge”.

Section 281(5) reads:

“(5)          Discharge does not, except to such extent and on such conditions as the court may   direct, release the bankrupt from any bankruptcy debt which-

                  (a)            consists in a liability to pay damages for negligence, nuisance or breach of a                                      statutory, contractual or other duty, or to pay damages by virtue of Part 1 of the                    Consumer Protection Act 1987, being in either case damages in respect of                                          personal injuries to any person, or

                  (b)            arises under any order made in family proceedings or under a maintenance                                        calculation made under the Child Support Act 1991.”

This subsection is terribly worded, but it appears to require there to be damages in respect of personal injuries, as that appears to be qualifying wording in relation to the damages for negligence, nuisance or breach of a statutory duty, contractual or other duty, that is that not only must there be a liability to pay damages under one of those heads, but the damages must also be in respect of personal injuries to any person.

The reference to “either” case is particularly confusing as there are six different types of action referred to, whereas the word “either” should only be used as a choice between two, and not six, options.

The words “or to pay damages by virtue of Part 1 of the Consumer Protection Act 1987”, being in either case, were inserted by the Consumer Protection Act 1987.

Doing my best to interpret this piece of legislation, I assume that the drafter of the Consumer Protection Act 1987 was some sort of consumer expert who was unaware of the law generally and treated the five types of case in the original wording as one, and therefore the word “either” is differentiating between that group of five on the one hand and the new insertion of damages under Part 1 of the Consumer Protection Act 1987, on the other hand.

To read it in any other way would mean that a bankrupt would continue to be liable for breach of contract, which is very clearly not the case.

Thus, the exception in section 281(5) requires there to be personal injuries.

Are Injuries To Feelings A Species Of Personal Injury?

There is no doubt that the general damages element of an award for defamation includes an award for injury to feelings and I have quoted above the relevant section from the judgment in this case.

Section 281(8) of the Insolvency Act 1986 defines “personal injuries” as including death and any disease or other impairment of a person’s physical or mental condition.

That definition is used extensively in various legislation.

Injury to Feelings

Is injury to feeling s species of personal injury? Does it involve impairment of a person’s mental condition?

Shorter Oxford English Dictionary

Impair

1.              Make less effective or weaker; devalue, damage, injure.

2.              Become less effective or weaker; deteriorate, suffer injury or loss.

Impaired

1.              One that has been impaired.

2.              Of the driver of a vehicle or driving; adversely affected by alcohol or narcotics.

Impairment

The action of impairing, or fact of being impaired; deterioration, injurious lessening or weakening.

Impair

To make worse, less valuable, or weaker; to lessen injuriously; to damage, injury.

Impaired

Rendered worse; injured in amount, quality or value; deteriorated, weakened, damaged.

Roget’s Thesaurus gives the following alternative for “impair”:

Damage, harm, diminish, reduce, weaken, lessen, decrease, blunt, impede, hinder, spoil, disable, undermine, compromise, threaten.

Roget’s Thesaurus gives the following alternatives for “impaired”:

Disabled, handicapped, incapacitated, debilitated, infirm, weak, weakened, enfeebled, paralysed, immobilised.

Roget’s Thesaurus gives the following alternatives for “impairment”:

Disability, handicap, abnormality, defect, deficiency, flaw, affliction, disadvantage, problem.

Those definitions seem to me to be potentially wide enough to cause injury to feelings to amount to an impairment of a person’s mental condition and thus to bring injury to feelings into the sphere of QOCS protection.

Injury to feelings awards are usually in the Employment Tribunal. There costs do not follow the event and thus QOCS is of no application, for the reasons set out above.

However injury to feelings awards are also made in the County Court where costs do follow the event; discrimination in relation to the provision of services is a County Court, not an Employment Tribunal matter.

My view is that the court could legitimately decide the issue of whether injury to feelings is a species of personal injury either way, although it is significant that the word “injury” is used.

Employment Tribunals have the power to award damages for actual personal injuries arising out of the discrimination, including physical, but more typically, psychological injuries.

These are generally awarded under the “injury to feelings” ahead of damages. The appellate courts have frequently said that there is no fine line between actual psychological injuries and injuries to feelings.

For example, in

Birmingham City Council v Jaddoo UKEAT/0448/04/LA

the Employment Appeal Tribunal referred to “the inevitable overlap between injury to feelings and psychiatric damages…..” (Paragraph 31).

In

Vento v Chief Constable of West Yorkshire Police (No 2) IRLR 102

the Court of Appeal said that tribunals should have “……regard…… to the overall magnitude of the sum total of the award for compensation for non-pecuniary loss made under the various headings of injury to feelings, psychiatric damage and aggravated damages” such that “in particular, double recovery should be avoided by taking appropriate account of the overlap between the individual heads of damage”.

In

HM Prison Service v Salmon [2001] IRLR 425

the Employment Appeal Tribunal said that it is “necessary to stand back and consider the non-pecuniary award as a whole”.

On balance my view is that injury to feeling should be classed as a species of personal injury and that cases involving claims for injury to feelings should attract the protection of Qualified One Way Cost Shifting in the civil courts, but not in Employment Tribunals.

In

Timothy James Consulting Ltd v Wilton [2015] IRLR 368 EAT

the Employment Appeal Tribunal overturned the decision of the Employment Tribunal that had made an award of £10,000.00 for injury to feelings but had then grossed it up to take into account income tax at the rate of 40% and thus awarded £16,666.00.

There was no dispute that £10,000.00 was the correct figure; the issue was whether it should be grossed up to take into account tax and thus the real issue was whether injury to feelings awards are taxable.

Historically it had always been assumed that such awards were free of income tax and the current legislation is the Income Tax (Earnings and Pensions) Act 2003 and section 406 provides:-

“This Chapter does not apply to a payment or other benefit provided-

(a)            in connection with the termination of employment by the death of an employee, or

(b)            on account of injury to, or disability of, an employee.”

This replaced, and is a similar wording to, section 148 of the Income and Corporation Taxes Act 1988.

Here the Employment Appeal Tribunal carried out an exhaustive analysis of the authorities.

The Employment Appeal Tribunal said that the reasoning of the Employment Appeal Tribunal in the case of

Orthet Ltd v Vince-Cain [2004] IRLR 857 EAT

was persuasive and was preferable to a decision in the First Tier Tribunal (Tax Chamber} in

Moorthy v Commissioners for HM Revenue and Customs [2015] IRLR 4 UKFTT

which had held that awards for injury to feelings were taxable.

Consequently, the Employment Appeal Tribunal held that injury to feelings awards are not taxable and therefore reduced the award back to £10,000.00.

It was a necessary part of the reasoning here, and in the Orthet case, that “injury” could include the concept of injury to feelings.

This reasoning was necessary because of the wording of section 406 set out above which exempts payments made “on account of injury to, or disability of, an employee”.

There is no reference there to injury to feelings and therefore to come within that definition the Employment Appeal Tribunal here and in Orthet held that “injury” includes injury to feelings, or to put it another way injury to feelings is a species of personal injury itself.

Thus, here the Employment Appeal Tribunal, at least equal in standing to the High Court, held that injury to feelings Is an injury.

However, the feedback that I am getting from practitioners in discrimination cases in the civil courts is that those courts are not treating injury to feelings as personal injury and thus are not providing QOCS protection.

In

Black v Arriva North East Limited [2014] EWCA Civ 1115

the Court of Appeal rejected an application for a costs capping order.

Here, the appellant appealed against a judgment in a disability discrimination case but had not taken out a sufficient level of After-the-Event insurance before such insurance became unrecoverable by virtue of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

Thus, any fresh premium, to cover the increased level of cover required, would not be recoverable.

Consequently, the appellant sought to have Arriva’s costs capped at £50,000.00.

The Court of Appeal pointed out that this would now apply to all new cases as a result of Parliament ending recoverability of After-the-Event insurance premiums by means of LASPO 2012.

“So the argument could be raised in any appeal brought in respect of a case under that Act. Such a result is difficult to square with the indication in the Practice Direction that an order for costs capping should only be made in exceptional circumstances” (paragraph 12}.

The Court of Appeal also pointed out that it is not a function of costs capping orders to remedy the problems of access to finance for litigation. “If for instance, the respondent’s costs were agreed to be proportionate, it would not be possible to exercise any jurisdiction to make a costs capping order simply because without it the appeal would not continue to be financially viable.”

That is because CPR 3.19(5) (b) only allows a costs capping order if “there is a substantial risk that without such an order costs will be disproportionately incurred;”

There were other fact- specific reasons for refusing a costs capping order in this case but they do not establish any new legal principles.

Interestingly one of the submissions made in favour of a costs capping order, but rejected, was that there was a lacuna in the law in that Qualified One-Way Costs Shifting applied in personal injury cases but not Equality Act cases. As this is a disability discrimination claim in relation to the provision of services one would expect damages for injuries to feelings to be available. The issue as to whether such damages are in fact damages for personal injuries, and thus covered by QOCS, does not appear to have been considered in this case.

“Another factor was that the potential subject of the Costs Capping Order – Arriva – had already incurred vastly more costs than £50,000.00 prior to the application being made and therefore the Costs Capping Order would have been retrospective:-

“The effect of what I have described is that by the time of the application, the major part of the solicitor’s costs of the appeal had been incurred. The effect of the order sought would, therefore, be that the Respondents will have already spent what is, if the costs capping order is made, in substance a budget laid down by the court without knowing that it had to stick to that insofar as it sought to recover its costs. In principle, the person who is the subject of the costs capping order ought, so far as possible, to know the budget to which he must work in advance.” {Paragraph 25).

There are conflicting decisions in the employment field as to whether the injury to feelings is a form of personal injury.

However, there has been very recent guidance by the Court of Appeal. In

Moorthy v Revenue and Customs [2018] EWCA Civ 847

the Court of Appeal held that compensation for injury to feelings paid in accordance with the terms of a Settlement Agreement is not taxable, as it falls within the exclusion from taxation of payments on account of “injury”.

Section 406 of the Income Tax (Earnings and Pensions) Act 2003 provides that a payment or other benefit provided “on account of injury to… an employee” on the termination of a person’s employment is not subject to income tax.

The issue here was whether a settlement in reference to a claim for injury to feelings, amongst other things, was subject to income tax or was excluded as coming within the definition of “injury”.

In holding that injury to feelings is indeed a species of injury exempting that part of the payment from tax, the Court of Appeal has resolved differences of opinion in the lower courts on this point.

Broadly the Employment Appeal Tribunal had held that injury to feelings awards are in relation to “injury” and are tax free – see for example:

Orthet Ltd v Vince-Cain [2004] IRLR 857; and

Timothy James Consulting Ltd v Wilton [2015] IRLR 368

whereas the Tax Tribunals, as here, have held such payments liable to tax as not being in respect of an injury.

In relation to the tax treatment of such awards section 5(7) of the Finance (No.2) Act 2017 has inserted, with effect for the tax year 2018/19 onwards, a new subsection (2) to section 406 of the Income Tax (Earnings and Pensions) Act 2003 which reads:

“Although “injury” in subsection (1) includes psychiatric injury, it does not include injured feelings.

This is in the context of tax, but the Court of Appeal gave this judgment after that amendment had been enacted, and therefore held that in relation to awards made before that date an award for injury to feelings is indeed a species of injury.

Thus, my view is that very recent Court of Appeal decision shows that awards for injury to feelings are, or certainly were before the recent law change, and thus section 281(5) of the Insolvency Act 1986 applies.

I have set out in detail above the circumstances in which a bankrupt can still receive general damages, that is the circumstances in which the award does not go into the estate.

By parity of reasoning a court should be invited to find that the same logic applies to a person with a judgment against a bankrupt, and that in so far as possible the reasons of legal consistency and certainty the court should take the same view.

For the reasons set out in detail in this advice, and in particular the Moorthy case, the court is so able to do.

I am grateful to Dr Tracey Bell for permission to use some material from an advice I prepared for her.

See also Gordon Exall’s Civil Litigation Brief of 20 January 2019 – Civil Procedure: Back To Basics 24: The Bankrupt Claimant (Personal Injury Litigants In Particular)

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There are various scenarios in relation to challenges to costs recovery arising from the decision in

Mazur & Anor v Charles Russell Speechlys LLP [2025] EWHC 2341 (KB) .

Here, I work on the basis that the case was correctly decided and that in any case where there is a potential challenge, some or all the work was done without the matter being conducted by an authorized or exempt person.

Challenges by the other side

1. Cases where the substantive issue and costs have both been determined, that is closed cases

2. Cases where the substantive issue has been determined but not costs.

3. Cases where neither the substantial issue nor costs have been determined – ongoing cases

4. Fixed Recoverable Cases

Challenges by one’s own client

5. Cases won by the client and closed.

6. Cases lost by the client and closed.

7. Ongoing cases

8. Fixed Recoverable costs cases

1. Cases where the substantive issue and costs have both been determined, that is closed cases

It is unlikely that the court will allow the other side to reopen either the substantive case or the issue of costs where both have been concluded.

Any appeal is likely to be out of time and the fact that the parties worked on a misunderstanding of the law is irrelevant; if it were otherwise, then any time there was a decision clarifying the law in a new way, endless cases could be reopened, even from decades earlier.

In any event, outside the field of Fixed Recoverable Costs, it would have been apparent to the paying party as to the level of fee earner conducting litigation, both from the costs budget and the Schedule of Costs.

• Cases where the substantive issue has been determined but not costs.

This is a different situation, but it remains the case that a court assessing costs shall not depart from the budget without good reason.

It is unlikely that a court will depart from the budget simply because the parties and the court were labouring under a misapprehension when fixing the budget.

Nevertheless, it is open to a paying party to argue that there is no valid retainer and therefore, under the indemnity principle, no liability for costs.

Having said that, the general view is that anyone can have conduct of the matter before proceedings are issued, and therefore, it is arguable that those costs are recoverable in any event as not being tainted by Mazur.

• Cases where neither the substantial issue nor costs have been determined – ongoing cases

This is really the same position as 2 save that the potential receiving party can cure the position, as happened in Mazur itself.

As set out above, pre-issue costs should be recoverable in any event as should post-cure costs.

Courts have a very wide discretion in relation to costs, and it may be that they will take a broad-brush approach and apply a percentage reduction in costs.

On the face of it, the court will not allow recovery of costs for work that has been conducted unlawfully, indeed potentially criminally and in contempt of court.

It is analogous to an unlawful Conditional Fee Agreement or a Damages-Based Agreement, where costs cannot be recovered pursuant to such an unlawful agreement.

The situation here is not quite the same as it is likely that the original retainer, entered into pre-issue, was not unlawful and/or that the parties simply did not address the issue.

It would be open to a court that has concluded that an unauthorized person had conduct of the litigation to disallow all costs on the basis that everything was tainted by illegality.

A percentage deduction is more likely.

Theoretically, the court could seek to identify and disallow only the costs in relation to 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)

Correspondence with another party to the proceedings alone is not to be treated as the conduct of litigation – see Paragraph 56 of

Agassi v HM Inspector of Taxes [2005] EWCA Civ 1507.

However, this would involve a huge amount of time and work on the court’s behalf in analysing and assessing every email, phone call, and piece of work etc, and I think it very unlikely that any court will approach the matter this way.

• Fixed Recoverable Cases

The indemnity principle does not apply to Fixed Recoverable Costs (see Butt v Nizami [2006] EWHC 159 (QB)) 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 Conditional Fee Agreement .

 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.

 Fixed Recoverable Costs are fixed by rules of court and are recoverable regardless of who undertook the work. However, it is possible to envisage alterative arguments.

• Cases won by the client and closed

This is essentially the same situation as 1 above except that the client has considerable extra rights under the Solicitors Act 1974 to challenge the bill, although there are strict time limits.

It is possible that a court will find that there are exceptional circumstances allowing the client to challenge the costs out of time.

There is an absolute prohibition on the client challenging the bill more than one year after the client has paid it and presuming that firms got their act in order after the Mazur decision, then the period of risk runs back one year from today until September 2025, that is just eight months.

• Cases lost by the client and closed

In relation to solicitor and own client costs, the position is the same as in 5 above.

However, if, as the losing party, the solicitor’s client has been ordered to pay the other side’s costs, as would be usual outside a Qualified One-Way Costs Shifting case, the client may seek a Wasted Costs Order against its own solicitor on the usual basis under Section 51 of the Senior Courts Act 1981.

Section 51(7) reads:

(7)In subsection (6), “wasted costs” means any costs incurred by a party—

            (a)        as a result of any improper, unreasonable or negligent act or omission on the                    part of any legal or other representative or any employee of such a                              representative; or

            (b)        which, in the light of any such act or omission occurring after they were                             incurred, the court considers it is unreasonable to expect that party to pay.

Acting in a way which is criminal and in contempt of court must be improper, and the issue would be causation, that is whether that improper conduct caused the client to incur the other side’s costs and on the face of it, that would not be the case.

The client could in any event argue that the absence of an authorized person conducing the litigation led to an adverse result, that is not strictly a Mazur point – it is a potential action in negligence.

However, the publicity surrounding the Mazur Judgment will no doubt focus the tension of those stirring up clients to sue their solicitors.

• Ongoing cases

The situation is as in 3 above.

• Fixed Recoverable costs cases

The situation here is different as compared with 4 above.

Even if in a Fixed Recoverable Costs case, costs can be recovered from the opponent despite the matter having been conducted unlawfully, those costs belong to the client and not the solicitors and it is arguable that the solicitors must account to the client for those costs recovered.

Having said that, although recoverability of the costs from the other side is fixed, there is an argument that the client should not get a windfall of costs that they have never incurred, despite the indemnity principle not applying to Fixed Recoverable Costs cases.

There is an argument that the money should be returned to the defendant if the claimant refuses to let their solicitors have it.

It is analogous to the situation where, as has happened, a paying party has agreed costs on the between the parties basis and the client has then challenged the solicitor and own client bill under the Solicitors Act 1974, and that of course includes costs recovered from the other side, and the court has reduced the total bill, including the solicitor and own client element, to below the sum paid by the paying party.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more. Subscriptions are £250 + VAT for 2026, which is over 100 issues. Buy here.

Section 14 of the Legal Services Act 2007 provides that it is a criminal offence for a person to carry on a reserved legal activity unless that person is entitled so to do and the offence is punishable:

• on summary conviction, to imprisonment for a term not exceeding [the general limit in a magistrates’ court] or a fine not exceeding the statutory maximum (or both), and

• on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine (or both).

Section 14(4) provides:

(4) A person who is guilty of an offence under subsection (1) by reason of an act done in the purported exercise of a right of audience, or a right to conduct litigation, in relation to any proceedings or contemplated proceedings is also guilty of contempt of the court concerned and may be punished accordingly.

The general view amongst commentators, following the decision of the King’s Bench Division of the High Court in

Baxter v Doble & Anor [2023] EWHC 486 (KB),

and in particular, the statement at Paragraph 206:

206. Furthermore, in light of the statutory language and the ruling in Ndole, no step that is taken prior to the issue or commencement of proceedings can amount to the conduct of litigation.

is that pre-issue work cannot amount to the conduct of litigation, and can therefore be carried on by anyone.

That follows from the definition of the conduct of litigation contained in Schedule 2 of the Legal Services Act 2007.

However, it will be noted that Section 14(4) specifically refers to “any proceedings or contemplated proceedings” (my bold).

Contemplated proceedings can only cover a period of time before proceedings have been issued or commenced and thus there is a tension, to put it mildly, between the definition of conducting litigation which is contained in Schedule 2 and the fact that it is a criminal offence to carry out the reserved legal activity of conducting litigation in relation to contemplated proceedings, which must by definition be pre-issue.

Another point to note is that a person is guilty of contempt of court if they are guilty of an offence under subsection (1) and my reading of that wording is that there must be a conviction in a criminal court, as set out in Section 14(3) before a person is guilty of a contempt of court under Section 14(4).

It is hard to see the point of that provision. Very clearly, a person who commits a criminal offence in civil proceedings must be guilty of a contempt of court in any event.

Kerry Underwood 2026                         [email protected]                                                                            7    

What Section 14(4) does, presumably unintentionally, is to make it a pre-condition of a finding of contempt of court in these circumstances that a person has first been convicted in a criminal court of an offence under Section 14.

It makes no sense at all. It means that a person who is carrying on a reserved legal activity illegally in civil proceedings must be referred of to a criminal court, with delays running potentially into many years, and if convicted by that court, can then be dealt with for contempt of court by the civil court dealing with the civil proceedings where the criminal offence was committed.

Arguably, Section 14 does not interfere with the court’s common law right to find a contempt of court, but if that is the case, then what meaning does it have at all?

I believe that there is a consensus that this is one of the worst drafted Acts of Parliament in UK constitutional history.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

Subscriptions are £250 + VAT for 2026, which is over 100 issues.Buy here.

I set out my responses to the numbered questions in the Consultation: 

1. Respondent details: 

1. G.           Other – mixture of claimant and defendant lawyer but now more a         commentator, writer and Consultant to other law firms. 

I am the author of the standard textbooks on fixed costs: 

• Fixed Costs (XPL Law), 2004

• Fixed Costs (Second Edition) LexisNexis Butterworths, 2006

• Personal Injury Small Claims, Portals and Fixed Costs (Three-Volumes), 2017

I have written several hundred articles on the subject.

I advised Lord Justice Jackson extensively in relation to his July 2017 publication: 

• Review of Civil Litigation Costs;  Supplemental Report :Fixed Recoverable Costs

• Yes, approximately 500.

• General

• How well has the Extension of Fixed Recoverable Costs been operating?

It is too early to give a final answer as not many cases in the Intermediate Track have proceeded to trial, but the certainty introduced is working well in my view in relation to settling matters, as it did under the previous scheme which has now been extended. 

• How well has the new intermediate track been operating? Has it had an impact on case progression?

 The same as above and yes, I believe it has had a positive impact on case progression between the parties. 

• Do practitioners and court users (including Litigants in Person) have access to sufficient information on FRC and their application?

Yes, but the rules need considerable further clarification, possibly by way of Practice Directions with worked examples.

• What effect has the extension of the FRC had on cases that use the Online Civil Money Claims and Damages Claims Portal services?

I do not believe that it has had any significant effect and there are ongoing problems with both the online civil money claims and damages claim portal services. 

3. Complexity Bands

• Do the complexity bands enable the award of proportionate costs? Is this the case in both the fast and intermediate tracks? Please provide your reasons

Broadly, yes, although I believe that the fees in Band 1 in both the Fast Track and Intermediate Track are too low.

• To what extent do the complexity bands simplify the costs determination process?

The Complexity Bands do simplify the costs determination process, but I see no need to have four bands in the Intermediate Track as Bands 2 and 3 are very similar and I would merge them and this would simplify the process without making any significant difference to the costs awarded/received. 

• Are there any issues to raise in relation to the complexity bands?

It should be noted that due to the costs in Band 4 of the Fast Track being based on 40% of the damages, as well as a fixed fee, costs for the same case with the same damages etc. in the Fast Track Band 4 will almost always be higher than in the Intermediate Track. 

I have no particular problem with this, but I suspect that it was not intended and this is an issue which needs addressing and clarifying. 

I have written extensively on this and will be happy to supply my writings and worked examples of where the Fast Track has much higher costs in the Intermediate Track for the same case. 

Here are examples of pieces I have written about this topic: 

FAST TRACK COSTS CAN BE 10 TIMES HIGHER THAN INTERMEDIATE TRACK!

Having tried dozens of different examples, it is clear that in many cases, both civil and personal injury, the fees are higher in the Fast Track as compared with the Intermediate Track for the same case.

This is for various reasons: 

• The key stage of the Fast Track is issuing proceedings, where there is a sharp jump in fees, and indeed that has been the case for the last ten years;

• In the Intermediate Track, that stage is the service of the Defence, which is obviously later;

• The inflexible nature of the Fast Track as compared with the flexible nature of the Intermediate Track, which means there is certainty in the Fast Track as to the Band;

• The very high percentage of damages calculation of fixed fees in Band 4 of the Fast Track — 48% including VAT.

This is so counter-intuitive, that I have several times gone back to the actual Rules to check it was not a mistake or a typo!

Let us ignore any issue of whether the court will agree to put into the Fast Track matters which on the face of it are financially in the Fast Track on one hand, or the Intermediate Track on another.

Thus, we have a straightforward Road Traffic Accident, and one case is worth £24,000 and is Fast Track and the other is £26,000 and thus is Intermediate Track, although of course it will probably be allocated to the Fast Track.

It is issued and settles before trial.

The Fast Track calculation is as follows: 

Band 2	£
Fixed Fee	1,445
20% of Damages	4,800
Total	6,245

Intermediate Track – almost certainly Band 1

Band 1	£
Fixed Fee	1,652
3% of Damages	780
Total	2,432

Even if it would be allocated to Band 2 in the Intermediate Track — very unlikely if it is settled before the Defence is served, then you hardly lose out as the calculation would be:

Band 2	£
Fixed Fee	5,162
6% of Damages	1,560
Total	6,722

If that £26,000 claim was in the Fast Track, then the figures are as follows: 

	£
Fixed Fee	1,445
20% of Damages	5,200
Total	6,645

Thus, even if the matter was in Intermediate Band 2, you are only £77 better off in the Intermediate Track.

Because of the high percentage figure in the Fast Track, lawyers are better off in the Fast Track, the higher the damages!

Of course, if a Defence is served pushing the matter into Stage 3 of the Intermediate Track, then you rely on the value of any claim over £25,000 to seek to get it into the Intermediate Track.

In a personal injury case, I think it very hard indeed for a defendant who never receives costs, due to QOCS, to seek to argue that it should be in a higher track than that proposed by the claimant.

 They may try to do so  but yet again, that is highly counter-intuitive and may not find favour with the courts.

Let us look at the facts of a particular case brought to my attention. 

The balance outstanding and recovered by the claimant was £96,913. 

Let us assume that the matter is allocated to Band 1, 2,3 or 4 of the Intermediate Track and is resolved after proceedings have been issued, but before a Defence is served. 

Fixed Recoverable costs are as follows:

Intermediate Track: 

Band 1	£
Fixed fee	1,652.00
A sum equivalent to 3% of damages	2,907.39
Total	4,559.39

Even if the matter was at Band 2 one, the calculation is as follows:

Band 2	£
Fixed fee	5,162.00
A sum equivalent to 6% of damages	5,814.78
Total	10,976.78

If the matter was assigned to Band 3, or Band 4 the calculations are as follows: 

Band 3	£
Fixed fee	6,607.00
A sum equivalent to 6% of damages	5,814.78
Total	12,421.78

Band 4	£
Fixed fee	9,601.00
A sum equivalent to 8% of damages	7,753.04
Total	17,354.04

In Band 4 of the Fast Track the Fixed Recoverable Costs would be as follows:

Band 4	£
Fixed fee	3,097.00
A sum equivalent to 40% of damages	38,765.20
Total	41,862.20

All these figures have VAT on top.  

This is bizarre, and presumably completely unintended, and arises from the very high percentage of damages in Band 4 of the Fast Track, 40% plus VAT, and as the damages do not have VAT on them, this equals 48% of damages. 

Thus, depending on which band the matter went into in the Intermediate Track, and adding

VAT, the minimum advantage in being in the Fast Track is £29,409.80, and the maximum is £44,821.96.

Thus, by being in the Fast Track, you will receive over twice as much as if the matter was in Band 4 of the Intermediate Track and very nearly 10 times as much if it is in Band 1 of the Intermediate Track!

______________________________________________________________________________

FAST TRACK COSTS HIGHER THAN INTERMEDIATE COSTS, BUT NOT ALWAYS

I have written on many occasions about the fact that Fixed Recoverable Costs in the Fast Track are often much higher than Fixed Recoverable Costs in the Intermediate Track for exactly the same claim; however, as the example below shows, this is not always the case.

Cases and examples are beginning to come through.

A case was allocated to the Fast Track, Complexity Band 4 and in terms of the issues and complexity, it was common ground that that was the appropriate track and band.

However, it became apparent that the matter could not be dealt with in one day and therefore, it had to be reallocated to the Intermediate Track.

It was a claim for other than monetary relief and that means that under the Civil Procedure Rules the notional value moved from £20,000 in Band 4 of the Fast Track to £100,000 in Band 4 of the Intermediate Track.

In that instance, it very much works the other way round, with costs more than doubling.

The calculation in the Fast Track is as follows:

B(2) – On or after the day that the court allocates the claim under Part 26 , but before the date that the court lists the claim for trial:

	£
	6,607
40% of damages (deemed to be £20,000)	8,000
Total	£14,607

In the Intermediate Track:

	£
Stage 4	16,517
16% of damages (deemed to be £100,000)	16,000
Total	£32,517

Every case needs to be carefully considered so as to maximise costs recovery, but that also maximises the client’s exposure in the event of defeat.

One advocate wrote to me to say that many courts and judges are still very much confused by the whole regime, and that is unsurprising, given these strange vagaries.

______________________________________________________________________________

FAST TRACK COSTS HIGHER THAN INTERMEDIATE TRACK: ANOTHER EXAMPLE

A road traffic accident personal injury claim settles for Pounds 35,000 pre-issue.

What Track and Band?

If in the Intermediate Track, Band 1 in my view- nothing was in dispute, let alone more than one issue.

Intermediate Track Complexity Band 2 is for:

“ Any less complex claim where more than one issue is in dispute, including personal injury claims where liability and quantum are in dispute’.

That threshold is not met.

A Claimant is far better off arguing that it is a Fast Track Complexity Band 3 claim:

(a) Road traffic accident related, personal injury claims to which the RTA Protocol does not apply.

In Intermediate Track Complexity Band 1 the fee is:         1,652

Plus 3% of damages                                                                1,050

                                                                                                    2,702

In Fast Track Complexity Band 3:                                     3,097

Plus 10% of damages over 10,000                                       2,500

                                                                                                     5,597

4. FRC in Part 36 offers

10. Are there any issues with the interpretation of CPR 36 as a result of the CPR Part 45 changes?

            The question is misconceived as it is based on a misconception. 

            The Consultation paper states: 

 If the claimant fails to beat the defendant’s offer at trial, they may be ordered to pay the  defendant’s FRC from the expiry of the relevant period as well as a 35% uplift on those  costs, a consequence introduced by the October 2023 reforms in place of indemnity  costs. 

 That is not correct. The 35% uplift only applies to a receiving claimant where the  claimant has matched or beaten its own Part 36 offer. 

 The penalty on a claimant for failing to beat a defendant’s offer at trial is that they pay  the defendant’s costs from the expiry of the relevant period, even though they have  won the case. 

            The claimant in those circumstances does not pay a 35% uplift. 

 Again, I have written extensively on this and the whole situation of Part 36 and the  interplay with Fixed Recoverable Costs can be very confusing in certain circumstances. 

 If a claimant matches or beats its own offer at trial, the situation is straightforward, and  that is that the claimant gets a 35% uplift on costs for all stages after the expiry of the  relevant period. 

 The problem arises in calculating Fixed Recoverable Costs where a claimant accepts a  defendant’s Part 36 offer after the expiry of the relevant period.  

Here is an example that I have written about this topic: 

PART 36, FIXED RECOVERABLE COSTS AND DEFENDANTS’ COSTS: A MAJOR UNRESOLVED PROBLEM

Part 36 is one of the most, if not the most important Civil Procedure Rules and given the very wide range of situations that it has to cover, issues are bound to arise. 

However, there is a major problem in relation to Part 36 and the Fixed Recoverable Costs scheme, which could easily be dealt with by clarification, and where necessary, rewriting the relevant Civil Procedure Rules. 

The issue is what costs a defendant gets on late acceptance by a claimant of a Part 36 offer in the Fixed Recoverable Costs scheme, whether in the Fast Track or the Intermediate Track. 

These facts are taken from a real case, where a defendant made a Part 36 offer expiring in Stage 3 in a matter in Complexity Band 1 of the Intermediate Track. 

Had the claimant accepted the offer in time, then in accordance with the Fixed Recoverable Costs scheme, the claimant would have been entitled to £4,129 plus an amount equivalent to 10% of the damages. 

The claimant did not accept the offer then, but did accept it on the day of trial, which is at Stage 8.

The court ordered costs in favour of the claimant in the sum of £4,129 plus an amount equivalent to 10% of the damages. 

So far so good. 

What the court then did is to order the claimant to pay the defendant’s costs, cumulative to Stage 8, that is from Stage 1 to Stage 8, of £6,813 plus an amount equivalent to 15% of damages. 

The issue is whether in those circumstances, the defendant gets costs for all stages, including ones before the Part 36 offer was made, or only the difference in costs between the stage in which the Part 36 offer expired and the stage in which it was accepted. 

My view is that the court here has applied CPR 36 correctly, although it is hard to believe that Parliament intended that consequence. 

CPR 36.23(8) provides: 

(8)          Subject to paragraph (9) where the court makes an order for costs in favour of the  defendant, the  defendant is entitled to—

               (a) the fixed costs in Table 12, Table 14 or Table 15 in Practice Direction 45 for the stage  applicable at the date of acceptance; (my bold) 

               less the fixed costs to which the claimant is entitled under paragraph (3)(a)(i) or (4).

It was assumed that CPR 36.23(8) was a drafting error, but it has not been corrected and I am now seeing court orders coming through following the wording of this rule, that is that the defendant gets costs for all of the stages up to and including the stage in which the Part 36 offer was accepted late, irrespective of the stage in which it was made

Thus, that rule does mean that the defendant is indeed entitled to the cumulative costs of the whole case, and it makes no difference at all as to when they made their offer. The timing of the defendant’s offer does affect the amount that the claimant is entitled to.  

I now turn back to Paragraph (3)(a)(i):

(3)          Subject to paragraphs (4) and (5), where a defendant’s Part 36 offer is accepted after  the relevant period—

                (a) the claimant is entitled to—

(i) the fixed costs in Table 12, Table 14 or Table 15 in Practice Direction 45 for the stage applicable at the date on which the relevant period expired; …

Thus, the timing of the defendant’s offer, that is in which stage it expires, affects the amount of the claimant’s costs to be set off against the defendant’s costs, but not the actual figure of the defendant’s costs.  

I am reinforced in that view by the wording of CPR 36.23(8) which refers to the defendant getting its costs

less the fixed costs which the claimant is entitled under Paragraph (3)(a)(i) or (4) (my bold).

I cannot see how CPR 36.23(8) can be read any other way. 

An alternative reading is that the defendant only gets the costs 

‘for the stage applicable at the date of acceptance’

that is just that stage but that makes no sense either as in the example just given, the defendant would be deprived of its costs for Stages 4, 5, 6, and 7 even though time for acceptance of the offer expired in Stage 3.

Depending upon when the offer was made, one would expect the claimant’s costs to the date of expiry to be higher than the defendant’s costs, and thus the wording to be along the lines of a claimant getting its costs less those due to the defendant, and not the other way around. 

Non-Fixed Recoverable Costs cases are governed by CPR 36.17 which specifically provides that where a claimant fails to match or beat a defendant’s offer, then the defendant is entitled to –

(a) Costs (including any recoverable pre-action costs) from the date on which the relevant period expired (my bold).  

CPR 36.13 makes a similar provision in relation to a late accepted defendant’s offer, rather than a matter which has gone to trial. 

Thus, my view is that the order is a correct application of the rules, but that it was never Parliament’s intention, nor I suspect the Civil Procedure Rules Committee’s intention, to create that situation, which is fundamentally different from the situation in non-fixed costs cases. 

Surely the intention was that the defendant only got its costs from the stage in which time for acceptance expired, and not for the whole case irrespective of when the offer was made or when it expired. 

The effect of this is that a late accepting claimant will always have all its costs wiped out even if the defendant’s Part 36 offer was made say 23 days before trial.  

Furthermore, as the claimant gets costs based on the amount awarded or settled for, and the defendant gets them based on the amount claimed, the claimant will always end up owing the defendant costs on late acceptance or failure to beat the offer at trial.

Acceptance late but within same stage

I am very grateful to Simon Gibbs, the Expert Defence Costs Lawyer, whose excellent blog is here, for his input into this piece, and, frankly, for putting me right. 

I had assumed, wrongly, that a claimant’s late acceptance within the same stage of a Fixed Recoverable Costs case would have no adverse costs consequences as the moment the claimant enters that stage, they get the full fixed costs for that stage and that remains the case, and the sum remains the same, until the next stage is entered. 

That would seem to me logical and sensible, which is no doubt why I wrongly assumed that that was the end of the story.

What in fact happens, bizarrely in my view, is that late acceptance, even by a day, means that both parties get Fixed Recoverable Costs from each other for that stage, but see the Civil Procedure Rule Committee  minute below. 

What the Civil Procedure Rules could have said, but do not, is that where a claimant accepts a defendant’s offer after the expiry period, but within the same stage that it was made, then neither party gets costs for that stage. 

That is not what it says, and you might think that it is the same hill of beans, as both parties getting costs from each other for the same stage, cancels each other out. That is not necessarily the case. 

Not only does it mean that the claimant gets nothing for that stage, but they will generally get less than nothing as the defendant’s costs for that stage will be higher than those of the claimant. 

I make that statement boldly, but I will look later at the stark contrasts between CPR 45 and CPR 36, which means that I do not know if that is correct. 

The logic behind that is that the claimant receives costs based on the amount settled for, that is the value of the Part 36 offer, whereas the claimant pays costs based on the sum claimed. 

It is certainly the case that the claimant receives costs based on the amount settled for, but in a Part 36 case, it is unclear whether the claimant pays costs based on the sum claimed, or the sum settled for, and I look at that later. 

The Part 36 offer by the Defendant is rarely going to be for everything claimed by the claimant, and therefore the amount settled for will be less than the amount claimed. 

The relevant Rules in relation to this point are CPR 36.23(3), (8), and (9). 

“(3) Subject to paragraphs (4) and (5), where a defendant’s Part 36 offer is accepted after the relevant period—

            (a)the claimant is entitled to—

• the fixed costs in Table 12, Table 14 or Table 15 in Practice Direction 45 for the stage applicable at the date on which the relevant period expired; and

• any applicable additional fixed costs allowed under Section I, Section VI, Section VII or Section VIII incurred in any period for which costs are payable to them; and

             (b)the claimant is liable for the defendant’s costs in accordance with paragraph (8).

• Subject to paragraph (9) where the court makes an order for costs in favour of the defendant, the defendant is entitled to—

• the fixed costs in Table 12, Table 14 or Table 15 in Practice Direction 45 for the stage applicable at the date of acceptance; and

• any applicable additional fixed costs allowed under Section I, Section VI, Section VII or Section VIII incurred in any period for which costs are payable to them,

less the fixed costs to which the claimant is entitled under paragraph (3)(a)(i) or (4).

• Where—

• an order for costs is made pursuant to paragraph (3); and

• the stage applicable at the date on which the relevant period expires and the stage applicable at the date of acceptance are the same,

the defendant is entitled to the fixed costs applicable to that stage.”

Thus, the claimant does indeed get all its fixed costs of the stage in which the Part 36 offer is accepted, whether accepted in time, or late. 

That is the effect of CPR 36.23(3)(a)(i). 

So far, so good. 

However, CPR 36.23(3)(b) provides that the claimant is liable for the defendant’s costs in accordance with Paragraph (8). 

Paragraph (8) provides that where the court makes an order for costs in favour of the defendant, the defendant is entitled to the fixed costs for the stage applicable at the date of acceptance less the costs due to the claimant for the same stage. 

The fact that the Rules state that, suggests that the costs may be different, because a claimant gets costs based on the amount settled for, and the defendant gets costs based on the amount claimed.

Otherwise, it would have been far simpler to say that where an offer is accepted late within the same stage, neither party gets costs for that stage. 

Paragraph (8) is subject to Paragraph (9) which provides at (b) that where the stage application at the date on which the relevant period expires and the stage applicable at the date of acceptance are the same, the defendant is entitled to the fixed costs applicable at that stage. 

Again, that suggests that the defendant gets its costs based on the amount claimed, and not settled for, which is what CPR 45.6(2) and (3) say and I set this out below: 

“(2) For the purpose of assessing the costs payable to a defendant by reference to the fixed costs in Table 12 and Table 14—

• “value of the claim for damages” and “damages” shall be treated as references to the value of the claim, as defined in paragraph (3); and

• if the claim is discontinued, a reference in Table 12 or Table 14 to the stage at which a case is settled shall be treated as a reference to the stage at which the case is discontinued.

(3) For the purposes of paragraph (2)(a), ‘the value of the claim’ is—

• the amount specified in the claim form, without taking into account any deduction for 

contributory negligence, but excluding—

                        (i)any amount not in dispute;

                        (ii)interest; or

                        (iii)costs;

• if no amount is specified in the claim form, the maximum amount which the claimant reasonably expected to recover according to the statement of value included in the claim form under rule 16.3;

• if the claim form states that the claimant cannot reasonably say how much is likely to be recovered—

• £25,000 in a claim to which Section VI applies; or

• £100,000 in a claim to which Section VII applies;

• if the claim has no monetary value—

• the applicable amount in rule 45.45(1)(a)(ii) in a claim to which Section VI applies; or

• the applicable amount in rule 45.50(2)(b)(ii) in a claim to which Section VII applies; or

• if a claim includes both a claim for monetary relief and a claim which has no monetary value, the applicable amount in sub-paragraph (d) taken together with the applicable monetary value in sub-paragraph (a), (b) or (c).”

So, that appears to be that, although I am not sure what CPR 36.23(9) brings to the table that is not already covered by CPR 36.23(8).

The Effect

A non-personal injury claimant receives an offer in Stage 1 which expires a day before the Defence is filed, which will trigger the matter to go into Stage 3, something which the defendant can control and engineer. 

The claim is for £100,000 and settles for £50,000 due to uncertainties which both parties accept and which would have led to the matter being assigned to Complexity Band 4. 

The claimant accepts in time. 

The claimant will get Stage 1 costs to be assessed, not fixed in non-personal injury matters, but subject to a cap at the Fixed Recoverable Costs sum for Stage 1. 

So, the client gets £50,000 plus assessed costs subject to a cap of £13,601 plus VAT, that is 

£9,601; plus 8% of damages plus VAT. 

If the claimant accepts two days late the matter is now in Stage 3, because the filing of the Defence has moved the matter from Stage 1 to Stage 3. 

It appears that the defendant gets £27,420, being the fixed fee of £13,420; plus14% of £100,000 damages claimed, plus VAT.

What does the claimant get? I do not know. 

The maximum is clearly £13,601, but whether that becomes fixed, and not capped, as the matter is now in Stage 3, retrospectively fixing Stage 1 costs, I do not know. 

As the time for acceptance expired in Stage 1, is the claimant only entitled to assessed costs based on work done, subject to the Stage 1 cap, or to fixed Stage 1 costs? 

Either way, the claimant is at least £13,819 plus VAT worse off, so that is £16,582.80 or one third of the damages in this example. 

In personal injury cases, the Stage 1 costs are fixed, and Qualified One-Way Costs Shifting applies. 

If the claimant accepts in time, she/he gets: 

	£
Damages	50,000
Fixed Costs	13,601
VAT thereon @ 20%	2,720.20
Total	66,321.20

If the claimant accepts late in Stage 3, then the position is: 

		£
Damages		50,000
Fixed Costs		13,601
VAT thereon @ 20%		2,720.20
Total		66,321.20 (as above)
Less
Defendant’s Fixed Costs		27,420
VAT thereon @ 20%		5,484
Total		32,904
Net     payment           to           claimant, damages	including	33,417.20

Two days, when maybe no work at all was done, costs the claimant £32,904 that is virtually half the award. 

What happens if the claimant accepts late in the same Stage – let us assume Stage 1 – and proceedings have been issued -the matter remaining in Stage 1 of the Intermediate Track until a defence is filed.

I make this qualification about proceedings being issued as it remains unclear as to whether a defendant can ever recover costs in an un-issued matter. They certainly can once issued.

In a personal injury claim on the above figures, it would look like this: 

	£
Defendant’s Fixed Costs	17,601
VAT thereon	3,520.20
Total	21,121.20
Less
Claimant’s Fixed Costs	13,601
VAT thereon @ 20%	2,720.20
Claimant’s total costs	16,321.20

Thus, the claimant owes the defendant £4,800 which will be set off against damages. 

The claimant’s solicitor could claim a success fee of up to £12,500, being 25% of the damages, and less than the maximum 100% uplift on Solicitor and Own Client costs, even on a recovered costs basis, even though in reality, the claimant is paying out costs to the defendant!

In a non-personal injury case, each side’s costs will be assessed if the matter resolves in Stage 1, but after expiry of time for accepting the defendant’s Part 36 offer.  

The claimant’s costs are capped at £16,321.20 including VAT and the defendant’s costs at £21,161.20 including VAT, even if the defendant had done only a fraction of the work that the claimant had done. 

In non-personal injury matters, there is no damages-based cap on the amount of the success fee that the solicitor can charge, and therefore, the success fee alone in the above case could be  £16,321.20 even though the claimant is receiving no costs and is paying out £4,800 net to the defendant. 

There will be some interesting Solicitor and Own Client challenges under the Solicitors Act 1974 coming up. 

Having said all of that, I am not sure that I am correct in stating that the defendant gets Fixed Costs based on the amount claimed. 

This is unquestionably the general position in Fixed Recoverable Costs cases, as that is what CPR 45.6(2) and (3) say, and I have set those provisions out above. 

However, in a stand-alone throw away provision, CPR 36.23(6) says: 

“(6) Fixed costs shall be calculated by reference to the amount of the offer which is accepted.”

It is not clear whether that refers only to a claimant’s costs, or to both parties’ costs, including the defendant’s costs, and CPR 36.23(6) appears after CPR 36.23(3) which I have set out above, and which deals with late acceptance. 

That would have the bizarre effect that the more the defendant’s solicitors get the settlement down, the less they get in costs, albeit the defendant will be paying lower damages. 

So, £100,000 is claimed, and the claimant accepts £90,000 late in Stage 3 when the time for accepting expired in Stage 1. 

The defendant’s costs are £25,920 plus VAT comprised of:  

	£
Fixed Costs	13,420
14% of damages	12,500
Total	25,920
Plus VAT

Same claim, same timescales, but the claim settles for £25,000. 

The defendant gets: 

	£
Fixed Costs	13,420
14% of settlement	3,500
Total	16,920 plus VAT

Thus, for achieving a far better result for the defendant, the defendant’s Fixed Recoverable Costs are reduced by £9,020 plus VAT.

If the claimant accepted £100, then the defendant would get: 

	£
Fixed Costs	13,420
14% of settlement	14
Total	13,434 plus VAT

If the claimant accepted nothing and discontinued the claim, then the defendant would get: 

	£
Fixed Costs	13,420
14% of damages claimed	14,000
Total	27,420 plus VAT

There is no doubt that rather than softening the effect of late acceptance within the same stage, as I originally thought, the new scheme is much harder on late accepting claimants than the old scheme.

A late accepting defendant suffers no penalty.

With all due modesty, I reckon I know a little bit about Fixed Recoverable Costs, and a little bit about Part 36.  I have not got a scooby-doo what the position is. 

I repeat my thanks to Simon Gibbs.

Civil Procedure Rule Committee

The issue was raised at the Civil Procedure Rules Committee and the minutes record the following: 

“25. Costs consequences of acceptance of a Part 36 offer. A barrister has raised a point regarding the new wording in Part 36 and whether the reference in rule 36.23(9) to the costs that ‘a defendant’ may receive, should in fact be to ‘a claimant’. With the assistance of the lead drafting lawyer, the sub-committee have (sic) carefully considered the point and concluded that the language in the rule does not required (sic) amendment because it concerns the fixed costs applicable to that stage, i.e. not up to and including that stage and this was AGREED.”

The Rule, and indeed the whole concept of parties swopping costs for the same stage is so counterintuitive that it is causing much confusion.

Why did the Civil Procedure Rule Committee not choose to clarify it, by improving the wording?

The reference back to CPR 36.23(3) is not helpful.

The Rule Committee refers to the claimant’s costs being “up to and including that stage”, but that is not what CPR 36.23(3) says, although I think that is what it means.

An Alternative Scenario

Supposing that I, and the Judge in the case above are wrong, in that where a claimant accepts the defendant’s Part 36 offer late, then the defendant gets either just the costs of the stage in which the offer was accepted, which seems counterintuitive, or gets the costs from the date the offer expired to the date it was accepted, but not costs for the pre-offer period. 

Where parties get costs from each other for the same stage, is a claimant better off accepting even later and forcing the matter into the next stage? 

I have looked at this extensively in my piece 

PART 36, FIXED RECOVERABLE COSTS AND CLAIMANT’S LATE ACCEPTANCE.

CPR 36.23(9) provides

“(9) Where— 

1. an order for costs is made pursuant to paragraph (3); and 

• the stage applicable at the date on which the relevant period expires and the stage applicable at the date of acceptance are the same,  

the defendant is entitled to the fixed costs applicable to that stage.”

I refer to the minutes of the Civil Procedure Rule Committee, at paragraph 25 above.

The Rule Committee refers to the claimant’s costs being “up to and including that stage”, but that is not what CPR 36.23(3) says, although I think that is what it means.

The current position is that if the time for acceptance of an offer expires in say Stage 3 and is accepted in Stage 4, then the claimant gets costs for Stages 1 to 3 inclusive, less the defendant’s costs for Stage 4.

By virtue of CPR 36.23(9), where the expiry date and the acceptance are in the same stage, then both parties get the costs of that stage.

Thus, the claimant gets the cumulative costs to Stage 3, and the defendant would also get Stage 3 costs, but only Stage 3 costs and not the cumulative costs as my reading of CPR 36.23(8) is that the defendant gets the costs for the stage applicable at the date of acceptance, but not for the previous stages.

One would think that it cannot be the case that the defendant gets all the cumulative fixed costs to date, whenever the offer was made. If that was the case, then a defendant making an offer towards the end of the case would get full costs for all the stages when no offer had been made. Remember this is an alternate view to the main argument above where I state the following:

I cannot see how CPR 36.23(8) can be read any other way.

An alternative reading could be that the defendant only gets the costs

‘for the stage applicable at the date of acceptance’, 

that is just that stage but that makes no sense either as in the example just given, the defendant would be deprived of its costs for Stages 4, 5, 6, and 7 even though time for acceptance of the offer expired in Stage 3. 

The Rule Committee makes the point about CPR 36.23(9) that it does not say “up to and including that stage” and nor does CPR 36.23(8).

The Rule is hopelessly confused, but as far as I understand it that means the position is as follows:

1. The defendant makes an offer in Stage 3, and it is accepted late in Stage 3.

Consequences:

The claimant gets cumulative costs to Stage 3, and the defendant gets Stage 3 costs alone from the claimant.

• The defendant makes an offer in Stage 3, and it is accepted late in Stage 4.

Consequences:

The claimant gets cumulative costs to Stage 3, that being the date on which the relevant period expired, but the defendant only gets Stage 4 costs, not cumulative costs and does not get Stage 3 costs.

If that is correct then a claimant who is already out of time for accepting within the same stage that the offer was made, may be better off deliberately delaying acceptance until the next stage.

Here is an example, utilizing the above two scenarios and based on a matter in Intermediate Track, Complexity Band 4, where a Part 36 offer is made in Stage 3 for £80,000 and is accepted late.

In scenario 1, where the defendant makes an offer in Stage 3, and it is accepted late in Stage 3

The claimant gets

	£
Fixed sum	13,420
14% of damages	11,200
Total	24,620

Set off against that sum is the amount that the defendant gets:

	£
Stage 3 – as above	24,620
Less Stage 1 costs	16,001
Total	8,619

Reconciliation:

	£
Claimant’s costs	24,620
Less defendant’s costs	8,619
Balance due to claimant	16,001

Scenario 2

Claimant’s Costs

As above – £24,620

Defendant’s Costs 

The defendant gets the difference between Stage 3 costs and Stage 4 costs.

The Stage 3 costs figure is £24,620.

We must now look at Stage 4 costs and then look at the difference.

Stage 4 Costs

	£
Fixed costs	16,517
16% of damages (£80,000)	12,800
Total	29,317

Calculating the difference

	£
Stage 4 costs	29,317
Less Stage 3 costs	24,620
Balance	4,697

Reconciliation 

	£
Claimant’s costs	24,620
Less defendant’s costs	4,697
Balance due to claimant	19,923

Thus, the claimant is £3,922 better off by deliberately delaying acceptance until the next stage is reached.

Other areas of Confusion

Here is the text of an email from the Defence Costs Expert, Simon Gibbs, whose excellent blog is here. 

CPR 36.23(3) provides that a C must pay a D’s costs upon late acceptance of a Part 36 offer “in accordance with paragraph (8)”.

Paragraph (8) then states the D gets fixed costs for the applicable stage “less the fixed costs to which the claimant is entitled”.

 Assuming that CPR 36.23(6) does apply to both C’s and D’s costs, this means that the D will just get the difference in costs between the two stages.

 For example, fast-track, complexity band 4 where Part 36 expired in Stage A and the Part 36 offer is accepted late in Stage B(1), the Defendant gets £3,097 plus 40% of damages less £2,684 plus 15% of damages.

However, this is “subject to paragraph (9)”. I take this to mean that paragraph (9) takes precedence (where relevant) over paragraph (8). Paragraph (9) does not simply vary paragraph (8) but replaces it.

Paragraph (9) then provides that where “the stage applicable at the date on which the relevant period expires and the stage applicable at the date of acceptance are the same … the defendant is entitled to the fixed costs applicable to that stage”.

 However, there is no mention of the D’s costs being “less the fixed costs to which the claimant is entitled”.

 Does this not mean that in a fast-track, complexity band 4 where Part 36 expired in Stage B(1) and the Part 36 offer is accepted late in the same stage (Stage B(1)), the Defendant gets the full £3,097 plus 40% of damages without reduction?

 In other words, the C’s costs are completely wiped out despite the D only making a Part 36 part way through the claim. Is this a drafting error?

 If the C’s costs are, in fact, to be deducted, where do the rules provide for this?

Here is another comment from Simon: 

CPR 36.23(3)(b) states that a C’s late acceptance of a D’s Part 36 offer entitles the D to costs in accordance with paragraph (8).

CPR 36.23(8) refers to “where the court makes an order for costs in favour of the defendant”. But what “order for costs” made by the court will there be? I looked at this issue here: Fixed costs and deemed orders for costs – Legal Costs Specialists – Gibbs Wyatt Stone (gwslaw.co.uk). 

CPR 36.13(4) does not seem to have any application to FRC matters. What is “where the court makes an order for costs” meant to mean? Cartwright seems to suggest that a settlement reached by the parties is not an order made by the court.

Clarification (!) By the Civil Procedure Rules Committee 

Following what is termed clarification by the Civil Procedure Rules Committee, it now appears that a claimant who accepts late in the same stage as the offer is made, gets no costs for that stage and must pay the defendant’s costs.

The claimant gets the costs for the completed stages prior to the stage in which the offer was made.

Let us take a simple case in Stage 1.

A defendant makes a Part 36 offer, and it is accepted in time and so the claimant gets all the costs. That is simple and clear.

Late Acceptance 

There are three possibilities on late acceptance.

The same scenario as above except the claimant accepts one day late and no further has been done.

1. The claimant gets costs and the defendant does not.

• The costs for each stage that set themselves off, that is that both parties get costs for that stage, and you may think that they would simply cancel each other out, although not necessarily for the reason set out above.

• The claimant gets no costs, and the defendant gets all the costs for that stage. 

On balance, if you can have a balance between three different possibilities, my view is that the last analysis is correct.

The defendant gets the full cost for that stage. 

Here is Minute 15 from the Civil Procedure Rules Committee. 

15	Part 36 & FRC    Some confusion has arisen over the wording with Part 36.23(9).    This provides that if a Part 36 offer was accepted late within the same Stage then “the defendant is entitled to the fixed costs applicable at that stage”. This suggests that late acceptance within the same Stage would nullify any Claimant costs entitlement. This appears to be extremely punitive.	Mr Justice Trower drew attention to the text in the rule, which reads, “to” [that stage], not “at”. This point has been considered by the committee and it was confirmed that the use of the word “to” is intentional.     The inclusion of rule 36.23(9) arose from a query as to who should be entitled to the costs of a stage where both the relevant period had expired and the offer was subsequently accepted within that stage (including whether, and if so how, the costs of that stage should be divided between the parties).
	Confusion arises, however, as 36.24(9) provides that where a Part 36 offer is accepted late by a Claimant then the Defendant would be entitled to “applicable fixed costs […] less the fixed costs to which the Claimant is entitled […]”.     This would suggest that a Defendant would receive nothing as their entitlement would be the same as the Claimant, so the Defendant’s entitlement would be nullified. Given the Defendant would be responsible for the same level of FRC irrespective of when an offer was accepted within the same stage then this appears to be logical.    Can the Committee clarify which interpretation of the rules is intended?	The decision was that, in these likely rare circumstances, the claimant should be entitled to the costs for the stages up to, but not including, the stage when the relevant period expired, and the defendant should be entitled to the costs for the stage when the relevant period expired and the offer accepted.    Without this provision, in these circumstances, paragraphs (3)(a)(i) and the full-out in paragraph (8) would likely mean that the defendant would receive no costs notwithstanding the claimant’s late acceptance of the offer.    The costs for each stage being inclusive of the costs for the preceding stage(s), the defendant’s entitlement to the costs of that stage must be calculated by subtracting the FRC that have accrued in the preceding stages.

1. Are there any issues with the interpretation of CPR 36 as a result of te Part 45 changes?

            Please see above.

1. ls it sufficiently clear that additional costs relating to vulnerability or exceptional circumstances would be included in costs consequences under Part 36? If not, please share your reasons and/or suggestions for how this could be clarified.

            I do not understand the question. 

 Whether there are costs consequences under Part 36 is dependent upon damages and  whether or not an offer has been matched or beaten, and the additional costs relating  to vulnerability or exceptional circumstances have no bearing on that; they are  freestanding whether or not a Part 36 offer has triggered additional costs consequences. 

 Vulnerability or exceptional circumstances do not affect damages, and therefore, do not  affect whether Part 36 consequences are triggered. 

 If they are, and there is also vulnerability or exceptional circumstances, no doubt the  position is that the court would assess costs and then, in the event of a successful claim,  add the 35% uplift to that total. 

 In relation to a successful defendant, the claimant would be liable for those additional  costs in any event, and there may be an issue as to how the court allocates those  additional vulnerability/exceptional circumstances costs for the period before the expiry  of the relevant period, or after. 

• Housing

1. ln what circumstances will costs be awarded in disrepair and/or possession claims? Where they are, what level of costs are usually awarded? Are there features distinctive to disrepair and/or possession claims which influence this?

Costs follow the event in the usual way. 

1. Are these costs proportionate to the type and complexity of the claim?

Costs in Housing Disrepair and/or possession claims are governed the ordinary costs regime outside Fixed Recoverable Costs and are required to be proportionate by the Civil Procedure Rules and are no different from any other type of non-Fixed Recoverable Costs civil claim in that sense. 

1. Please share any initial views you may have about whether and how FRC could work for housing possession and/or disrepair claims.

Housing possession and/or disrepair claims should be brought within the Fixed Recoverable Costs and in my view, there is nothing special or unusual about such claims which means they should be exempted from this scheme, whereas virtually all other civil work of very different kinds are within the scheme. 

Having said that, there is clearly an imbalance of power, generally, between a tenant and landlord and the answer is to have a system of Qualified One-Way Costs Shifting for such claims but bring them within the Fixed Recoverable Costs scheme. 

• Other Exemptions

1. Are the FRC exemptions under CFR 26.9(10) sufficiently clear to practitioners and claimants? If not, please provide your reasons.

Yes

1. Are any amendments required to CPR 26.9(10)? If so, what are these? Please provide your reasons.

If the current exemptions remain, then no change to the wording is needed, but as will be seen, my view is that all exemptions should be removed, and therefore, the wording would be removed in its entirety. 

1. Do you consider that any of these exemptions should be reviewed? If so, please provide your reasons. 

All the exemptions should be reviewed, and in my view, all of the exemptions could be removed and all cases brought within the Fixed Recoverable Costs scheme. 

It may be that there would need to be different figures as there are for Noise Induced Hearing Loss claims. 

There may also need to be separate rules for certain cases. 

For example, all the matters listed, generally exempted because they are thought to involve additional work etc. could automatically be assigned to Intermediate Track Band

4. 

This would have the benefit of absolute certainty from the beginning as to the costs position, as well as giving defendants in particular incentive to settle early to avoid the rising scale in Fixed Recoverable Costs cases. 

Mesothelioma and Clinical Negligence claims are already covered by Qualified One-Way Costs Shifting and consideration should be given to extending that protection to other types of cases, for example false imprisonment and claims against the Police generally. 

• Application of FRC in different types of claims

19. a)  Claims for or including non-monetary relief

 There is a contradiction here in that generally it is stated that claims for or including  non-monetary relief should not be subject to the Fixed Recoverable Costs system,  but there is then provision for placing a costs value on such claims. My view is that  the starting point should be that all civil claims, including those for non-monetary    relief should be brought within the Fixed Recoverable Costs scheme. 

• Where more than one claimant is represented by the same lawyer

                   No

• Counterclaims

                   No

• Where there is a preliminary issue trial

                   No

• Noise Induced Hearing Loss

 I appreciate that the whole idea of Fixed Recoverable Costs is to introduce certainty, but that certainty can be maintained by having a separate Fixed Recoverable Costs scheme for certain types of case, which is the position in relation to Noise Induced Hearing Loss claims, and as indicated above, having separate Fixed Recoverable Costs schemes for certain types of currently exempted cases, would allow the scheme to be extended. 

• Clinical Negligence 

I have not seen an incident of a Clinical Negligence claim being allocated to the Intermediate Track. 

• Unreasonable Behaviour

• Are you aware of any applications made to decrease and/or increase the FRC payable on the basis of unreasonable behaviour? If so, how well has this worked?

               Yes, in my position as consultant to many law firms. 

 There needs to be more certainty and consistency, but this is only likely to be achieved once cases have moved through the system and a body case law is established. 

• Are any amendments required to CPR 45.13? Please provide your reasons.

 No, but it may be helpful to clarify, as appears to be the case, that the uplift or reduction is 50% or nothing, and that there is no scope for the court to apply, say a 25% increase or reduction. 

 My view is that this makes sense as to have variable percentages would lead to further costs arguments and assessments etc. and it is for the purpose of Fixed Recoverable Costs to avoid that. 

 It also appears to be the situation that if a court makes that decision, then the 50% uplift or reduction applies to all costs and not just costs from a certain date or in relation to a certain matter. 

 Again, my view is that that makes sense for the reasons set out above in that it avoids further complexity. 

 However, that is not entirely clear from CPR 45.13 and it would be helpful to clarify these points. 

1. Inflation 

• Are you aware of any reason why any of the FRC figures should be reviewed before 2026?

 The Consultation ends on 5 January 2026 and therefore, any response is inevitably after the time for introducing changes “before 2026”.  

 Generally, Fixed Recoverable Costs should be uprated each year by reference to inflation as with Guideline Hourly Rates.

1. Disbursements 

• Do you have any observations on the recovery of disbursements?

              No. 

• How is the 20-page limit for expert reports in intermediate track claims working in practice?

 I have only limited experience of the 20-page limit for expert reports, but I agree with the principle. 

• Are you aware of any requests to extend the 20-page limit? If so, please share any data or information that you have. 

              No. 

1. Fixed Costs Determination

• Do you find it easy to submit a Precedent U? Is it clear what information should be included? If you answered no to either question, please provide your reasons.

               Yes

1. Vulnerability

• Can you provide any evidence or estimates of how often a party or witness’ vulnerability necessitates additional work?

 In my experience, it is rare and additional work is much more common due to other factors, such as a party being a minor or lacking capacity, or having a poor grasp of English.

• If so, please provide details of the nature of this vulnerability and additional work, and how much additional time is required to undertake it.

               Given my answer to the above, I cannot provide any details. 

• Are any amendments required to CPR 45.10? Please provide your reasons. 

               No. 

1. Conclusion

• Do you have any further information or views to provide which are not covered by Questions 1 – 28?

 My strong view is that Fixed Recoverable Costs generally have worked well although inevitably, there have been teething problems. 

 One of the key issues is to uprate Fixed Recoverable Costs for inflation, which happens with Guideline Hourly Rates, but has not traditionally happened with Fixed Recoverable Costs. 

 As indicated, the Complexity Bands in the Intermediate Track could be reduced from 4 to 3 which will slightly simplify matters. 

 It would also be helpful if guidance could be given in the Civil Procedure Rules and/or Practice Directions as to the types of matters which are likely to go into any given Complexity Band. 

 The information in the Fast Track is reasonably detailed, but in the Intermediate Track, it is very vague. 

               The key, obviously, is certainty. 

 There is no reason why there should not be guidance by way of Practice Directions in relation to different types of work to indicate what factors in that type of work will lead to the matter being assigned to a particular Complexity Band and the costs are very different between the different bands, and therefore, Fixed Recoverable Costs are not as fixed as they may seem. 

Other

Here is a piece I have written in relation to Disposal Hearings

DISPOSAL HEARINGS AND FIXED RECOVERABLE COSTS

In 

Bird v Acorn Group Limited [2016] EWCA Civ 1096

the Court of Appeal held that listing an unallocated ex-portal claim for a 10-minute disposal hearing amounted to listing the claim for trial for the purposes of the stage of the matter reached for calculating the appropriate Fixed Recoverable Costs. 

That decision has not been affected by the new Fixed Recoverable Costs scheme, including the Extension of Fixed Recoverable Costs, which came in on 1 October 2023. 

A reminder that in relation to personal injury claims, the new scheme applies where the cause of action occurred on or after 1 October 2023, and in all other cases, it applies where the matter was issued on or after 1 October 2023. 

By definition, anything which has reached the stage of a disposal hearing has been issued. 

In Bird v Acorn the court have listed the matter for a 10-minute disposal hearing, and it then settled before that hearing took place, and the matter was never allocated to a track. 

That case related to the old Table 6D, Part B and the claimant successfully argued that the disposal hearing was equivalent to a trial and therefore, the highest level of costs, those in column 3 should be applied, and the definition there read: 

On or after the date of listing, but prior to the date of trial

The defendant had argued that the first column costs were applicable, that is: 

On or after the date of issue, but prior to the date of allocation under Part 26. 

The defendant, in its unsuccessful argument, submitted that a disposal hearing was not necessarily going to be a final or contested hearing within the meaning of the then CPR 35.29E(4)(c) and that disposal hearings are specifically designed either to decide the amount in dispute or for the purposes of giving directions. 

The Court of Appeal, in a detailed decision, said that the fact that the disposal hearing might prove to be neither final nor contested, was insufficient to justify not engaging column 3 costs as much of the work necessary to prepare the claim for disposal, such as preparing and serving the requisite evidence, would have taken place following the listing of the matter for a disposal hearing. 

So, how does that tie in with the new Fixed Recoverable Costs scheme? 

The procedure in relation to disposal hearings has not changed and therefore, the principles in Bird v Acorn remain good law. 

However, the wording in the tables governing Fixed Recoverable Costs has now changed. 

CPR 45.44, Table 12 governs Fixed Recoverable Costs in the Fast Track. 

Disposal is not specifically dealt with, but there is now no separate stage once a matter has been allocated. 

Table 12 now has three stages:

1. If Parties reach a settlement prior to the claimant issuing proceedings under Part 7; 

• If proceedings are issued under Part 7, but the case settles or is discontinued before trial; 

• If the claim is disposed of at trial. 

Thus, the Bird v Acorn scenario would now come under Stage B, that is a case settling before trial. 

If it went to a disposal hearing, then it would be at Stage C, with the additional trial advocacy payable as set out in Stage D. 

That is straightforward, but there are two new kids on the block. 

First, there are now four Complexity Bands in the Fast Track and so as well as looking at the stage reached, one needs to look at the appropriate Complexity Band. 

While the level of costs at each stage and in each band are dealt with by CPR 45.44, Table 12 in the Fast Track, the issue of which Complexity Band the matter should be assigned to within the Fast Track is dealt with in CPR 26.15. 

I set that out in full below, and again, in relation to the type of matters that go to disposal hearings, it will generally be straightforward to see which Complexity Band the matter goes into. 

The fact that it has or has not been defended and is going to a disposal hearing rather than a fully contested trial affects neither the Complexity Band in the Fast Track, and nor the stage reached. 

Thus, a credit hire and vehicle damage claim where there is no personal injury, and they are a common type of claim that goes to a disposal hearing, would be Complexity Band 1 in the Fast Track

(a) Road traffic accident related, non-personal injury claims; …

Thus, if such a matter is settled before trial and after proceedings have been issued, whether or not it has been listed for a disposal hearing, it will be Stage B, Complexity Band 1. 

However, few things are simple in the world of Fixed Recoverable Costs and Stage B itself in the Fast Track has three sub-stages as follows: 

1. On or after the date that the court issues the claim, but before the date that the court allocates the claim under Part 26; 

• On or after the date that the court allocates the claim under Part 26, but before the date that the court lists the claim for trial; 

• On or after the date that the court lists the claim for trial but before trial. 

There, we have the same issue as occurred in Bird v Acorn. 

The matter is listed for a disposal hearing but settles. 

Following Bird v Acorn, that must be sub-section (3) of Stage B, that is: 

3. On or after the date that the court lists the claim for trial but before trial. 

The alternative interpretation is that it is (1) –

 “On or after the date that the court issues the claim, but before the date that the court allocates the claim under Part 26, but before the date that the court allocates the claim under Part 26,”

 is the argument rejected by the Court of Appeal in Bird v Acorn.

The difference in costs is significant, both between Stage B (1) and Stage B (3), and in the different Complexity Bands. 

In Complexity Band 1 all costs are fixed with no add-on as a percentage of damages, whereas in Bands 2, 3, and 4, there is a lower fixed fee, but a significant damages-based add-on. 

Thus, a £25,000 claim in the Fast Track under Stage B (1) attracts Fixed Recoverable Costs of £2,168. 

Such a claim in Stage B (3) in Complexity Band 4 attracts a fee of £18,155 being £8,155 plus 40% of damages. 

That is the Fast Track. 

The Intermediate Track is structurally very different. 

As far as an assignment to Complexity Band is concerned, it is hard to see that any claim listed for a disposal hearing would go into any  other than Complexity Band 1 which reads:

Any claim where—

• only one issue is in dispute; and

• the trial is not expected to last longer than one day, including—

i)          personal injury claims where liability or quantum is in dispute; ii)            road traffic accident related, non-personal injury claims; and iii)     defended debt claims. 

Assignment within the Intermediate Track is dealt with by CPR 26.16, Table 2. 

If the matter in the Intermediate Track goes to a disposal hearing, then that is Stage 8: 

From the end of Stage 6 up to the date of the trial. 

In addition, trial advocacy fees and sitting behind counsel’s fees would be payable under the provisions of Stage 9 and 10. 

I will not set out the 16 stages of the Intermediate Track but suffice to say that they are not clear as far as matters which have been listed for a disposal hearing but then settles. 

On balance, my view is that such matters come within Stage 6: 

From the end of Stage 5 up to and including the date set for the pre-trial review or up to 14 days before the trial date, whichever is earlier. 

If the matter settles less than 14 days before the disposal hearing, then my view is that that is the full trial costs, except the advocacy fees, payable under Stage 8: 

From the end of Stage 6 up to the date of the trial. 

I said above that there were two new kids on the block, and one of them is Complexity Bands which I have dealt with. 

The other is the tapering provisions for the advocate’s fee if the matter is settled or adjourned, or vacated or whatever, on the day of trial, or shortly before trial. 

Settlement presents no inherent problem as that is a line in the sand – the matter ends on settlement and if that is on the day of trial, or shortly before trial, then the tapering provisions identify clearly what percentage of the advocate’s fee is payable.  

That applies in both the Fast Track and the Intermediate Track, but with differing tapering provisions, which I set out below.

If the matter is adjourned, or vacated, or whatever, due to no judges being available, then the usual provisions apply, which is that the tapered advocate’s fee becomes costs in the cause, in other words, when the matter is eventually heard, the successful party stands to gain two advocacy fees, one for the adjourned or vacated hearing, and one for the hearing which ultimately takes place. 

Given the state of the courts, especially in the south of England, there could be three or more advocacy fees. 

If the matter settles after the disposal hearing has been adjourned or vacated, then the position is straightforward and that is that the successful party gets fees for the appropriate stage – Stage B (3) in the Fast Track and Stage 8 in the Intermediate Track – plus any tapered advocate’s fee. 

As we have seen, disposal hearings often turn into directions hearings, and indeed that is specifically provided for in the procedure listing the matter for a disposal hearing. 

Thus, a disposal hearing turns into a directions hearing, and directions are then given. 

In the Fast Track, that appears to kick the matter back into Stage B (1) or, assuming that the court then allocates the claim, Stage B (2). 

That was an argument raised in Bird v Acorn. 

A counter argument is that it stays in B (3) as although the trial did not take place the court had listed the claim for trial and that decision cannot retrospectively be wiped out, even though the trial did not take place. 

In the Intermediate Track, where the stages deal with service of Witness Statements, disclosure, etc, none of which will normally take place where a disposal hearing is listed, the position is far less clear. 

Does it stay in Stage 8: 

From the end of Stage 6 up to the date of the trial, 

even though the trial became a directions hearing? 

Or should it be Stage 5: 

From the end of Stage 4 up to and including the later (sic) of the dates set by the court for service of witness statements or expert reports.  

I have looked at this in the context of a disposal hearing, but the situation will arise in other areas. 

A matter is listed for a three-day Intermediate Track trial, and when the trial starts, it is adjourned. 

This could happen for a number of reasons, for example, the Judge recuses herself or himself, or a witness or a party is ill or unavailable or whatever. 

The same issue arises. 

If a disposal hearing or a conventional hearing turn into a directions hearing or is adjourned or whatever, my view, based on Bird v Acorn, is that the advocate still gets the full fee as she or he has had to prepare for a full trial, even though it then turns into what might be a 15-minute hearing. 

That raises the issue of whether the advocate gets the full fee for the second or third hearing, having already prepared the case, and this crops up where the case is adjourned for any reason, e.g., lack of availability of a Judge. 

The answer appears to be yes, that is that the full advocacy fee is payable again, but not any additional fee for further preparation of the case, as that has been absorbed within the stages in the Fast Track and Intermediate Track in any event. 

Thus, the additional work done by Instructing Solicitors in preparing fresh instructions to counsel, maybe taking into account developments that have occurred since the adjourned trial, and counsel re-reading the papers, etc, attracts no additional fee. 

For the sake of completeness, I now set out the tapering provisions for the advocate’s fee, which is different in the Fast Track as compared within the Intermediate Track.

Fast Track

(5) Where the claim is listed for trial, but is removed from the list or settled—   on the day of trial; or not more than 1 day before the date listed for trial	100% of the applicable trial advocacy fee
(6) Where the claim is listed for trial, but is removed from the list or settled more than 1 day, but not more than 2 days, before the date listed for trial	75% of the applicable trial advocacy fee”.

Trial advocacy fees: Table 12(5) and (6)

In calculating the number of days, rule 2.8(2) shall not apply and any advocacy fee is to be computed by reference to the following examples.

Examples

• A claim allocated to the fast track is settled not more than 1 day before the date listed for trial.

The trial date is Monday 23 October.

Settlement not more than 1 day before the date listed for trial, means that the claim was settled on or after Friday 20 October, but before Monday 23 October.

• A claim allocated to the fast track is removed from the list not more than 1 day before the date listed for trial.

The trial date is Thursday 26 October

Removal from the list not more than 1 day before the date listed for trial, means that the claim was removed from the list on Wednesday 25 October.

• A claim allocated to the fast track is settled more than 1 day, but not more than 2 days, before the date listed for trial.

• The trial date is Monday 23 October.

 Settlement more than 1 day, but not more than 2 days, before the date listed for trial,  means  that the claim was settled on Thursday 19 October.

• The trial date is Thursday 26 October.

 Settlement more than 1 day, but not more than 2 days, before the date listed for trial,  means  that the claim was settled on Tuesday 24 October.

Intermediate Track

S16 Advocacy fee— (a) where the claim is listed for trial, but is removed from the list or settled—   (i) on the day of trial; or   not more than 1 day before the date listed for trial;	100% of the applicable advocacy fee in S10
(b) where the claim is listed for trial, but is removed from the list or settled more than 1 day, but not more than 5 days, before the date listed for trial	75% of the applicable advocacy fee in S10

Trial Advocacy Fees: Table 14

Trial advocacy fees

In calculating the number of days, rule 2.8(2) shall not apply and any advocacy fee is to be computed by reference to the following examples.

Examples

• A claim allocated to the intermediate track is settled not more than 1 day before the date listed for trial.

The trial date is Monday 23 October.

Settlement not more than 1 day before the date listed for trial, means that the claim was settled on or after Friday 20 October, but before Monday 23 October.

• A claim allocated to the intermediate track is settled more than 1 day, but not more than 5 days, before the date listed for trial.

The trial date is Friday 27 October.

Settlement more than 1 day, but not more than 5 days, before the date listed for trial, means that the claim was settled on or after Friday 20 October, but before Thursday 26 October.

• A claim allocated to the intermediate track is removed from the list more than 1 day, but not more than 5 days, before the date listed for trial.

The trial date is Thursday 26 October.

Removal from the list more than 1 day, but not more than 5 days, before the date listed for trial means that the claim was removed from the list on or after Thursday 19 October, but before Wednesday 25 October.

5 January 2026

Kerry Underwood

Senior Partner

Underwoods Solicitors

Chair, Law Abroad Limited

Court’s Powers When A Party Dies

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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In

Currie v Thornley & Anor [2019] EWHC 172 (Ch) (01 February 2019)

the court was faced with a situation where one of two defendants in a civil action had died, and the defendant who died had already given evidence, and died before judgment.

At the relevant time none of the three executors had confirmed their willingness to be appointed. Two had refused, and one was considering his position.

The judge applied the provisions of CPR 19.8(1), and CPR 19.8 reads:

“(1) Where a person who had an interest in a claim has died and that person has no personal representative the court may order –

(a) the claim to proceed in the absence of a person representing the estate of the deceased; or

(b) a person to be appointed to represent the estate of the deceased.

(2) Where a defendant against whom a claim could have been brought has died and –

(a) a grant of probate or administration has been made, the claim must be brought against the persons who are the personal representatives of the deceased;

(b) a grant of probate or administration has not been made –

(i) the claim must be brought against ‘the estate of’ the deceased; and

(ii) the claimant must apply to the court for an order appointing a person to represent the estate of the deceased in the claim.

(3) A claim shall be treated as having been brought against ‘the estate of’ the deceased in accordance with paragraph (2)(b)(i) where –

(a) the claim is brought against the ‘personal representatives’ of the deceased but a grant of probate or administration has not been made; or

(b) the person against whom the claim was brought was dead when the claim was started.

(4) Before making an order under this rule, the court may direct notice of the application to be given to any other person with an interest in the claim.

(5) Where an order has been made under paragraphs (1) or (2)(b)(ii) any judgment or order made or given in the claim is binding on the estate of the deceased.”

It will be noted that once a Grant of Probate, or Letters of Administration, have been granted, the court has no power to allow the claim to proceed in the absence of a person representing the estate of the deceased.

This may mean that there will be circumstances where it is in the interest of the estate of the deceased party to delay obtaining a Grant of Probate or Letters of Administration so as to allow CPR 19.8(1) to be applied.

Obtaining a Grant of Probate or Letters of Administration inevitably takes some time, and therefore it may be quicker, and preferable for all parties, for the court to allow the claim to proceed in the absence of a person representing the estate of the deceased.

Fresh Proceedings Possible When Previous Proceedings On Behalf Of Deceased Were A Nullity

In

Personal Representatives of Hutson and another v Tata Steel UK Ltd [2019] EWHC 143 (QB) (1 February 2019)

in a group action seeking compensation from an employer for injuries and loss caused by harmful fumes and dust, the High Court granted various applications to extend time for entering the Group Litigation Order, thereby allowing cases to proceed.

Some employees had died and claims were advanced by their estates.

In three cases, the claim had purportedly been entered on the Group Litigation Order register but the requisite formalities had not been complied with before the deadline.

The court confirmed that fresh proceedings on behalf of a deceased could be issued, noting that as a matter of law, any claim purportedly commenced by a deceased party was a nullity which was incapable of subsequent rectification

(Kimathi v Foreign and Commonwealth Office (No 2) [2016] EWHC 3005.)

However, the court accepted the claimants’ argument that the fact that a claim is a nullity does not preclude the commencement of a subsequent claim which is not.

There may be circumstances in which the subsequent claim could be struck out as an abuse of the process of the court but, until this happens, the second claim was procedurally valid.

Otherwise, where an action was commenced on behalf of a claimant who had, unbeknown, died on the previous day, it would be extraordinary that his estate was thereby precluded from starting a fresh action if it was properly constituted.

The court had a discretion to extend the time within which the three claims could be entered on the register and that discretion was extended by reference to the tests for relief from sanctions established in

Denton v TH White Ltd [2014] 1 WLR 3926

and the overriding objective.

Although the defaults were serious and significant and due to culpable oversight, considering all the circumstances, the court granted relief.

The breaches did not significantly prevent the court or the parties from conducting the litigation efficiently and at proportionate cost and there had not been a history of non-compliance.

It was just to extend time.

The timetable for the future progress of the Group Litigation Order was not jeopardised, it would not save any expense to refuse and the defendant could not show real prejudice if time was extended.

This piece, in slightly different form, first appeared on the Practical Law Dispute Resolution Blog.

and in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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In

Barker v Confiànce Ltd & Ors [2019] EWHC 1401 (Ch) (05 June 2019)

the Chancery Division of the High Court considered the issue of costs orders against parties who are minors and/or their litigation friends, holding that there were no special principles preventing a costs order being made and that the court must consider all of the circumstances of the case.

Here, in a claim involving a number of child claimants, two of the children made an application which was dismissed and the respondents sought costs against the children and/or the litigation friend, who had not given the normal undertaking to pay costs, as required by CPR 21.4(3)(c), if the party is a claimant.

The decision contains a detailed discussion of the law in this area and the court rejected an argument that the litigation friend was only liable to pay costs in cases of gross misconduct.

The case also sets out the considerable duties of a litigation friend, something to which solicitors for litigation friends and their clients often pay scant attention.

The court said that there was a long line of cases, dating back nearly 300 years, which established the practice that in a case of an unsuccessful claim by a child claimant acting by a litigation friend, the usual order is that the litigation friend will be ordered to pay the successful defendant’s costs (Paragraph 26).

In effect, the courts treat the litigation friend as being responsible for the costs which would otherwise be ordered against the child if that party had been an adult.

Section 51 of the Senior Courts Act 1981 is couched in very wide terms and clearly allows this practice to continue to be applied, as does CPR 44.2(4).

The court held that the reasoning in the pre-Senior Courts Act cases remains valid, and that nothing in the Act or the Civil Procedure Rules calls for it to reconsidered.

In spite of the wording of CPR 21.4(3)(c), the court here held that a litigation friend for a defendant could be ordered to pay costs.

On the issue of liability of a litigation friend for costs the court said:

“53. When considering whether to make an order for costs against a litigation friend, who has acted for an unsuccessful child party, the court should apply the general approach that, as regards costs, the litigation friend is expected to be liable for such costs as the relevant party (if they had been an adult) would normally be required to pay. The governing rule is that the court has regard to all the circumstances of the case and it is open to the litigation friend to point to any circumstance as to their involvement in the litigation which might justify making a different order for costs from that which would normally be made against an adult party.”

As to the issue of an order for costs in favour of a litigation friend the court said:

“55. The position appears to be that a child or protected party who acts by a litigation friend and who would, applying the usual principles as to costs, be entitled to an order for costs in his favour, will be entitled to an order which makes the paying party pay the costs incurred by the litigation friend. It is not open to the paying party to say that as the party entitled to recover costs was a child or a protected party, they did not incur any costs because they did not retain the solicitors who were instead retained by the litigation friend.”

The court also said that the practice in a case involving a litigation friend is not to apply the indemnity principle so as to hold that the child has incurred no costs and so is not entitled to recover costs.

The costs incurred by the litigation friend are considered to be the costs of the party.

“Another way of analysing the matter might involve holding that the litigation friend is entitled to an indemnity from the party for whom they were the litigation friend and, in that way, the party does incur the liability for the costs in question.” (Paragraph 99).

Costs Against Children

The court reviewed case law going back to 1725 and concluded that there is no general rule that the court will not make an order for costs against a child unless it has been guilty of fraud or gross misconduct.

Rather, as always, the general rule is that the court must consider all of the circumstances of the case.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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Prior to the Legal Services Act 2007 there is no doubt or dispute that employees of law firms could conduct litigation, under regulatory supervision, and there was no intention to alter that position. 

Legal Services Act 2007 S.18(1)(a) defines ‘authorised person’ as “a person authorised to carry on the relevant [reserved] activity by a relevant approved regulator…”

 S.18(3) begins:

 “But where a body (“A”) which is authorised as mentioned in subsection (1)(a) becomes a licensable body…”

Ignore the reference to licensable body, that is not relevant. 

The point is that S.18(3) implicitly recognises a ‘body’ as capable of being “authorised as mentioned in subsection (1)(a)”. In other words, an ‘authorised person’ can be either a natural person or a body.  

So, if the body is a law firm, and is authorised pursuant to S.18(1)(a), surely the whole of that body including its employees is authorised? 

Otherwise, what happened to the entity as a legal person, distinct from its employees?

If the intention had been to entitle ONLY natural persons, duly authorised, to carry on reserved activities, there would have been no need for the Act to include ‘body’ within the meaning of ‘authorised person’.

Conversely, if the intention was to entitle bodies to carry on reserved activities (as S.18(3) implies) but

ONLY through employees who are themselves authorised natural persons, the Act should have said so.

There would need to be an additional clause, probably between the existing S.18(2) and (3), to the effect that 

“An ‘authorised person’ can be a body or a natural person, but the entitlement of a body to carry on relevant reserved activities exists only to the extent that the acts in question are performed by natural persons who themselves are authorised persons”.

As mentioned below S.21(3) does not grant employees the right to conduct litigation, but neither does it disqualify a non-authorised person from carrying on reserved activities as an employee of an authorised body. 

In fact, S.21(3) neither grants nor declines rights of any kind. Its purpose is simply to define the scope of “regulated person”.  

Indeed, the whole of S.21 is merely a descriptive provision outlining the scope of the regulator’s responsibilities.

If the purpose of S.21(3) was to disqualify non-authorised natural persons from carrying on reserved activities as employees of an authorised body, (a) it would render S.18(3) meaningless; and (b) it would have said so.

Schedule 2, para 4(2) LSA – not discussed in Mazur – states:

“But the “conduct of litigation” does not include any activity within paragraphs (a) to (c) of subparagraph (1), in relation to any particular court or in relation to any particular proceedings, if immediately before the appointed day no restriction was placed on the persons entitled to carry on that activity.”

The appointed day was 1 January 2010.

As CILEX has obtained permission to appeal to the Court of Appeal in 

Mazur & Anor v Charles Russell Speechlys LLP [2025] EWHC 2341 (KB),

 it is worth continuing to explore the arguments that might be advanced as to why Mazur was wrong. The hearing of the appeal has now been listed for 24 February 2026.

One of the first to question the correctness of the decision was Ben Williams KC. Anything he has to say about anything is worth paying attention to. The first comment I have seen was posted on Twitter shortly after the judgment was handed down:

“I am a long way from getting to the bottom of this, but it seems odd that there is no reference to the apparent saving provision in paragraph 4(2) of Schedule 2’s definition of ‘the conduct of litigation’.”

Paragraph 4 of the Legal Services Act 2007 states:

“(1) The “conduct of litigation” means—

the issuing of proceedings before any court in England and Wales,

the commencement, prosecution and defence of such proceedings, and

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

(2) But the “conduct of litigation” does not include any activity within paragraphs (a) to (c) of subparagraph (1), in relation to any particular court or in relation to any particular proceedings, if immediately before the appointed day no restriction was placed on the persons entitled to carry on that activity.”

The point here is that if unauthorised employees of solicitors were permitted to conduct litigation before the Legal Services Act 2007 came into force, then paragraph 4(2) preserves that right. 

Mazur focused on paragraph 4(1) and completely ignored paragraph 4(2).

Ben Williams KC posted a more detailed discussion of Mazur in a comment to one of the earlier posts on this blog and it is worth repeating for those who missed it:

“The legal profession has a short memory. 

I suppose the typical career is about 30 years long, but a lot of people will drift from one area of practice to another, so even an old-timer may well only have 10 or 20 years of memory of a particular practice area. 

This may mean that even once famous cases, household names to lawyers in a specific field, can be forgotten within a couple of decades.

One such is Hollins v Russell. Once cited dozens of times a day, it became largely historical with the LASPO reforms of 2013. The second half of the judgment, which deals with the Accident Group, was largely forgotten even before that. TAG went into administration in 2003, and I suppose its run-off cases were done by 2007. Who has looked at the second part of Hollins v Russell since then?

People should look at it now. Paragraphs 155 onwards contain a lengthy discussion, in a historical context, of solicitors’ entitlement to delegate their work to supervised but unadmitted staff. 

The court was quite clear in finding that the Courts and Legal Services Act 1990 was not intended to interfere with this. The question now is: was the Legal Services Act 2007 nonetheless intended to? 

If it was, that intention found no mention in any of the reports or consultations that led to it; nor in its White Paper, nor in its notes, nor in Parliamentary statements. 

The Act itself was intended to liberalise the legal services market, not to constrict it.

None of this was considered in Mazur. It should have been. 

The decision might be right; might be wrong (I think the latter). Whichever it is, it is surely not the last word.”

Section 207 of the Legal Services Act 2007, a definition section states:

““person” includes a body of persons (corporate or unincorporate);

“reserved legal services” means services provided by a person which consist of or include reserved legal activities carried on by, or on behalf of, that person.””

Those definitions appear consecutively, no doubt because they are in alphabetical order but it also means that if there was an error in the definition of “person” in relation to the provision of “reserved legal services” it would easily have been spotted.

There is no reason to suggest that there is any mistake.

Section 13(2) of the Legal Services Act 2007 the one that has got all the attention reads:

“(2)        A person is entitled to carry on an activity (“the relevant activity”) which is a reserved legal  activity where—

• the person is an authorised person in relation to the relevant activity, or

• the person is an exempt person in relation to that activity.”

Section 18 reads:

“(1)        For the purposes of this Act “authorised person”, in relation to an activity (“the relevant  activity”) which is a reserved legal activity, means —

(a) a person who is authorised to carry on the relevant activity by a relevant approved regulator…”

There is no doubt that the Solicitors Regulation Authority is a relevant approved regulator.

Rule 5 of the Solicitors Code of Conduct reads, where relevant:

“If you are… authorised by the SRA you are entitled to carry on –

      •     all reserved activities except notarial activities.”

Paragraph 31 of the Mazur judgment reads:

“31. The Law Society referred to the SRA’s Authorisation of Individuals Regulations which provide at paragraph 9.1 that a solicitor with a practising certificate was “entitled to carry on all reserved legal activities except notarial activities”. Further, that the SRA’s Authorisation of Firms Rules provide at paragraph 5.3 that “An authorised body may only carry on a reserved legal activity through a person who is entitled to do so”.

That cannot change the statutory definition of “person” which includes the firm of solicitors itself. I see no mention in the Mazur judgment of section 207, which is the definition section.

Although an Act of Parliament can change the law without any explanation, the usual canons of statutory interpretation means that a codifying statute is assumed not to change the law unless it is clear that it does so.

The Legal Services Act 2007 was a mixture of being a codifying statute and repealed but largely reenacted the Courts and Legal Services Act 1990 but also contained major new provisions such as the permitting of Alternative Business Structures and the establishment of the Solicitors Regulation Authority.

It was considered an Act of Parliament liberalizing the legal profession with no suggestion that there was an intention to restrict heavily the identity of those who could conduct litigation.

There is no doubt that before the Legal Services Act 2007 came into force on 1 January 2010, anyone in a law firm could conduct litigation under the supervision of an authorized person.

There is clearly an argument that the Legal Services Act 2007 preserved the status quo as to who could conduct litigation with no intention to change the law.

Both the Civil Procedure Rules and Family Procedure Rules define a legal representative (CPR 2.3): 

             ‘legal representative’ means a –

• barrister;

• solicitor;

• solicitor’s employee;

• manager of a body recognised under section 9 of the Administration of Justice Act

                         1985; or

• person who, for the purposes of the Legal Services Act 2007, is an authorised person   in relation to an activity which constitutes the conduct of litigation (within the meaning   of that Act},

             who has been instructed to act for a party in relation to proceedings;

The CPR then specifically allow a legal representative to take steps which are considered to be reserved activity of conducting litigation, including signing Statements of Truth on Statements of Case etc.

I am not convinced that any specific activity, such as signing a Statement of Truth etc., is by definition “conducting litigation”. 

My view is that there is no restriction on any person assisting and supporting an authorized person, and whether or not the matter can be properly delegated will be a matter of fact in each case. 

For example, my clear view is that provided an authorized person is conducting the litigation then there is no problem in the task of uploading a matter to a portal being delegated to an unauthorized person.

Here is an analysis by Dean Talbot, a Fellow of the Chartered Institute of Legal Executives.

S16 LEGAL SERVICES ACT (2007)- MAZUR V CHARLES RUSSELL SPEECHLEYS

ANALYSIS – 9TH OCTOBER 2025

The judge in Mazur said that S16 doesn’t make sense if employees can litigate under supervision. 

S14 deals with it being an offence if a “person” carries on a regulated activity without being entitled. So, any person/firm.

S16 deals with P’s’ liability (the firm) if E (employee) carries on a regulated activity.

16 “(1)Where subsection (2) applies it is an offence for a person (“P”) to carry on an activity (“the  relevant activity”) which is a reserved legal activity, despite P being entitled to carry on the relevant activity.

(2)        This subsection applies if –

• P carries on the relevant activity by virtue of an employee of P (“E”) carrying it on in  E’s capacity as such an employee, and

• in carrying on the relevant activity. E commits an offence under section 14.”

The judge in Mazur said that if employees were permitted to litigate under supervision, this clause would make no sense, but that contention does not allow for the fact that, in any litigation practice, not all staff are permitted to litigate under supervision. 

At every litigation legal practice, there are litigators, support staff, and sometimes other non-litigating staff. Historically, paralegals and legal executives have been able to litigate under supervision. 

Support staff cannot litigate. 

This is simply distinguishing between those at solicitors’ practices who are entitled to litigate and those who are not. And the firm is committing an offence if employees who are not entitled to litigate do so. I think the key is in 3 parts –

1) “16-

“{1) Where subsection (2) applies it is an offence for a person (“P”) to carry on an activity (“the relevant activity”) which is a reserved legal activity, despite P being entitled to carry on the relevant activity.

(2)This subsection applies if- (a)P carries on the relevant activity by virtue of an employee of P (“E”) carrying it on in E’s capacity as such an employee, and

b) in carrying on the relevant activity. E commits an offence under section 14.”

So, this clause envisages employees litigating without committing an offence (“if (a)P carries on the relevant activity by virtue of an employee of P (“EN) carrying it on in E’s capacity as such an employee, and (b) carrying on the relevant activity).

But it goes on to refer to situations where, in carrying on the reserved activity, they commit an offence. This clearly anticipates that some staff can, some staff can’t.

Remember that the LSA 2007 introduced Alternative Business Structures and the following line:

“(3)If P is a body, references in subsection (2) to an employee of P include references to a manager of P.”

…anticipates that not all staff at management level will be permitted to litigate either.

Also, if all non-authorised staff are prohibited from conducting reserved activities, as decided in Mazur, why was 16.3 necessary? All non-authorised staff are already prohibited. Why bother to add a clause for managers?

Finally on this point, the LSA, for the first time in history, opened the door to non-lawyer partners. It seems sensible to me that, in doing so, the drafters would need a provision to prevent non-lawyer partners from conducting reserved activities. Perhaps S16 was that provision.

• S207 “person” includes a body of persons (corporate or unincorporate);

“reserved legal services” means services provided by a person which consist of or include reserved legal activities carried on by. or “on behalf of” that person:”  

That’s the baseline – some staff can carry on reserved legal activities “on behalf of” P.  

This is the clause that provides the ability to conduct reserved activities under supervision. 

It is not mentioned once in the Mazur judgement.

• The judgment refers to Para 1(7)a of Schedule 3 in reference to those who “assist” in the conduct of litigation and observes that they’re exempt – while assisting.

“{7)       The person is exempt if- 

• the person is an individual whose work includes assisting in the conduct of litigation.

• the person is assisting in the conduct of litigation-

• under instructions given (either generally or in relation to the proceedings) by an individual to whom sub-paragraph (8) applies, and

• under the supervision of that individual, and…

Why is there an exemption for those assisting, but not for those litigating? Because assisting is not a reserved activity and, the Act leaves it to the authorised person to decide to whom litigation duties can be delegated (who can carry on reserved legal activities on their behalf- S207). le: the status quo, before 2007. 

This is simply separating out support workers from litigators.

Why are there exemptions for conveyancing and probate, but not litigation, because litigating under supervision was, prior to the LSA, always permitted –

Cordery on Legal Practice –

“There is, however, no equivalent exemption for persons conducting litigation under the supervision of a person who is authorised to do so. 

The absence of such a provision is curious. As set out above, the scope of the reserved legal activity of litigation is narrow. 

It may be that those drafting the LSA 2007 did not consider such an exemption was necessary because the conduct of litigation under supervision was always permitted and the LSA 2007 did not purport to change the pre-existing law. 

Such an approach would reflect the practical reality both before and after the LSA 2007.”

The judge concluded that Para 1{7)a of Schedule 3 referred to all non-authorised staff, but I believe that this is referring to support/non-litigating staff. 

If those who “assist” (support staff and/or those who work at solicitors’ practices but who are not entitled to litigate under supervision) cross the line and carry out a reserved legal activity, they are committing an offence (S14), as is the employer (S16).

So, from one reading, the act does permit legal activities to be carried on “on behalf of’ a firm, which covers the “litigating under supervision” point but providing for penalties if those who are not permitted to do so carry out reserved activities. 

I think it’s simply dealing with employees who are not entitled to litigate on behalf of their employer.

Back to me.

Can anyone head or tail of paragraph 4(2) which reads:

“2. But the “conduct of litigation” does not include any activity within paragraphs (a) to (c) of subparagraph (1) in relation to any particular court or in relation to any particular proceedings, if immediately before the appointed day no restriction was placed on the persons entitled to carry on that activity.”

On the face of it that overrules the whole of 4(1) and if the unauthorized person had not had any restrictions imposed upon them by the Regulator. 

That cannot be what it means, but for the life of me, I do not understand what it does mean. 

Ben Williams KC has tweeted stating:

““I am a long way from getting to the bottom of this, but it seems odd that there is no reference to the apparent saving provision in paragraph 4(2) of Schedule 2’s definition of “the conduct of litigation””

Ben’s comment is interesting. I wonder if this provision (and 3(2) dealing with rights of audience) is an equivalent provision to what was found in CPR 39 PD 39A para.1.14:

“References to hearings being in public or private or in a judge’s room contained in the Civil Procedure Rules (including the Rules of the Supreme Court and the County Court Rules scheduled to Part 50) and the practice directions which supplement them do not restrict any existing rights of audience or confer any new rights of audience in respect of applications or proceedings which under the rules previously in force would have been heard in court or in chambers respectively.”

The purpose of this rule was to preserve the right of outdoor clerks, etc to attend hearings in chambers that were now to be treated as being in public. This was the same route that allowed costs draftsman to attend detailed assessments.

If that is correct, then 4(2) was designed to maintain the status quo. This is what the passage from Cordery referred to at paragraph 22 of the judgment seems to have in mind. You would then need to look at what was allowed before the LSA to determine what is still permitted. It may be that Mazur has been wrongly decided if it entirely overlooked this.

………………….

There are of course other views and I set out below an email to me from Richard Charles taking a different view and I am grateful to Richard for writing to me. 

In the introductory email you write, “There is clearly a very powerful argument that the Legal Services Act 2007 preserved the status quo as to who could conduct litigation with no intention to change the law. Any thoughts?”

My view is that the LSA did not preserve the status quo, that Mazur is correctly decided and that there was a clear intention to change the law.

Who can conduct litigation? 

As you point out, “Section 207 of the Legal Services Act 2007, a definition section states, “person includes a body of persons (corporate or unincorporate)”. This ignores, however, the first sentence  which states, “In this Act except where the context otherwise requires”.

This makes the application of the S207 definition flexible so that, if the context requires, the definition is ignored.   This is particularly significant as the definition does not describe a “person” as an individual when, within the key sections of the Act, this is the only way “a person” it can sensibly be construed.

S13 (2) A person is entitled to carry on an activity (“the relevant activity”) which is a reserved legal activity where; (a) The person is an authorised person in relation to the relevant activity.

If the context is ignored and the S207 definition is imported so that authorisation is provided only to a body of persons (corporate or incorporate), then everyone working in that organisation, whether as a paralegal, secretary, receptionist etc would be authorised to carry on reserved activities.

This, however, is an absurd proposition, considering the regulatory objectives set out at S1(1) which prioritises at (d) protecting and promoting the interests of consumers and at (h) promoting and maintaining adherence to the professional principles (set out at S1(3). The practicability is also absurd. Only persons that are individuals have the ability to conduct litigation. 

The notion the context requires individuals to be authorised under S13(2) is supported by the offences set out in S16, which makes clear, as Fancourt J noted in Khan at paragraph 32 (and relied upon in Mazur), that,

” there is a separate requirement for the employer body and the employee to be entitled to carry on the reserved legal activity”. 

The 2007Joint Committee (JC) report Vol 1, chaired by Lord Hunt, then the senior partner at Beechcroft Wansborough, commented at para 22, in relation to the offences set out in S11 and S12 that in a range of situations

“…. consumers may need protection, from the impostor on the high street to the risk that unauthorised persons may seek to become involved in the conduct of multi-million pound litigation in an ABS firm”.

The JC did not refer specifically to paralegals – simply to unauthorised persons which, is arguably much the same. The JC was making the point that it cannot be in consumers interest to have litigation, particularly high value litigation, conducted by an unauthorised person – clearly an individual.

JC comment at para 233 that it; 

“… is important from the outset that all legal professionals are included in the regulatory framework”.

In other words, not just a body of persons (corporate or incorporate) but all individuals performing regulated activity.

Was there an intention to change the law? 

The LSA was a long time in the making. It was preceded by a policy objective to liberalise the legal services market while strengthening consumer protection. 

There is virtually no discussion of the role of paralegals in any of the preliminary work contained in the 2001 OFT report “Competition in the Professions”, the 2004 Clementi Report or the subsequent 2005 White Paper “The Future of Legal Services: Putting Consumers First”.

It is reasonable to assume the absence of discussion of paralegals  was because those concerned  were under the impression paralegals did not provide advice on reserved matters. 

The White Paper, however, was clear that radical change was coming and why it was needed.  For example, at para 3.3 it was noted,

“ The problem is that at present there may be gaps where regulation is needed and so consumers are not protected. Under the current arrangements, an Act of Parliament is generally required to provide the protection that consumers need”.

There is little doubt the LSA intended to change the previous law regarding authorisation. Accordingly, it is asserted in;

S13(1) The question whether a person is entitled to carry on an activity which is a reserved legal activity is to be determined solely in accordance with this Act.

I take this to mean not by reference to previous practice. 

CILEX qualified individuals are provided for in the LSA. 

The legislation is very clear about the extent of the reserved legal activity they can perform once authorised. This was not an accident given the above.

The LSA was enacted at a time factory firms had become well developed. 

Many morphed into an ABS – often with an insurer. 

These businesses flourished because they employed armies of youthful paralegals who were unqualified, compliant and crucially with no knowledge of professional ethics. 

Performance was maintained by unqualified managers driving KPIs and capability reviews. Staff turnover was high.  Careful case analysis was replaced by relentless process driven CMSs. 

Such was the driven nature of these regimes that paralegals attracted the demeaning sobriquet “drones”.  

In this permissive new world, the old school solicitors, burdened and proud of their adherence to professional standards and ethics and jealously committed to protecting client’s interests, were mostly sidelined or dispatched. 

The interests of insurers and their panel firms became  closely aligned 

The drone methodology enabled those running such enterprises to argue “plausible deniability” if a regulator ever alleged that claims were being under settled. 

The SRA famously never investigated the outcome of cases. 

Money gushed out of this black hole with fortunes made from the shortchange. 

The SRA was delighted so many ABSs thrived and worked with machine like efficiency. Costs were down, complaints were down, solicitors had been poked in the eye and the desperately injured clients……  

It is extraordinary these business models have been allowed to flourish.  

It is clear offences have and are being committed. Unwinding the financial ramifications of what has been allowed to develop will be a massive task, cost billions and shake the SRA, insurance industry and legal profession to its core. 

Therefore, rather like the shenanigans at the Post Office, it will probably be buried so that the “status Quo” is restored. The wagons are being circled.

I now set out some thoughts from Simon Gibbs, who now does Defence and Claimant work, and whose excellent blog is here. 

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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In a previous article, I said that I would not routinely report cases involving so-called hallucinatory citations, as the problem was becoming very common, and the answer obvious.

There has now been a significant and disturbing development, reported in the mainstream national press, where an Employment Judge has used fabricated passages attributing them to judgments in which they did not appear.

In

Sandie Peggie -v- Fife Health Board 

the Employment Judge accepted that the passage was fabricated and issued a certificate for correction with the fabricated passage taken out.

However, the Daily Telegraph reports that a second quote, attributed to a Supreme Court Judgment, did not in fact appear in that Judgment.

Others have picked up further fabrication.

This is not simply a question of a judge getting the law wrong or interpreting existing case law in a way with which others disagree, but rather writing what is for all intents and purposes a fictitious Judgment in itself.

There has been no official explanation and the Scottish Judicial office refuses to answer questions over the fabricated quotes in this Judgment, and so, it cannot be finally confirmed that this was due to the Judge using Artificial Intelligence, but that is the overwhelming assumption.

This of course puts the judicial office in a very difficult position as in England and Wales, an entirely separate jurisdiction, it has been made clear that lawyers who use Artificial Intelligence and who fail to check whether the cases referred to are genuine, face contempt of court proceedings and being reported to their regulatory body.

If it be the case that the judge used Artificial Intelligence and had not checked that the cases were genuine, then it is hard to see how that Judge can remain in place.

This was a high-profile case and attracted journalistic interest, as well as general legal interest, which led to journalists checking the quotes.

This raises the question of whether in less interesting cases, erroneous Judgments have been given on the basis of fictitious cases relied upon by the Judge and where no one has picked this up, and of course, in the Tribunal system, parties are often self-represented.

The answer is simple, that is for the judiciary only to be allowed to use specific named websites such as Bailli, the UK Archives, the UK Government website etc.

Meanwhile, the Court of Appeals in the State of Oregon has stated that the words hallucinations and hallucinatory etc. should not be used to describe fictitious citations and Judgments as that diminishes the gravity of the harm being done by those using Artificial Intelligence incorrectly.

The court said that these are fake cases, pure and simple.

It also pointed out that Artificial Intelligence programs are deliberately designed to keep the customer satisfied and thus are programmed to produce fake authorities to assist the client.

“generative artificial intelligence is not perceiving non-existent law as the result of a disorder. Rather, it is generating non-existent law in accordance with its design. And that non-existent law, time and again over the past few years, is being submitted to the courts.”

“Although artificial intelligence programs may seem to offer a shortcut for a busy attorney in an individual case, at present, they may create a long cut to justice. Every single time a lawyer relies on false authority, the court will need to take the time to address the situation to, at a minimum, ensure that the public retains confidence that the courts are not relying on fabricated law.”

The Court of Appeals in Oregon specifically stated that it did not intend to preclude Counsel from using services such as West Law and Lexus to conduct legal research or from using spelling and grammar check functions.

Here is an extract from the case, itself taken from Gordon Exall’s excellent Civil Litigation Brief subscription blog.

In

Dempsey v Milton Keynes University NHS Trust, County Court at Liverpool, 14th November 2025

the court was hearing an appeal in relation to medical agency fees, specifically the degree of information to be supplied so as to distinguish between the actual cost of the medical report and the medical agency fees.

This was a clinical negligence claim which was settled pre-issue but costs were not agreed and the following were claimed as disbursements:

• Item 26: Fee for Breach of Duty Report of Mr Jackson                 £5,984.00

• Item 27: Fee for Condition and Prognosis Report of Mr Jackson   £3,225.00

• Item 28 Fee for Psychiatrist Report of Dr Gibbons                        £2,608.89

• Item 29: Fee for Colorectal Report of Mr Jones                           £4,506.67

Vouchers from Speed Medical Limited were served with the Bill of Costs in support of these items but these were not fee notes of the medical experts but requests for payment by Speed Medical Limited for the cost of obtaining the reports.

Points of Dispute were filed and the defendant paying party stated:

“The Claimant has failed to serve copy fee notes of any expert in respect of fees claimed in this bill. The Defendant accepts that the Claimant has served copy fee notes of agencies but does not accept they are the copy fee notes of an expert and do not comply with PD 5.2(c) to CPR 47.

In the circumstances, the Defendant and the court are not in a position to assess the fees properly or at all.”

The claimant refused to provide a monetary breakdown but provided the following information:

“However, by way of full and frank disclosure, Speed Medical have confirmed that their invoice is broken down as follows:

• Expert fee

• Fixed operational fee – cost of the case handler etc dealing with the file

• Referrer commission- this is a commission fee if the law firm insist they want a separate agreement whereby a commission fee on instruction is paid to a third-party marketing company usually (so the marketing agreement dictates what fee that is so varies with each firm/referrer)

• Finance fee – 6.5% pa for 3 years (we offer the 3 years deferred terms)

• Waive – the write off percentage a law firm requests so with each instruction they accumulate a fund in which they can utilise to partially reduce or fully write off any Speed medical invoice.

Speed profit costs – Expert fee under £1000 = 20% or £225 (whichever is the higher amount). Expert fee £1001+ = 20% capped at £600.”

The matter proceeded to a provisional assessment and the paying defendant requested an Oral Review of the four medical report fees and served  Part 18 questions.

The claimant receiving party did then provide some information claiming that it was an itemised breakdown of the work down and the footnote to the breakdown stated:

“The above is a summary of the work undertaken in this matter based on the attached detailed listing. The time cost of work undertaken has been calculated using the pay band D, national grade 1 £141.60 (inclusive of VAT) hour, to illustrate the charges that would have been incurred if undertaken utilising the method of recovery or buy it had been undertaken by the instructing solicitors (sic). The actual fees charged based upon our standard fee basis model.”

At the Oral Review hearing the Judge accepted that the breakdown showed that the time elements were reasonable and proportionate and allowed the disbursements with some modest reduction.

The defendant appealed on the basis that:

1. Where a claimant has obtained a medical report through a medical agency, the claimant must separately identify the sum claimed in respect of the expert’s fees and medical agency’s fees. They are distinct items and can only be assessed as such.

2. The claimant must comply with the requirement in PD47 paragraph 5.2(c) and provide a copy of the fee note(s) of the expert(s) for the expert’s fees to be properly evidenced.

3. Where the court is prevented from making a proper assessment of the components of the ‘composite fee’, the only just and proportionate approach is to disallow the recovery of the item.

The court considered the case law.

32. The principle was confirmed, albeit in a first instance County Court decision, in Stringer v Copley [2002] Lexis Citation 68, before HHJ Cook (the original editor of the authoritative textbook, Cook on Costs). There could be no objection in the use of such an agency provided that it could be demonstrated that their charges did not exceed the reasonable and proportionate cost of the work if it had been done by a solicitor. Where the invoice, or fee note from the medical agency showed the consultant’s fees and the agency’s own charges separately, the costs judge could assess them both. Where a composite fee had been charged without differentiation there was insufficient particularisation.

33. Subsequently Practice Direction 47, paragraph 5.2, which it would appear was not in force at the time of Judge Cook’s decision (or at least was not referred to in a previous incarnation) provides: 5.2 On commencing detailed assessment proceedings, the receiving party must serve on the paying party and all the other relevant persons the following documents — (a) a notice of commencement ….. (b) a copy ……….of the bill of costs; (c) copies of the fee notes of counsel and of any expert in respect of fees claimed in the bill……. (d) written evidence as to any other disbursement which is claimed and which exceeds £500;”

34. This provision was the focus of the court’s attention In Northampton General Hospital NHS Trust v Hoskin, another County Court case involving an appeal from a costs judge heard before HHJ Bird in Manchester (22 May 2023). The learned judge in that case held that the paying party was entitled to see the two fee notes in respect of two medical reports which were being claimed for. These reports had been obtained by a medical agency who provided an invoice without a specific breakdown. HHJ Bird came to the conclusion that without a fee note the paying party could not make a rational evidence-based decision on the fees claimed, and that the terms of Practice Direction 47 paragraph 5.2(c) were mandatory. The claims were therefore to be assessed at nil in default of compliance with HHJ Bird’s order to provide a breakdown and copies of the experts’ fee notes. Specific reliance is placed upon Hoskin by the Defendant in the present case (see below).

35. The matter of compliance was dealt with most recently before Senior Costs Judge Rowley (with reference made to Hoskin) in JXX v Archibald [2025] EWHC 69 (SCCO) who considered that an authoritative appellate decision would be desirable on the issue. Whilst he did not make any ruling in relation to the mandatory nature of the practice direction, he concluded that where information was requested by the paying party as to the breakdown, the receiving party effectively had two choices. This was either to have the composite invoices assessed by reference to the agency work and the expert cost separately by providing such information, or on a hypothetical basis if the information was withheld, whereby the expert fee would be assessed as if there had been no agency involvement.

Judgment

The court observed at the outset that it was unhelpful of the claimant to make no direct reference to the involvement of an agency when identifying the items.

The court found that:

• The claimant’s reply to the objections and the subsequent approach was opaque.
• The replies and the breakdown provided a confusing picture to the court and created a real risk that in making an assessment, the court could be including three elements that were irrecoverable as costs inter partes.

• The assessment of the agency fee was frustrated by the opacity of material provided to the court.

There was no adequate breakdown of the recoverable components of the profit costs of the medical agency. In these circumstances, it is appropriate to assess the agency element at £NIL.

The effect of the Judgment is:

1. Full particularisation of what is being claimed must be provided and evidenced.

Absent this, referral fees, funding costs, and a hidden ‘slush fund’ (as DJ Baldwin called the ‘waive’) will continue to be systematically hidden and claimed as fees of a medical report obtained through an agency.

2. The amount for the expert fee must be separately evidenced from the agency fee.

3. Where the amount claimed includes irrecoverable elements, the amount for those elements must be identified and removed before assessment of the recoverable elements.

4. Where there is any risk of including an irrecoverable element in any amount allowed upon assessment, the court should disallow the fees.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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In

Thomas v Secretary of State for the Home Department [2025] EWHC 3274 (KB)

the King’s Bench Division of the High Court considered the situation where a claimant had made a Part 36 offer of £15,000 and following a liability trial, which the claimant won, the parties agreed quantum at £16,000.

Clearly, that agreement provided for payment of a sum higher than the claimant’s Part 36 offer and the key issue was whether there must be a Judgment before CPR 36.17 comes into play.

The paying party, that is the defendant, referred to the heading of CPR 36.17 which expressly states

“Costs consequences following judgment“ (my bold)

The body of the rule itself provides for costs consequences which apply

 “upon Judgment being entered” and

 “when a claimant fails to obtain a Judgment more advantageous than a defendant’s Part 36 offer.”

The defendant argued that the word Judgment must involve an independent decision by a Judge following a contested hearing and is not intended to refer to a settlement, even where that settlement has been approved by a Judge.

In short, the Judgment must be entered by the court on the damages due to a claimant before CPR 36.17 is of any application.

The receiving party argued that the compromise of a claim contained in the Sealed Court Order equates to Judgment being entered.

In

Vanden Recycling Ltd v Kras Recycling BV [2017] EWCA Civ 354

the Court of Appeal held that the effect of a consent order made between the claimant and the second defendant was to give Judgment in respect of the damages claim with the result that the claimant no longer had any claim against the third defendant, being another tortfeasor liable for the same damage.

Paragraph 12 of the Judgment here, the court quoted from Paragraphs 49 and 50 of the Court of Appeal Judgment in Vanden –

            “49.      If one has regard to what the Consent Order does rather than what it says, it requires                  Bolton …D2) to pay a specified sum in respect of Vanden’s claims. As far as those                     claims are concerned it is a final order. If there was judgment for Vanden on its                            damages claims following a trial a court order for payment in similar terms would be                     likely to be made. Although the Consent Order does not use the wording of                                 adjudication or judgment, the order it makes is to the same effect as one which                           would be made following a judgment.

            50.       Since in substance and in effect the order for payment made by the Consent Order is                    the same as would be made following a judgment I consider that the Judge was                          correct to conclude that it is to be treated as a judgment for the purpose of the rule                     that satisfaction of a judgment bars claims against tortfeasors liable for the same                   damage.”

13. In my judgment, similar reasoning applies in the instant case. The mere fact that the word judgment does not appear in the Consent Order is of no consequence, when considering the effect of the Consent Order. Indeed, an order made by the Court following a Trial could have been drafted in precisely the same terms as the Consent Order.

14. I am fortified in reaching this conclusion by what is said in the White Book commentary to CPR 40: it is pointed out that although the CPR refers to the two terms (‘judgment’ and ‘order’), sometimes in conjunction and sometimes not, “no basis for distinguishing between them can be derived from the rules themselves”.

15. Whatever the Defendant may have intended, the true effect of this Consent Order is to enter judgment in favour of the claimant in the sum of £16,000. It is enforceable in precisely the same way as if the Court had awarded damages to the Claimant at the end of the trial.

COMMENT

Consent Orders are often drafted in haste and somewhat carelessly, dealing with the substantive action but not giving enough thought to the costs implications, and often those drafting and agreeing the consent order are not particularly well-versed in the finer points of costs.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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Both the Solicitors Regulation Authority and the Legal Ombudsman are seeking substantial extra funds to deal with the apparent rise in complaints against solicitors.

In October 2025, the Solicitors Regulation Authority said it would be unable in the current budget to deal with a change whereby all firms of solicitors would have to submit accounts to the SRA, rather than just those where the reports qualified.

It said it was dealing with a substantial increase in complaints, up from 12,000 a year a decade ago, to more than 15,000 in 2025.

Is it in fact true that complaints against solicitors have risen sharply?

An article in The Times of Tuesday, 18 July 2000, by the highly respected legal journalist, Frances Gibb, reported that complaints then were running at 17,000 a year, and the article contains detailed statistics and support for that figure.

That is of course above the apparent current figure of 15,000 complaints a year.

However, as of November 2025, there were 213,197 solicitors on the Roll in England and Wales compared with 80,000 in 2000.

Thus, the number of solicitors now, as compared with the year 2000, is 2.66 times as many, that is an increase of 266%, but complaints have dropped.

I appreciate that in terms of the resources need by anybody handling complaints, it is the raw number of complaints that is relevant, but this is presented as being a reflection of greater dissatisfaction with solicitors, whereas the truth is exactly the opposite.

To put it another way, in the year 2000, there was one complaint for every 4.7 solicitors on the Roll.

In 2025, there was one complaint for every 14.2 solicitors on the Roll.

In other words, in 2000, in real terms, there were three times as many complaints against solicitors as there are now.

It would be helpful if the Solicitors Regulation Authority and the Legal Ombudsman made these points, that is that the true number of complaints against solicitors has slumped and that the increase in work is due to the massive increase in the number of solicitors on the Roll.

The slump in complaints is all the more remarkable given the fact that both the Legal Ombudsman and the Solicitors Regulation Authority do their best to stir up complaints against solicitors.

The Master of the Rolls has announced an update to guideline hourly rates for solicitors, with effect from Thursday 1 January 2026.

Sir Geoffrey Vos, who is also the Head of Civil Justice, said: “In 2022, I requested that the Civil Justice Council take a strategic look at costs.

“I have now implemented the Council’s recommendation to update guideline hourly rates for inflation.

“In January 2024, figures were uplifted using the service producer price inflation (SPPI) figures from Q1 2022 – Q1 2023 inclusive. This amounted to a 6.66% increase.

“These figures are now to be updated using more recent SPPI values, to cover up to Q1 2025.

“The uplift from the 2025 rates to the new 2026 rates amounts to an increase of 2.28%.

 “I would also like to mention that the Civil Justice Council has established a working group to examine whether guideline hourly rates can be produced for either or both of counsels’ fees and a new top rate for complex commercial work. I look forward to receiving the Civil Justice Council’s interim report on these issues later this year.”

Guideline hourly rates 2026 (with previous year’s rates in brackets)

Grade	Fee Earner	London 1	London 2	London 3	National 1	National 2
A	Solicitors and legal executives with over 8 years’ experience	£579 (£566)	£422 (£413)	£319 (£312)	£295 (£288)	£288 (£282)
B	Solicitors and legal executives with over 4 years’ experience	£393 (£385)	£327 (£319)	£262 (£256)	£247 (£242)	£247 (£242)
C	Other solicitors or legal executives and fee earners of equivalent experience	£305 (£299)	£276 (£269)	£209 (£204)	£201 (£197)	£200 (£196)
D	Trainee solicitors, paralegals and other fee earners	£210 (£205)	£157 (£153)	£146 (£143)	£142 (£139)	£142 (£139)

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more. Subscriptions are £250 + VAT for 2026, which is over 100 issues.  Buy here.

The abysmal performance of the Legal Ombudsman is nothing new.

Here is a piece by me seven years ago. It should be put out of its misery- the Ombudsman that is, not my piece.

In December 2018 the Legal Ombudsman admitted that complaints about lawyers were taking six months even to be looked at.

In the previous year it missed its time targets every single month.

In its 2017 /2018 Annual Report the Legal Ombudsman reported that it resolved just 9% of cases within 90 days, against its own – hardly demanding – target of 60%.

63% of cases were resolved within six months, against the target of 90%.

7% of cases were not resolved within a year.

The irony of a body that fines solicitors for performing vastly better than it does itself is beyond parody.

I have always strongly opposed the concept of Ombudsmen as they undermine the rule of law as people think it is part of the judicial system.

The Legal Ombudsman should be scrapped forthwith and £12.3 million that it costs each year should be spent on patching up the courts, which are literally falling apart – I mean the buildings and not the system – although that is as well.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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The Legal Services Consumer Panel, another disastrous offspring of the disastrous Legal Services Act 2007 has always been a bit odd, to put it mildly, but now appears to have lost touch with reality.

It commissioned a study and concluded that clients – legal services consumers in their Orwellian jargon -want the same user-friendly services from their lawyers as they find in retail or banking, yes, banking!

The study followed in-depth interviews with 15, yes, a whole 15 people.

It found that clients of law firms were accustomed elsewhere to real time updates, named points of contact, and accessible help channels.

Unfortunately, they did not say which particular bank you can get all of those things from and if any of you readers are with a bank where you still have a personal bank manager that you can speak to in the branch, assuming any banks are still open, then please let me know so that I can join that bank and share that with our readers.

One of the problems is that sometimes clients had to repeat their circumstances to different staff members because some had left.

The report appears not to have considered the fact that matters such as Probate and Conveyancing, which they specifically dealt with, can now take several years due to the delays by public bodies, completely outside the control of solicitors.

It goes on and on in similar vein.

What it pointedly does not say, and none of their reports ever do, is that all surveys by all clients of different organizations, including independent opinion poll researchers, show satisfaction with solicitors to be between around 85% and 98%, depending upon the type of work.

Given that the work we do is often, by its very nature, stressful to clients, for example family, Probate, Employment and litigation, all independent observers accept that these are amazingly good figures.

Of course, these public bodies at public expense which feed off each other would be, and should be, out of business, as there is not the slightest need for the Legal Services Consumer Panel.

I trust that this useless and harmful body will be scrapped on the Friday morning after the next General Election.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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Cash Accounts stem from the Solicitors Act 1974 and in

Turner v Coupland Cavendish Ltd [2025] EWHC 1605 (KB)

the King’s Bench Division of the High Court gave a helpful explanation of what the Cash Account is.

This case is now being appealed and will be heard by the Court of Appeal in due course.

The Cash Account

8. The cash account constitutes a comprehensive record of all monetary transactions conducted by a solicitor on behalf of a client during the course of a retainer. Its fundamental purpose is to provide the client with a transparent overview of how their funds have been managed and to ascertain any outstanding balance upon the termination of the professional relationship.

9. The obligation for solicitors to maintain such an account derives from statute. Section 32(1)(b) of the Solicitors Act 1974 (“the 1974 Act”) mandates the Council of the Law Society (now the Solicitors Regulation Authority or SRA) to establish rules governing the keeping of accounts that detail money received, held, or paid by legal professionals for their clients. These rules are further elaborated on in the SRA Accounts Rules and the SRA Financial Services (Conduct of Business) Rules.

10. Typically, a cash account will present a summary of funds received by the solicitor for the client’s benefit and payments made out of those funds on the client’s behalf. It does not include payments made in satisfaction of the solicitor’s own bill for fees and disbursements. In essence, it aims to be a complete financial history of the solicitor’s handling of client money throughout the duration of their instruction.

11. It is important to distinguish between a cash account and a solicitor’s bill of costs. The latter details the solicitor’s professional charges and disbursements, whereas the former records the broader financial transactions involving the client’s money. Notwithstanding this distinction, the cash account has to be considered when the Court comes to certify the final balance between the solicitor and the client.

12. A client has the right to dispute the accuracy of a cash account. The Court must certify the account. It is for the solicitor to satisfy the Court of the accuracy of the cash account. There is no burden of proof, as such, on the client. Disputes can arise from concerns about the omission of receipts, discrepancies in recorded payments, or, as in the present matter, allegations of undisclosed commissions or other financial benefits that ought, arguably, to have been shown in the cash account and credited to the client.

13. In proceedings under section 70 of the 1974 Act and CPR 67 for the assessment of a solicitor’s bill, the determination of the “result” of the cash account is a mandatory step before the assessment can be finalised and a conclusive order made as to the sums due between the parties.

In a detailed assessment under the Solicitors Act 1974, it is the final stage of the exercise prior to the award of costs for the detailed assessment itself.

As the High Court said in Turner, the determination of the result of the Cash Account is a mandatory step before the assessment can be finalized and a conclusive order made as to the sums due between the parties.

This requirement is said to stem Section 70(7) of the Solicitors Act 1974, which I set out immediately below, but I am far from convinced that it does in fact require a Cash Account as it specifically confines itself as to what is due to or by the solicitor in respect of the bill and in respect of the costs of the assessment, and nothing else.

However, the courts have interpreted that as requiring a Cash Account, and here is Section 70(7):

(7) Every order for the assessment of a bill shall require the costs officer to assessnot only the bill but also the costs of the assessment and to certify what is due to or by the solicitor in respect of the bill and in respect of the costs of the taxation.

The Civil Procedure Rules gives some more information as to how that exercise should be carried out and the Practice Direction to CPR 46 states:

6.19        After the detailed assessment hearing is concluded the court will –

                  (a)            complete the court copy of the bill so as to show the amount allowed;

                  (b)            determine the result of the cash account;

                  (c)            award the costs of the detailed assessment hearing in accordance with                                                 Section 70(8) of the Solicitors Act 1974; and

                  (d)            issue a final costs certificate.

There is also an official Precedent P which I set out at the end of this piece, but that is not an entirely satisfactory document and arguably does not comply with the requirements.

There is a particularly helpful piece on the CheckMyLegalFees website, and I am grateful to CheckMyLegalFees for some of the information that follows:

The result of the Cash Account, as referred to in Paragraph 13 of Turner is the difference between the credit and debit sides of the Cash Account, that is what has been received from or on behalf of the client, less what has been paid out, or should have been paid out, on the client’s behalf.

The court then deducts from that sum the amount of the bill as assessed and then makes an order for costs depending upon the outcome of the assessment.

In simple terms, if the client achieves a reduction of 20% or more from the bill, then the client is deemed to have won and is awarded costs, but if the client fails to achieve a reduction of at least 20%, then the solicitor wins and is awarded costs.

It is not always clear which items are debits, and which are credits, and which should not be in the Cash Account at all.

I now set out the very helpful Table from CheckMyLegalFees, and I am grateful to them.

What Should Appear in the Cash Account, and Where Should it Go?
 

Debit Column	Credit Column	Exclude Altogether
Damages paid out to the client	Damages received from a third party	General disbursements (these should be in the statute bill, so including them as a debit results in the client paying them twice)
Payments made on the client’s behalf to a medical treatment provider	Costs received from a third party	Receipt from the client of any “client deduction” (part of the statute bill)
Any adverse costs paid out on behalf of the client	Any payment on account of costs or disbursements received from the client or a funder	Payment of Counsel’s fees from funds provided by the client (see disbursements)
Any other payments made as agent for the client, other than in respect of disbursements (which will be included in the statute bill)	Any other money received from the client, a funder, or a third party, (with a suitable description)	Payment of Counsel’s fees from office account (see disbursements)
The bill (subject to any adjustment on assessment)		Payment of Expert’s fees (see disbursements)
The ATE premium (unless it can properly be categorised as a disbursement)		Payment of Court fees (see disbursements)
		Any transfer from the solicitor’s client account to office account

Mark Carlisle of CMLF makes the point that the Solicitors Act and CPR 46 are not the exclusive domains of the Solicitors Act. He says –

“Despite Mr.Justice Sweeting’s reference to it in Turner many lawyers and indeed Costs Judges are unfamiliar with “CPR 67 – Proceedings Relating to Solicitors”. CPR 67.2.1(a) provides a procedural route, entirely separate from Part III Solicitors Act, for a client to obtain a Cash Account; CPR 67.2(b) can then be engaged where the delivered Cash Account shows, or ought to show,  a balance payable to the client.”

Here is a link to a sample Cash Account prepared by CheckMyLegalFees in the context of a Personal Injury case.

It is brief, and I set it out:

Court	IN THE HIGH COURT OF JUSTICE
Claim Number	AB123456
Matter	A -v- B (A Firm)

Cash Account on Application for Assessment under the Solicitors Act 1974  

This is a DRAFT prepared by Checkmylegalfees.com on behalf of the Claimant based on such information as is available to him or her and is subject to (i) verification / approval by the Court and / or (ii) any submissions on behalf of the Claimant that any items contained within the draft Cash Account should be adjusted or struck out 

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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On 21 October 2025 a new Edition of the Senior Court Costs Office Guide was published and it runs to 154 pages.

Here is the link.

Given the storm over Mazur & Anor v Charles Russell Speechlys LLP [2025] EWHC 2341 (KB)

and particularly the issue of the rights, or otherwise, of Chartered Legal Executives, to conduct litigation, the following statement taken from the “Representation” section is interesting:

“Chartered Legal Executives

Under the Legal Services Act 2007 Chartered Legal Executive lawyers are ‘authorised
persons’ undertaking ‘reserved legal activities’, alongside solicitors and barristers. A
Chartered Legal Executive lawyer specialises in a particular area of law and will have been
trained to the same standard as a solicitor in that area.”

The Guide is published by the Judiciary of England and Wales.

The Senior Court Costs Office is part of the High Court.

The foreword to the Guide is written by Lord Justice Colin Birss, Deputy Head of Civil Justice and a Court of Appeal Judge who states that:

This 2025 version brings the Guide right up to date … It is written by the experts themselves.

True that that is dated 18 August 2025, that is before the decision in Mazur, but this Guide, without foreword at the very beginning, was published on 21 October 2025, well after the Mazur Judgment.

It is hard to believe that the Judiciary did not consider making any post-Mazur amendments if it felt them to be necessary.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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In

McNamee v LB Brent [2025] EWHC 2612 (SCCO)

the Senior Court Costs Office assessed costs and then reduced them by 50% to reflect misconduct by the receiving solicitors, that misconduct being a gross exaggeration of the costs claimed in negotiations before a formal bill was submitted for detailed assessment.

In negotiations, the claimant’s solicitors put forward a bill of £280,583 but when those negotiations came to nothing, the formal bill of costs for detailed assessment totalled £140,430.

The court allowed the Without Prejudice rule to be waived so that the correspondence concerning the negotiations was before the court.

The court accepted that there was an element of a broad brush approach during negotiations but said that they had to be “some recognisable limits” to this.

Unjustifiable exaggeration discredits the process as a whole and toleration of this will discourage the early settlement of inter-partes [between the parties] costs, to the mutual disadvantage of the parties and the court system generally.

The misrepresentation here represented a gross exaggeration of the Claimant’s actual costs, an inflation that turned on numerous fundamental errors of calculation, proffered in a manner that was intended to induce the Defendant to enter into a costs settlement that might well have exaggerated greatly their true liability.

Misconduct in relation to the assessment of costs is dealt with in CPR 44.11:

Misconduct, CPR 44.11

The Law

            CPR 44.11 provides (relevantly) as follows:

            (1)        The court may make an order under this rule where –

                        (a)        a party or that party’s legal representative, in connection with a summary or                               detailed assessment, fails to comply with a rule, practice direction or court                            order; or

                        (b)        it appears to the court that the conduct of a party or that party’s legal                                        representative, before or during the proceedings or in the assessment                                               proceedings, was unreasonable or improper.

            (2)        Where paragraph 1(1) applies, the court may –

                        (a)        disallow all or part of the costs which are being assessed; or

                        (b)        order the party at fault or that party’s legal representative to pay costs                                       which that party or legal representative has caused any other party to incur.

COMMENT

There is no new law here, but the Judgment contains a detailed analysis of the case law relating to misconduct in assessment proceedings and refers to no fewer than 12 cases.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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In this piece, I am not primarily talking about the time limits within the Solicitors Act 1974 itself in relation to applying for detailed assessment etc., but rather what time limits, if any, apply where a solicitor has not delivered a Solicitors Act 1974 compliant final statutory bill.

The issue has been thrown into sharper focus by talk of certain solicitors stirring up clients to challenge bills years after the case is concluded on the basis that, following the decision in

Mazur & Anor v Charles Russell Speechlys LLP [2025] EWHC 2341 (KB)

their own solicitors conducted the matter unlawfully by not having an authorized or exempt person conducting the litigation.

There is a statutory requirement to deliver a final statutory bill to every client in every case without exception, and the time limit for the client to make an application for detailed assessment starts running only once that final statutory bill has been delivered.

There is authority from decisions of the Legal Ombudsman that once another firm of solicitors has been instructed, then you should not correspond with your former client, even to deliver a final statutory bill or to deal with a complaint.

The starting point is that even if a client has corresponded throughout by email the bill must be served by post or by delivery to the client personally, and if the new solicitors have consented to service by email, then that is fine and the bill can be served electronically upon those solicitors.

A bill must be delivered for all costs, even if not paid by the client.

This applies even if the client is paying no costs at all, for example, in a Settlement Agreement for an employment dispute it is common for the employer to pay all the costs of that Settlement Agreement.

Nevertheless, a bill must be delivered to the client and marked   (payable by X employer).

The client has an unqualified right to apply for detailed assessment, and by unqualified, I mean that the court has no discretion and cannot make such an application conditional upon anything, provided that such application is made within one month of the final statutory bill being delivered.

This sometimes crops up where the client has not paid the bill. Quite simply they do not have to pay it at that stage, and the court cannot impose a condition that say 50% of the bill is paid, if the application is made within one month.

After that the court can.

Although the client has an absolute right to apply for detailed assessment of the bill, the client needs to achieve a 20% reduction in the costs to count as a win, and, as in any other litigation, costs follow the event.

Thus, if, for example, the client achieved an 18% reduction in costs, although that is a significant sum, the solicitor would be classed as being successful in the litigation and therefore the client would have to pay the solicitor the costs of the Solicitors Act assessment.

As time runs from the delivery of a final statutory bill, my view is that no issue of limitation arises even if the matter was concluded over six years ago.

The common law doctrine of laches that is that the client has delayed too long before claiming their rights is still available.

The potential problem is that a solicitor would then be the beneficiary of its own failure to comply with the Solicitors Act 1974.

Having said that, there must come a time when the court would invoke the laches defence, which is an equitable defence.

The Solicitors Act 1974 essentially replicates previous Acts of Parliament, going back to 1729 and the Solicitors and Attorneys Act.

This would mean that, in theory, the descendants of personal representatives could now challenge a bill from, say, the 1850s or 1950s, or whatever.

Inflation means that that would virtually never be worth doing as the original bill would be virtually worthless in today’s terms.

As far as I am aware there is no authority on this point, but my instinct is that if someone now challenged a charge from say 1985, which in financial terms, may still be worth doing, the court would not entertain it.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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In

Hakmi v East & North Hertfordshire NHS Trust & Anor [2025] EWHC 2597 (KB)

the King’s Bench Division of the High Court made a costs order against the successful defendant and in favour of the unsuccessful claimant in circumstances where the defendant hospital trust had wrongly alleged fundamental dishonesty.

The Judgment is lengthy and deals with the substantive claim and that section dealing with fundamental dishonesty is at Paragraphs 98 to 136.

The claim was a clinical negligence one protected by Qualified One-Way Costs Shifting and as is common in such cases, the defendant alleged fundamental dishonesty.

Such an argument is often run without any merit with the defendant’s logic being that it puts severe pressure on the claimant, as here, as if successful, it leads to an otherwise successful claimant’s case being thrown out under the provisions of Section 57 of the Criminal Justice and Courts Act 2015, and if unsuccessful, the claimant losing QOCS-protection.

Thus, insurers and the National Health Service have seen it as a “heads we win and tails we don’t lose” option.

Indeed, the High Court here referred to it as a “free tilt”.

Many commentators, including me, have suggested that there should be a penalty on a defendant who wrongly alleges fundamental dishonesty, for example a 50% uplift in damages for a successful claimant and a costs order in favour of an unsuccessful claimant.

The court adopted the option here in relation to an unsuccessful claimant by making a costs order in favour of the unsuccessful claimant.

It ordered the successful hospital trust to 15% of the losing claimant’s costs from the time that it raised the issue of fundamental dishonesty.

This involves an actual payment by the winning defendant to the losing claimant as the costs order which the defendant obtained on winning the case is unenforceable due to QOCS.

To allow the defendant to set off real costs against notional costs would mean no penalty on the guilty defendant.

1. The conclusion that I have reached is that, notwithstanding that the defendants will not be able to enforce an order for costs on the claim, I should make an order that reflects that the defendants failed to establish fundamental dishonesty on the part of Mr Hakmi. I do not accept that to make such an order, where a claimant fails, undermines the costs regime. If anything it is the converse, not to make such an order would give a defendant a free tilt at raising the issue of fundamental dishonesty. The evidence in this case was properly explored at the trial and found increasingly wanting. It would have been open to Mr de Bono to have abandoned the issue after the close of evidence, or indeed earlier, but he did not do so.

1. It seems to me that I should make an order for costs that reflects that the defendants failed to establish fundamental dishonesty. As Mr Kellar has pointed out there was unfavourable national press coverage on the first day of trial and the consequences for Mr Hakmi, as I have said above, if the allegation had been found proved, would have been disastrous for his reputation and career. In my view, the order I make should reflect a percentage of the costs from the time that the issue was raised in the defendants’ counter-schedule, which is dated 18 March 2025. I consider that Mr Kellar’s submission that it should be 25% is too high, and accept in part Mr de Bono’s submission that some of the costs would have been incurred in any event.

1. I order that the defendants pay 15% of Mr Hakmi’s costs from 18 March 2025, subject to a detailed assessment on the standard basis in default of agreement. Otherwise I order that Mr Hakmi pay the defendants’ costs of the action not to be enforced without the leave of the court.

In one of my other lives, I am the longstanding Vice Chair of Hemel Hempstead Town Football Club of National League South, and we are in the First Round Prop for only the third time in our long history.

This Saturday, 1 November 2025 we are away at former FA Cup winners Wigan Athletic.

Unless you support Wigan, please wish us luck 😊

Here is a podcast of a 22 minute interview of me by Dr Siamak Goudarzi of Nexter Law

My second Zoominar on Mazur is at 4.00pm today Thursday, 16 October 2025 lasting 1.5 hours; a recording and notes will be sent whether or not you attend live and as many of your colleagues as you want can attend the Zoominar and receive the recording and notes.

The cost is £100 plus VAT, and you can book here.

I am very grateful to Simon Gibbs, of Gibbs Wyatt Stone ([email protected]), a Costs Specialist, traditionally in Defence work, but now carrying out Claimant work as well for much of the information and links in this piece, but I take full responsibility for it!

Chartered Legal Executives have been the group hardest hit and most unfairly treated by the judgment

in

Mazur & Anor v Charles Russell Speechlys LLP [2025] EWHC 2341 (KB)

which I wrote up under the title

EARTHQUAKE HIGH COURT DECISION: ONLY SOLICITORS CAN CONDUCT LITIGATION, PROBATE AND CONVEYANCING, NOT PARALEGALS

I have always been an admirer of those who have qualified as Legal Executives and they often have more experience and common sense than solicitors, and I have a personal interest.

My long-time secretary and then Personal Assistant Clare Ranger qualified as a Legal Executive whilst working with me. Her daughter Phoebe is my Goddaughter and an Alternative Business Structure Director of Law Abroad Limited.

To place Chartered Legal Executives in the same category as entirely unqualified school-leaving paralegals is a disgrace; the court here did not even ask CILEx to intervene even though the potential decision, which the court was considering making, would affect this group more than any other.

The Law Society and the Solicitors Regulation Authority were asked by the court to intervene.

Those who now qualify via the CILEX Professional Qualification acquire the right to conduct litigation as part of the qualification process.

Those who became Charted Legal Executives through earlier qualification processes need to obtain a specific right to conduct litigation separately from their basic qualification.

There are three routes available:

   – assessment.

  –  portfolio; or

    – training and assessment

Many Charted Legal Executives do not have the necessary authorisation to conduct litigation.

It means that, in the same way as for completely unqualified paralegals, these Chartered Legal Executives cannot have their own caseloads (even though previously some not only had their own caseloads but headed up whole litigation departments).

You can check via the CILEX Authorised Practitioners Directory whether an individual has the relevant authority, although it is not entirely intuitive has to how it works.

A search by name will produce details that include their “Practising Rights”. For most this just says: “Chartered Legal Executive”, thus:

Practising Rights	Authorisation Date
Chartered Legal Executive	16/05/2024

The first sentence of the Directory states:

“The directory contains details of practising Chartered Legal Executives (Fellows) and CILEX Practitioners authorised by us to carry out legal work in England and Wales”.

However, there is no requirement for anyone to be authorised to carry out legal work. The restrictions imposed by the Legal Services Act 2007 are in relation to “reserved legal activities”.

One has to look elsewhere on the CILEX website to discover that Chartered Legal Executive status alone only authorises them to carry out the reserved legal activity of administering oaths.

Simon Gibbs says:

The Directory simply stating that an individual’s Practising Rights are “Chartered Legal Executive” is liable to mislead. If it means no more than being able to administer oaths, this is what it should state.

It is almost as though CILEX have been trying to disguise how limited the rights of most Chartered Legal Executives really are.

When you search for a name where there is a right to conduct litigation, you will see something like this:

Practising Rights	Authorisation Date
CILEX Litigator and Advocate (Civil)	16/05/2024
Chartered Legal Executive	18/07/2021

RIGHTS OF AUDIENCE

Rights of Audience are unaffected by the Mazur decision, and I have written this issue up at length in my piece

RIGHTS OF AUDIENCE AND MAZUR

CONTROL OF LITIGATION

This is obviously the key issue, and I will be writing a separate piece in relation to Exempt Persons and how to gain exemption, and this is likely to be of considerable significance for Legal Executives.

CILEX Statement: Litigation practice rights

24 September 2025

We know members have questions about the recent High Court ruling in Mazur v Charles Russell Speechlys, so we want to clarify what it means for you.

The Court ruled that anyone who is not authorised to conduct litigation cannot do so under supervision. You can support and assist an authorised colleague, but you can’t carry out litigation yourself unless you hold practice rights.

This ruling does not change the position for CILEX members working in litigation, it simply reinforces the existing guidance; a Chartered Legal Executive who does not hold separate litigation practice rights is not authorised to conduct litigation. While some reserved areas of practice (conveyancing and probate) allow more scope for supervised work, litigation is different and has stricter rules.

To gain the right to conduct litigation, there are three routes available – by assessment, by portfolio, or by training and assessment. You can find full details in the Practice Rights Hub in your myCILEX account.

We understand that the authorisation system can feel complicated at times, and we’ll keep working with the Regulators and other stakeholders to push for clearer and simpler guidance for the profession.

We will shortly be organising a member webinar focused on practice rights, but if you have any questions in the meantime, please reach out to the CILEX team.

FAQs

More detailed FAQs on practice rights and the application routes can be found in your myCILEX portal here.

I hold a practising certificate as a Chartered Legal Executive, how do I know if I have the right to conduct litigation?

As a Chartered Legal Executive with a practising certificate, you are authorised to carry out the reserved legal activity of administering oaths.

To be authorised for litigation, you must make an independent application to the regulator (CRL) using one of the application processes open to you. The regulator would then authorise you on successful completion of that application and issue your practising certificate in either civil, family, or criminal proceedings.

Does this ruling mean that CILEX Fellows/CILEX Chartered Legal Executives without practice rights can’t have files in their own names for litigation cases?

CILEX has sought guidance from CILEx Regulation (CRL) and will provide an update and any associated guidance on this point as soon as it becomes available. You can view the update from CRL here.

There are Chartered Legal Executive colleagues in my firm, who are doing conveyancing under supervision. Why is litigation different?

The Legal Services Act states you can carry out reserved legal activities if you are authorised or exempt. The exemptions for conveyancing (and probate) include carrying out work under the supervision of an authorised person, but there is no provision for litigation to be carried out under supervision. To conduct litigation you must be independently authorised, and without that authorisation you can only assist an authorised person in the conduct of litigation.

I want to get litigation rights, but I don’t do any advocacy, so wouldn’t be able to be authorised for litigation and advocacy. What can I do?

Currently CRL can only authorise for both litigation and advocacy combined. As this has been a challenge for some members, CILEX has lobbied for a change of approach.

CRL has recently closed its consultation on awarding standalone litigation rights and its intention to offer standalone litigation rights in future, removing the barriers associated with the advocacy requirement. CRL is preparing an application to authorise standalone litigation rights, which it anticipates submitting to the Legal Services Board in October. We will keep you updated on these developments.

I am currently completing a CPQ litigation pathway, will I have the right to conduct litigation when I qualify?

Yes, those studying the CILEX Professional Qualification (CPQ) or CILEX Graduate Qualification (CGQ) on a litigation pathway, or the Level 7 Chartered Legal Executive Litigator and Advocate apprenticeship, will be authorised to conduct litigation on completion of all elements of the qualification.

LEGAL SERVICES BOARD STATEMENT OF 13 OCTOBER 2025 FOLLOWING MEETINGS WITH REGULATORS

LSB Statement: High Court Decision in Mazur – 13 October 2025

Posted on 13th October 2025

---

The Mazur judgment does not change the law under the Legal Services Act 2007. However, it has prompted discussion about how the reserved legal activity of conducting litigation has been interpreted and applied.

A Legal Services Board (LSB) spokesperson said:

‘On 9 October 2025, the LSB met senior executives from all relevant approved regulators and representative bodies.

‘At our meeting, we emphasised that lawyers and legal professionals conducting litigation need clear and accurate information. Furthermore, all regulated individuals must work within their authorised scope of practice. We stressed the importance of collaboration between the relevant bodies to ensure a consistent approach across the sector.

‘The attendees agreed to work together on these issues.

They also told us that they had reviewed their current guidance. If needed, they had issued more advice to provide clear and accurate information.

‘Meanwhile, the LSB has received an application from CILEx Regulation. It is to enable its regulated community to obtain standalone litigation practice rights.

We have published the application on our website. We are prioritising the application within our statutory process. 

‘To establish what happened in the past, we will undertake a review.

This will examine how approved regulators and regulatory bodies ensured that information on conducting litigation was accurate and reliable.

Our review will help us all learn lessons and maintain clarity and confidence in the regulatory framework.’

My second Zoominar : 4.00pm Thursday, 16 October 2025 lasting 1.5 hours; a recording and notes will be sent whether or not you attend live and as many of your colleagues as you want can attend the Zoominar and receive the recording and notes.

The cost is £100 plus VAT, and you can book here.

Buy the 1-hour recording of the first  Zoominar and Newsletter Special for £100 plus VAT here. In this session I covered the following:

• Re-opening old cases
• Costs challenges to all post 2007 cases
• Criminal offence
• Reserved business
• Conducting litigation
• The end of paralegals?
• What you need to do now

The second Zoominar will cover:

• Is Mazur wrongly decided?

• Legal Services Act 2007

• What is litigation?

• Pre-issue work
• Tribunals
• Small Claims Track
• Portals
• Pre-action Protocols
• Pre-action applications

• Conducting

• Difference between supervision and conducting
• Delegation
• Supporting
• What is, and is not, suitable for delegation

• Authorized persons

• Legal Executives
• Exempt persons

• Advocacy

• Reserved legal activities – Part 3 Legal Services Act 2007

• Changes to make in practice

• Closed cases

• Ongoing cases

My second Zoominar : 4.00pm Thursday, 16 October 2025 lasting 1.5 hours; a recording and notes will be sent whether or not you attend live and as many of your colleagues as you want can attend the Zoominar and receive the recording and notes.

The cost is £100 plus VAT, and you can book here.

Buy the 1-hour recording of the first  Zoominar and Newsletter Special for £100 plus VAT here. In this session I covered the following:

• Re-opening old cases
• Costs challenges to all post 2007 cases
• Criminal offence
• Reserved business
• Conducting litigation
• The end of paralegals?
• What you need to do now

The second Zoominar will cover:

• Is Mazur wrongly decided?

• Legal Services Act 2007

• What is litigation?

• Pre-issue work
• Tribunals
• Small Claims Track
• Portals
• Pre-action Protocols
• Pre-action applications

• Conducting

• Difference between supervision and conducting
• Delegation
• Supporting
• What is, and is not, suitable for delegation

• Authorized persons

• Legal Executives
• Exempt persons

• Advocacy

• Reserved legal activities – Part 3 Legal Services Act 2007

• Changes to make in practice

• Closed cases

• Ongoing cases

you can book here.

My second Zoominar : 4.00pm Thursday, 16 October 2025 lasting 1.5 hours; a recording and notes will be sent whether or not you attend live and as many of your colleagues as you want can attend the Zoominar and receive the recording and notes.

The cost is £100 plus VAT, and you can book here.

Buy the 1-hour recording of the first  Zoominar and Newsletter Special for £100 plus VAT here. In this session I covered the following:

• Re-opening old cases
• Costs challenges to all post 2007 cases
• Criminal offence
• Reserved business
• Conducting litigation
• The end of paralegals?
• What you need to do now

The second Zoominar will cover:

• Is Mazur wrongly decided?

• Legal Services Act 2007

• What is litigation?

• Pre-issue work
• Tribunals
• Small Claims Track
• Portals
• Pre-action Protocols
• Pre-action applications

• Conducting

• Difference between supervision and conducting
• Delegation
• Supporting
• What is, and is not, suitable for delegation

• Authorized persons

• Legal Executives
• Exempt persons

• Advocacy

• Reserved legal activities – Part 3 Legal Services Act 2007

• Changes to make in practice

• Closed cases

• Ongoing cases

you can book here.

My second Zoominar : 4.00pm Thursday, 16 October 2025 lasting 1.5 hours; a recording and notes will be sent whether or not you attend live and as many of your colleagues as you want can attend the Zoominar and receive the recording and notes.

The cost is £100 plus VAT, and you can book here.

Buy the one hour recording of the first  Zoominar and Newsletter Special for £100 plus VAT here.

My view is that it is vanishingly unlikely that anyone will be prosecuted under the criminal provisions of the Legal Services Act which are contained in Sections 14- 17 which I set out in full at the end of this piece.

Pre-issue work

I deal in detail in this piece with the issue of why there will be no prosecutions,  but of more significance in practice is Section 14(4) in relation to pre-issue work as it refers to:

Or a right to conduct litigation, in relation to any proceedings or contemplated proceedings (my bold).

That is at odds with what many commentators are saying, and much of the case law, to the effect that pre-issue work can never amount to the conduct of litigation and thus is not a reserved activity.

 Section 14(4) of the Legal Services Act 2007 clearly anticipates contemplated proceedings, that is very obviously pre-issue work, as potentially falling within the definition of conducting litigation.

I will deal with that whole issue in more detail in another piece but wanted to flag it up here.

Section 15

Section 15, set out at the end of this piece, largely exempts Trades Unions from the provisions of the Act, but Section 15 sub-sections (1) to (4) do not deal with Trades Unions and are virtually incomprehensible, a point made by the courts.

I do not understand Section 15(1) as Section 207 of the Act is an Interpretation section which defines

 “a person”.

Section 15(2) makes it clear that an employee is a person, but that is a matter of common sense, and dealt with by Section 207, and adds nothing.

“E” in this section means Employee.

“P” means person.

I have dealt with the definition of person in my piece

MAZUR: HAS IT BEEN WRONGLY DECIDED?  CAN WE ALL GO BACK TO SLEEP?

which I set out here as a background to the rest of this piece.

Section 207 of the Legal Services Act 2007, a definition section states:

““person” includes a body of persons (corporate or unincorporate);

“reserved legal services” means services provided by a person which consist of or include reserved legal activities carried on by, or on behalf of, that person.””

Those definitions appear consecutively, no doubt because they are in alphabetical order, but it also means that if there was an error in the definition of “person” in relation to the provision of “reserved legal services” it would easily have been spotted.

There is no reason to suggest that there is any mistake.

Section 13(2) of the Legal Services Act 2007 the one that has got all the attention reads:

“(2)      A person is entitled to carry on an activity (“the relevant activity”) which is a reserved legal activity where—

• the person is an authorised person in relation to the relevant activity, or

(b) the person is an exempt person in relation to that activity.”

Section 18 reads:

“(1)      For the purposes of this Act “authorised person”, in relation to an activity (“the relevant activity”) which is a reserved legal activity, means —

(a)        a person who is authorised to carry on the relevant activity by a relevant approved regulator…”

There is no doubt that the Solicitors Regulation Authority is a relevant approved regulator.

Rule 5 of the Solicitors Code of Conduct reads, where relevant:

“If you are… authorised by the SRA you are entitled to carry on –

• all reserved activities except notarial activities.”

Paragraph 31 of the Mazur judgment reads:

“31. The Law Society referred to the SRA’s Authorisation of Individuals Regulations which provide at paragraph 9.1 that a solicitor with a practising certificate was “entitled to carry on all reserved legal activities except notarial activities”. Further, that the SRA’s Authorisation of Firms Rules provide at paragraph 5.3 that “An authorised body may only carry on a reserved legal activity through a person who is entitled to do so”.

That cannot change the statutory definition of “person” which includes the firm of solicitors itself.

I see no mention in the Mazur judgment of the key parts of section 207, which is the definition section.

Although an Act of Parliament can change the law without any explanation, the usual canons of statutory interpretation means that a codifying statute is assumed not to change the law unless it is clear that it does so.

The Legal Services Act 2007 was a mixture of being a codifying statute and repealed but largely re-enacted the Courts and Services Act 1990 but also contained major new provisions such as the permitting of Alternative Business Structures and the Legal Services Ombudsman.

It was an Act of Parliament liberalizing the legal profession with no suggestion that there was an intention to restrict heavily the identity of those who could conduct litigation, and there is nothing in any White Paper, or Ministerial Statements, or in Hansard – the record of proceedings in Parliament, to indicate any, let alone a major, change in the law on this point, and one creating criminal liabilities with a maximum sentence of two years in prison.

There is no doubt that before the Legal Services Act 2007 came into force on 1 January 2010, anyone in a law firm could conduct litigation under the supervision of an authorized person.

There is clearly a very powerful argument that the Legal Services Act 2007 preserved the status quo as to who could conduct litigation with no intention to change the law.

Any thoughts?

I am very grateful to Peter Trotman, a Chartered Legal Executive with Ross Aldridge Solicitors for raising this issue with me.

Back to this piece…

Section 15(3) states that for the purposes of subsection (2), it is irrelevant whether the person is entitled to carry on the activity.

Again, I cannot see what that brings to the party – an employee is an employee and fairly obviously form the point of view of defining an employee as an employee it does not matter whether the employer is entitled to carry on the activity, that is whether the person is a law firm or a football club or a deep-sea fishing company.

Some are suggesting that that is aimed at showing that an employee is guilty of an offence even if the employer is entitled to carry on the activity, but nothing in the Act says that, and I think that it is wrong.

Section 15(4) is also virtually incomprehensible but read in conjunction with Section 15(5) appears to exclude inhouse people working for the employer where the provision of reserved legal activities is not part of the service offered to the public or a section of the public.

Unfortunately, the terms “relevant services”, “relevant activity”, “reserved legal activity”, and “activity” are used almost at random.

Section 15(1) states:

• This section applies for the interpretation of references in this Act to a person carrying on an activity which is a reserved activity.

In fact, apart from section 15(2) and (5) the rest of the section – 11 subsections in all – deals with entirely different matters, largely exempting trades unions from the effect of the Act.

In any event there is a whole section – 207 – which is the Interpretation Section.

Apparently random references to

• Relevant services

• Relevant activity

• Reserved legal services

• Reserved legal activities

do not help.

What is the difference between a service and an activity?

Section 15(5) states:

(5) Relevant services are services which consist of or include the carrying on of the relevant activity by employees of P in their capacity as employees of P.

Section 207(2) distinguishes between a

 “reserved legal activity (s. 207(2) (a); and

“a legal activity” (s. 207(2)(b)

without, as far as I can see, defining a legal activity.

Now that may just mean a legal activity which is not a reserved legal activity, but in makes no sense in this context and none of the rest of the Act is about that.

 Section 207(2) reads

(2)        The services within this subsection are—

            (a)        any services provided by a person who is an authorised person in relation to an activity                which is a reserved legal activity, and

            (b)        any other services provided by a person which consist of or include a legal activity                       carried on by, or on behalf of, that person.

and that is that. There is nothing else in the subsection. It is gibberish. Presumably it meant to say

 “The services within this section”

If anyone else can make more sense of section 15, together with the relevant parts of section 207, please enlighten me.

The idea that a criminal court will convict on the basis of some of the worst wording ever in an Act of Parliament is not credible.

Section 16

Section 16 appears to impose criminal liability on an employer, irrespective of the fact that the employer is entitled to carry on a reserved legal activity, but it most certainly does not say that there is criminal liability if the employee is not authorized to carry on the reserved legal activity.

What it says is that the employer is liable if the employee is committing an offence under Section 14.

That is a circular argument.

In my view the fact that a person includes a body corporate or incorporate – see Section 207 – means that the employee of such an authorized body is not committing an offence, and therefore, the employer is not committing an offence either because for the employer to commit an offence, the employee has to be committing an offence under section 14.

That is the effect of  Section 16(2)(b).

In relation to this matter, there is a different defence which is set out Section 16(4):

(4)        In proceedings for an offence under subsection (1), it is a defence for the accused to show            that the accused took all reasonable precautions and exercised all due diligence to avoid         committing the offence.

That will be fact dependent.

Section 17

Section 17 is different in the sense that it relates to a person wilfully pretending to be entitled to carry on a reserved legal activity and they are not so entitled or with the intention of implying falsely that that person is so entitled, to take or use any name, title or description.

An obvious example would be for an unqualified person to describe themselves as a solicitor, or costs lawyer, or Chartered Legal Executive etc.

Section 14

Here is Section 14

14        Offence to carry on a reserved legal activity if not entitled

(1)        It is an offence for a person to carry on an activity (“the relevant activity”) which is a       reserved legal activity unless that person is entitled to carry on the relevant activity.

(2)        In proceedings for an offence under subsection (1), it is a defence for the accused to show            that the accused did not know, and could not reasonably have been expected to know, that     the offence was being committed.

(3)        A person who is guilty of an offence under subsection (1) is liable—

            (a)        on summary conviction, to imprisonment for a term not exceeding or a fine not                           exceeding the statutory maximum (or both), and

            (b)        on conviction on indictment, to imprisonment for a term not exceeding 2 years or a                     fine (or both).

(4)        A person who is guilty of an offence under subsection (1) by reason of an act done in the purported exercise of a right of audience, or a right to conduct litigation, in relation to any       proceedings or contemplated proceedings is also guilty of contempt of the court concerned         and may be punished accordingly.

(5)        In relation to an offence under subsection (1) committed before, the reference in subsection        (3)(a) to is to be read as a reference to 6 months.

Clearly, an offence is created, but my view is that “person” has a very much wider meaning than most commentators are stating, and I set all of this out in my piece

MAZUR: HAS IT BEEN WRONGLY DECIDED?  CAN WE ALL GO BACK TO SLEEP?

set out above.

Section 207(1) which very unhelpfully has no fewer than five sub-paragraphs (a), four sub-paragraphs (b), two sub-paragraphs (c), and two subparagraphs (d), making it impossible to refer to the appropriate sub-section and sub-sub-section, contains the following under the fifth and final sub-section (b):

“reserved legal services” means services provided by a person which consist of or include             reserved legal activities carried on by, or on behalf of, that person; (my bold)

That appears to permit the carrying on “on behalf of” a firm or authorized person reserved legal activities.

What else can it mean?

If the person is authorized to carry on reserved legal activities, then they are not carrying those out “on behalf of” anyone else, but in their own right.

The whole tenet of the Mazur Judgment is that a person cannot conduct litigation, being a reserved legal service, unless they themselves are an authorized person, but rather can only assist.

Everyone agrees that assisting in litigation is not a reserved activity, and everyone agrees that conducting litigation is a reserved activity.

The point is whether an unauthorized person, properly supervised can conduct litigation, that is carry out reserved legal activity.

The definition section which I have just quoted appears to put that beyond doubt.

Clearly, if the person is authorized in their own right, then the reserved legal activities are carried out “by” them, and if they are not so authorized, but are properly supervised, then they are conducting litigation “on behalf of” that person.

There can be no other meaning.

Remember that a person who is assisting in the conduct of litigation is not authorized, but rather is exempt, which is a different matter.

Schedule 3, Paragraph 1(2) and (3) specifically define an exempt person as a person who is not an authorized person but, subject to satisfying various conditions, is exempt.

It is not clear why such an exemption is needed in the sense that assisting in litigation is not conducting litigation and therefore, is not to reserve activity.

Here is a comment by one of the country’s top lawyers, Ben Williams KC:

“I am puzzled why everyone is assuming Mazur is correct. True, it makes a highly plausible interpretation of the literal words of the statute. But statutes are interpreted non-literally all the time. Solicitors have been permitted to conduct litigation through their clerks for generations.

Everyone knew this when the LSA was enacted. It is reflected in authorities, the rules of court, even things like guideline rates (which explicitly include legal executives in those able to be grade A fee earners, and unadmitted staff in grades B to D). It is common knowledge – and was equally so in 2007 – that some sectors like PI and crime are massively reliant on unadmitted staff. 

Is there any indication at all that the LSA was intended to change this? Is this something mentioned in the White Paper, the consultation, or ministerial statements? No. On the contrary, the LSA was intended to extend the right to conduct litigation. 

All the indications are that the LSA was never intended to operate as the court in Mazur has concluded. It is clear that the case was not very fully argued, and I do not think people should be assuming that it is inevitably the last word.”

Let us assume that “a person” has carried on a reserved activity and is unquestionably unauthorized, for example, they are not operating at all through the medium of a law firm and not a barrister, solicitors, legal executive, costs lawyer, or other exempt person.

Even in those circumstances, it is defence for the accused to show that she, he, or it if it is a corporate entity, did not know, and could not reasonably have been expected to know, that the offence was being committed.

Whether or not the accused actually knew, is a question of fact and

 “could not reasonably have been expected to know”

 is much vaguer and more inchoate and will be fact-dependent.

Let us step back and assume that I am wrong and that the court in Mazur is right about who is a “person”.

It seems to me that given the widespread uncertainty, the fact that the Act has been in place for 18 years, albeit only in force for 15 years, since this issue has arisen and the incorrect advice given by both the Solicitors Regulation Authority and the Chartered Institute of Legal Executives that the accused will be able to say that they did not know, and could not reasonably have been expected to know, that the offence was being committed, as by relying on all professional guidance given by the professional bodies, they would not be committing an offence.

That also raises the interesting issue of whether the Solicitors Regulation Authority and the Institute of Chartered Legal Executives have been aiding and abetting offences under Section 14(1).

I really do not think that the courts will want to go there, even if many of the readers of this piece take a different view.

Generally, reference to individuals and firms “inadvertently committing criminal offences” are misguided in my view as by definition, if it was inadvertent, then the perpetrator did not know that the offence was being committed.

That does still leave open the issue of whether they could reasonably have been expected to know, but I have dealt with that above in relation to the advice given by the regulators.

It should be noted that a person must be guilty of an offence under Section 14(1) before the conduct of itself can amount to contempt of court.

That is of course the criminal burden of proof, that is generally expressed as having to prove the matter beyond reasonable doubt.

Given the background to this whole issue, my view is that absent to the sort of scenario I have posited, that is an entirely unregulated person working outside the aegis of a law firm that will be extremely difficult to establish, and it is hard to see how the Crown Prosecution Service would consider it to the public interest to prosecute.

Gordon Exall has referred to the statutory defence probably offering a “get out of jail” free card for past transgressions, and I agree.

The whole issue was considered in the case of

Baxter v Doble & Anor [2023] EWHC 486 (KB)

which runs to 55 pages and 237 paragraphs.

That was in the context of a contempt of court application, and the court found that there had been a breach of Section 14(1) but that statutory defence applied.

Significantly, the court had this to say:

229.     First, the law was unclear. The statutory wording itself did not give any clear steer as regards      whether any particular advice or assistance would amount to the conduct of litigation. The             words “the prosecution of proceedings” are vague and uncertain. The state of the case-law         authorities did not provide clarity in this regard. It is not easy to find clear guidance from the            authorities. They were all fact-specific. None of the cases was on all fours, factually, with the            business model pursued by Mrs Doble. The Court of Appeal in Ndole said that it is a matter of      fact and degree. The difficulty facing an advisor in trying to work out where the line should     be drawn is illustrated by the following observation by the judge in Gill v Kassam, at             paragraph 46,

            “The emphasis of the statutory definition at (a) and (b) is on the activity involved in the issue       (or commencement) of proceedings, their prosecution and defence, rather than in the provision of assistance to a litigant in preparation or presenting their case.”

That is a damning indictment of the drafting of this legislation and it is hard to envisage any jury finding anyone guilty in these circumstances.

The irony of course is that any uninsured, unregulated, unqualified, untrained person can operate a Will writing service for profit from their cell in prison, and that is fine and legal, even though making a Will is probably the most important use of legal work that most people had done in their lives.

Maybe that should be part of the prison rehabilitation programme, especially for those convicted of fraud and financial offences…

I now set out sections 14 to 17 of the Legal Services Act which appear under the heading “Offences”.

14 Offence to carry on a reserved legal activity if not entitled

(1)        It is an offence for a person to carry on an activity (“the relevant activity”) which is a       reserved legal activity unless that person is entitled to carry on the relevant activity.

(2)        In proceedings for an offence under subsection (1), it is a defence for the accused to show            that the accused did not know, and could not reasonably have been expected to know, that     the offence was being committed.

(3)        A person who is guilty of an offence under subsection (1) is liable—

            (a)        on summary conviction, to imprisonment for a term not exceeding or a fine not                           exceeding the statutory maximum (or both), and

            (b)        on conviction on indictment, to imprisonment for a term not exceeding 2 years or a                     fine (or both).

(4)        A person who is guilty of an offence under subsection (1) by reason of an act done in the purported exercise of a right of audience, or a right to conduct litigation, in relation to any        proceedings or contemplated proceedings is also guilty of contempt of the court concerned         and may be punished accordingly.

(5)        In relation to an offence under subsection (1) committed before, the reference in subsection        (3)(a) to is to be read as a reference to 6 months.

15 Carrying on of a reserved legal activity: employers and employees etc

(1)        This section applies for the interpretation of references in this Act to a person carrying on an        activity which is a reserved legal activity.

(2)        References to a person carrying on an activity which is a reserved legal activity include a person (“E”) who—

            (a)        is an employee of a person (“P”), and

            (b)        carries on the activity in E’s capacity as such an employee.

(3)        For the purposes of subsection (2), it is irrelevant whether P is entitled to carry on the activity.

(4)        P does not carry on an activity (“the relevant activity”) which is a reserved legal activity by           virtue of E carrying it on in E’s capacity as an employee of P, unless the provision of relevant      services to the public or a section of the public (with or without a view to profit) is part of P’s       business.

(5)        Relevant services are services which consist of or include the carrying on of the relevant   activity by employees of P in their capacity as employees of P.

(6)        Where P is an independent trade union, persons provided with relevant services do not    constitute the public or a section of the public where— (a) the persons are provided with the    relevant services by virtue of their membership or former membership of P or of another person’s membership or former membership of P, and (b) the services are excepted         membership services.

(7)        Subject to subsection (8), “excepted membership services” means relevant services which            relate to or have a connection with—

            (a)        relevant activities of a member, or former member, of the independent trade union;

            (b)        any other activities carried on for the purposes of or in connection with, or arising                       from, such relevant activities;

            (c)        any event which has occurred (or is alleged to have occurred) in the course of or in                      connection with such relevant activities or activities within paragraph (b);

            (d)        activities carried on by a person for the purposes of or in connection with, or arising                    from, the person’s membership of the independent trade union; and such other                                    relevant services as the Lord Chancellor may by order specify.

(8)        The Lord Chancellor may by order make provision about the circumstances in which relevant       services do or do not relate to, or have a connection with, the matters mentioned in paragraphs (a) to (d) of subsection (7).

(9)        Subject to that, the Lord Chancellor may by order make provision about—

            (a)        what does or does not constitute a section of the public;

            (b)        the circumstances in which the provision of relevant services to the public or a section                 of the public does or does not form part of P’s business.

(10)      The Lord Chancellor may make an order under subsection (7), (8) or (9) only on the          recommendation of the Board.

(11)      If P is a body, references to an employee of P include references to a manager of P. (12) In           subsection (7), “relevant activities”, in relation to a person who is or was a member of an     independent trade union, means any employment (including self-employment), trade,     occupation or other activity to which the person’s membership of the trade union relates or   related.

16 Offence to carry on reserved legal activity through person not entitled

(1)        Where subsection (2) applies it is an offence for a person (“P”) to carry on an activity (“the           relevant activity”) which is a reserved legal activity, despite P being entitled to carry on the   relevant activity. (2) This subsection applies if—

            (a)        P carries on the relevant activity by virtue of an employee of P (“E”) carrying it on in                    E’s capacity as such an employee, and

            (b)        in carrying on the relevant activity, E commits an offence under section 14.

(3)        If P is a body, references in subsection (2) to an employee of P include references to a manager    of P.

(4)        In proceedings for an offence under subsection (1), it is a defence for the accused to show            that the accused took all reasonable precautions and exercised all due diligence to avoid         committing the offence.

(5)        A person who is guilty of an offence under subsection (1) is liable—

            (a)        on summary conviction, to imprisonment for a term not exceeding or a fine not                           exceeding the statutory maximum (or both), and

            (b)        on conviction on indictment, to imprisonment for a term not exceeding 2 years or a                     fine (or both).

(6)        A person who is guilty of an offence under subsection (1) by reason of an act done in the purported exercise of a right of audience, or a right to conduct litigation, in relation to any        proceedings or contemplated proceedings is also guilty of contempt of the court concerned         and may be punished accordingly.

(7)        In relation to an offence under subsection (1) committed before, the reference in subsection        (5)(a) to is to be read as a reference to 6 months.

17 Offence to pretend to be entitled

(1)        It is an offence for a person—

            (a)        wilfully to pretend to be entitled to carry on any activity which is a reserved legal                         activity when that person is not so entitled, or

            (b)        with the intention of implying falsely that that person is so entitled, to take or use any                 name, title or description.

(2)        A person who is guilty of an offence under subsection (1) is liable—

            (a)        on summary conviction, to imprisonment for a term not exceeding or a fine not                           exceeding the statutory maximum (or both), and

            (b)        on conviction on indictment, to imprisonment for a term not exceeding 2 years or a                    fine (or both).

(3)        In relation to an offence under subsection (1) committed before, the reference in subsection        (2)(a) to is to be read as a reference to 6 months.

Here is a podcast of a 28 minute interview of me by Dr Siamak Goudarzi of Nexter Law

My second Zoominar : 4.00pm Thursday, 16 October 2025 lasting 1.5 hours; a recording and notes will be sent whether or not you attend live and as many of your colleagues as you want can attend the Zoominar and receive the recording and notes.

The cost is £100 plus VAT, and you can book here.

Buy the 1-hour recording of the first  Zoominar and Newsletter Special for £100 plus VAT here.

Section 207 of the Legal Services Act 2007, a definition section states:

““person” includes a body of persons (corporate or unincorporate);

“reserved legal services” means services provided by a person which consist of or include reserved legal activities carried on by, or on behalf of, that person.””

Those definitions appear consecutively, no doubt because they are in alphabetical order but it also means that if there was an error in the definition of “person” in relation to the provision of “reserved legal services” it would easily have been spotted.

There is no reason to suggest that there is any mistake.

Section 13(2) of the Legal Services Act 2007 the one that has got all the attention reads:

“(2)        A person is entitled to carry on an activity (“the relevant activity”) which is a reserved legal activity where—

• the person is an authorised person in relation to the relevant activity, or

(b) the person is an exempt person in relation to that activity.”

Section 18 reads:

“(1)        For the purposes of this Act “authorised person”, in relation to an activity (“the relevant activity”) which is a reserved legal activity, means —

(a)          a person who is authorised to carry on the relevant activity by a relevant approved regulator…”

There is no doubt that the Solicitors Regulation Authority is a relevant approved regulator.

Rule 5 of the Solicitors Code of Conduct reads, where relevant:

“If you are… authorised by the SRA you are entitled to carry on –

• all reserved activities except notarial activities.”

Paragraph 31 of the Mazur judgment reads:

“31. The Law Society referred to the SRA’s Authorisation of Individuals Regulations which provide at paragraph 9.1 that a solicitor with a practising certificate was “entitled to carry on all reserved legal activities except notarial activities”. Further, that the SRA’s Authorisation of Firms Rules provide at paragraph 5.3 that “An authorised body may only carry on a reserved legal activity through a person who is entitled to do so”.

That cannot change the statutory definition of “person” which includes the firm of solicitors itself.

I see no mention in the Mazur judgment of section 207, which is the definition section.

Although an Act of Parliament can change the law without any explanation, the usual canons of statutory interpretation means that a codifying statute is assumed not to change the law unless it is clear that it does so.

The Legal Services Act 2007 was a mixture of being a codifying statute and repealed but largely re-enacted the Courts and Services Act 1990 but also contained major new provisions such as the permitting of Alternative Business Structures and the Legal Services Ombudsman.

It was considered an Act of Parliament liberalizing the legal profession with no suggestion that there was an intention to restrict heavily the identity of those who could conduct litigation.

There is no doubt that before the Legal Services Act 2007 came into force on 1 January 2010, anyone in a law firm could conduct litigation under the supervision of an authorized person.

There is clearly an argument that the Legal Services Act 2007 preserved the status quo as to who could conduct litigation with no intention to change the law.

Any thoughts?

I am very grateful to Peter Trotman, a Chartered Legal Executive with Ross Aldridge Solicitors for raising this issue with me.

This subject will be discussed in my 1.5 hour Zoominar on Thursday, 16 October 2025 at 4pm and you and your colleagues will receive a recording and notes, whether or not you can attend and it can be booked here for £100 plus VAT.

The recording of the first Zoominar on the Mazur decision can be purchased here for £100 plus VAT.

Rights of Audience are dealt with in Schedule 3, paragraph 1 of the Legal Services Act 2007 which creates a category of Exempt Persons who, although not authorized persons are allowed to appear in  court.

Authorized Persons

Authorized Persons include not only solicitors but also Chartered Legal Executives with the relevant qualifications.

Costs Lawyers are authorized to conduct litigation in relation to costs matters and so can give instructions to non-authorized individuals to undertake advocacy in chambers.

So, a Costs Lawyer can instruct a non-authorized colleague to attend, for example, a Costs and Case Management Conference or a detailed assessment hearing.

I set out Schedule 3, paragraph 1 at the end of this piece.

Exempt Persons

A key provision for the purposes of the

Mazur & Anor v Charles Russell Speechlys LLP [2025] EWHC 2341 (KB)

decision is that a person is exempt if s/he is an individual whose work includes assisting in the conduct of litigation and is under instructions from an authorized person, within the definition set out above.

Those instructions can be general or in relation to the specific proceedings and the solicitor must supervise the individual in order for that individual to be exempt.

Beyond those provisions, the individual herself or himself does not need to have any qualifications and can be a paralegal or a secretary or indeed any other member of the staff of a firm of solicitors, or indeed someone who is not a member of the firm.

The exemption only applies to proceedings being heard in chambers:

In the High Court; or

• in the County Court; or

• in the Family Court by a judge who is not, or by two or more judges at least one of whom is not, within section 31C(1)(y) of the Matrimonial and Family Proceedings Act 1984 (lay justices).

An exempt person cannot appear in reserved family proceedings.

I set out below the definition of reserved family proceedings and the relevant Family Court proceedings.

That is the effect of paragraph 1(7) of Schedule 3 of the Act, and this is considerably wider than the Conduct of Litigation exemption at paragraph 2 of Schedule 3, which I will deal with separately.

My reading of paragraph 1(7) is that there is no requirement that for the person to be exempt they have to be employed by the solicitor or firm of solicitors, but rather that the exempt person must be an individual whose work includes assisting in the Conduct of Litigation and is under instructions from a solicitor who is supervising that individual.

This could be an external person, and this used to come up frequently in the context of costs draftsman with the courts regarding them as temporarily employed by the firm of solicitors.

 A person is also an exempt person if the individual court has granted them a Right of Audience in relation to those proceedings (paragraph 1(2)(b).

A person is also exempt if any order or enactment gives them a Right of Audience before any particular type of court.

Provided that they are a solicitor or a barrister, the Attorney General, and the Solicitor General are also exempt persons, and the interesting point there is that if a politician who is not a solicitor or barrister is appointed to those positions then they do not have the Right of Audience [paragraph 1(4)].

Litigants in person are granted Rights of Audience by paragraph 1(6)(b).

Family Proceedings

Paragraph 1(10) defines family proceedings and reserved family proceedings as follows:

““family proceedings” has the same meaning as in the Matrimonial and Family Proceedings Act 1984 (c. 42) and also includes any proceedings in the family court and ] any other proceedings which are family proceedings for the purposes of the Children Act 1989 (c. 41);

“reserved family proceedings” means such category of family proceedings as the Lord Chancellor may, after consulting the President of the Law Society and with the concurrence of the President of the Family Division, by order prescribe.”

In this piece I am dealing with the effect of the Mazur decision on Rights of Audience, and in short it does not affect the position.

The whole issue of Rights of Audience generally is beyond the scope of this piece.

On the subject generally, it may be helpful to look at the previous legislation, repealed/codified by the Legal Services Act 2007.

Previously, Rights of Audience were governed by Section 27 of the Courts and Legal Services Act 1990 which, so far as relevant, read;

“Rights of Audience

(1) The question whether a person has a right of audience before a court or in relation to any proceedings, shall be determined solely in accordance with the provisions of this part.

(2) A person shall have a right of audience before a court in relation to any proceedings only in the following cases:

…

(e) where –

(i)         he is employed (whether wholly or in part) or is otherwise engaged to assist                   in the conduct of litigation and is doing so under instructions given (either             generally or in relation to the proceedings) by a qualified litigator; and

                        (ii)        the proceedings are being heard in Chambers in the High Court or a County                                Court and are not reserved family proceedings.”

The Legal Services Act 2007 replaced the Courts and Legal Services Act 1990 with effect from 1 January 2010.

In Chambers

It is unfortunate that the Legal Services Act 2007 has preserved the rather out of date term “in chambers” which has caused confusion in the past, including among the judiciary.

The term is not defined in the Legal Services Act 2007.

“In chambers” has nothing to do with being “in private” and that is where much of the confusion has arisen.

Most hearings that are in chambers are also open to the public, including Case Management Conferences, interim applications and detailed assessment hearings.

Given there was previously no dispute that detailed assessments were heard “in chambers”, the language of the act unambiguously allowed law costs draftsmen, outdoor clerks, paralegals, etc to attend such hearings where they were: “otherwise engaged to assist in the conduct of litigation and is doing so under instructions given (either generally or in relation to the proceedings) by a qualified litigator”.  They did not need to be “employed”. 

CPR 39.2 sets out when hearings may be heard in private, but the general rule is that they are heard in public, and indeed the heading to CPR 39.2 is

General – Hearing to be in Public

I set that Civil Procedure Rule out at the end of this piece, but it is clear that the very hearings that may, or must, be heard in private would be most unsuitable for a non-authorized person to attend as advocate and this reinforces the point that “in chambers” and “in private” are absolutely nothing whatsoever to do with each other.

Examples for a hearing that may be held in private are:

(a)        publicity would defeat the object of the hearing;

(b)        it involves matters relating to national security;

(c)        it involves confidential information (including information relating to personal financial   matters)

and publicity would damage that confidentiality;

(d)        a private hearing is necessary to protect the interests of any child or protected party;

(e)        it is a hearing of an application made without notice and it would be unjust to any respondent     for there to be a public hearing;

(f)         it involves uncontentious matters arising in the administration of trusts or in the administration of a deceased person’s estate; or

(g)        the court considers this to be necessary, in the interests of justice.”

Costs Lawyers

As we have seen, Costs Lawyers are authorized to conduct litigation in relation to cost matters and so can give instructions to non-authorized individuals to undertake advocacy in chambers.

As made clear throughout this piece, the decision in Mazur does not affect Advocacy Rights.

The issue of the extent to which Costs Lawyers can conduct litigation, essentially the definition of “cost matters” will be looked at in another piece.

I am very grateful to Simon Gibbs, of Gibbs Wyatt Stone ([email protected]), a Costs Specialist, traditionally in Defence work, but now carrying out Claimant work as well.

Simon has kindly given me permission to use five pieces on Rights of Audience which appeared on his excellent blog and his blog is here.

Those pieces, and the links are:

• Rights of audience at detailed assessment – Legal Costs Specialists – Gibbs Wyatt Stone

• The real rights of audience “myth” – Legal Costs Specialists – Gibbs Wyatt Stone

• “Rights of audience myth” myth – Legal Costs Specialists – Gibbs Wyatt Stone

• Rights of audience of law costs draftsmen – Part 2 – Legal Costs Specialists – Gibbs Wyatt Stone

• Rights of audience of law costs draftsmen – Part 1 – Legal Costs Specialists – Gibbs Wyatt Stone

SCHEDULE 3

Exempt persons

Rights of audience

“1    (1) This paragraph applies to determine whether a person is an exempt person for the purpose of exercising a right of audience before a court in relation to any proceedings (subject to paragraph 7).

(2) The person is exempt if the person—

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

(b) has a right of audience granted by that court in relation to those proceedings.

(3) The person is exempt if the person—

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

(b) has a right of audience before that court in relation to those proceedings granted by or under any enactment.

(4) The person is exempt if the person is the Attorney General or the Solicitor General and—

(a) the name of the person is on the roll kept by the Law Society under section 6 of the Solicitors Act 1974 (c. 47), or

(b) the person has been called to the Bar by an Inn of Court.

(5) The person is exempt if the person is the Advocate General for Scotland and is admitted—

(a) as a solicitor in Scotland under section 6 of the Solicitors (Scotland) Act 1980 (c. 46), or

(b) to practise as an advocate before the courts of Scotland.

(6) The person is exempt if the person—

(a) is a party to those proceedings, and

(b) would have a right of audience, in the person’s capacity as such a party, if this Act had not been passed.

(7) The person is exempt if—

(a) the person is an individual whose work includes assisting in the conduct of litigation,

(b) the person is assisting in the conduct of litigation—

(i)  under instructions given (either generally or in relation to the proceedings) by an individual to whom sub-paragraph (8) applies, and

(ii) under the supervision of that individual, and

(c) the proceedings are not reserved family proceedings and are being heard in chambers—

(i) in the High Court or county court, or

(ii) in the family court by a judge who is not, or by two or more judges at least one of whom is not, within section 31C(1)(y) of the Matrimonial and Family Proceedings Act 1984 (lay justices).]

(8) This sub-paragraph applies to—

(a) any authorised person in relation to an activity which constitutes the conduct of litigation;

(b) any person who by virtue of section 193 is not required to be entitled to carry on such an activity.

(9) The person is an exempt person in relation to the exercise of a right of audience in proceedings on an appeal from the Comptroller-General of Patents, Designs and Trade Marks to the Patents Court under the Patents Act 1977 (c. 37), if the person is a solicitor of the Court of Judicature of Northern Ireland.

(10)          For the purposes of this paragraph—

• “family proceedings” has the same meaning as in the Matrimonial and Family Proceedings Act 1984 (c. 42) and also includes any proceedings in the family court and any other proceedings which are family proceedings for the purposes of the Children Act 1989 (c. 41);
• “reserved family proceedings” means such category of family proceedings as the Lord Chancellor may, after consulting the President of the Law Society and with the concurrence of the President of the Family Division, by order prescribe;

and any order made under section 27(9) of the Courts and Legal Services Act 1990 (c. 41) before the day appointed for the coming into force of this paragraph is to have effect on and after that day as if it were an order made under this sub-paragraph.”

General rule – hearing to be in public

39.2

(1)        The general rule is that a hearing is to be in public. A hearing may not be held in private,                         irrespective of the parties’ consent, unless and to the extent that the court decides that it   must be held in private, applying the provisions of paragraph (3).

(2)        In deciding whether to hold a hearing in private, the court must consider any duty to protect      or have regard to a right to freedom of expression which may be affected.

(2A)      The court shall take reasonable steps to ensure that all hearings are of an open and public          character, save when a hearing is held in private.

(3)        A hearing, or any part of it, must be held in private if, and only to the extent that, the court is     satisfied of one or more of the matters set out in sub-paragraphs (a) to (g) and that it is          necessary to sit in private to secure the proper administration of justice –

            (a)        publicity would defeat the object of the hearing;

            (b)        it involves matters relating to national security;

            (c)        it involves confidential information (including information relating to personal                            financial matters) and publicity would damage that confidentiality;

            (d)        a private hearing is necessary to protect the interests of any child or protected party;

            (e)        it is a hearing of an application made without notice and it would be unjust to any                      respondent for there to be a public hearing;

            (f)         it involves uncontentious matters arising in the administration of trusts or in the                        administration of a deceased person’s estate; or

            (g)        the court for any other reason considers this to be necessary to secure the proper                      administration of justice.

4)         The court must order that the identity of any person shall not be disclosed if, and only if, it         considers non-disclosure necessary to secure the proper administration of justice and in order      to protect the interests of that person. (5)        Unless and to the extent that the court otherwise directs, where the court acts under     paragraph (3) or (4), a copy of the court’s order shall be published on the website of the             Judiciary of England and Wales (which may be found at www.judiciary.uk). Any person who is     not a party to the proceedings may apply to attend the hearing and make submissions, or apply to set aside or vary the order.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

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As controversy builds concerning the attempts by regulators such as the Financial Conduct Authority and the Solicitors Regulation Authority to stop the public using the services of professionals, it is worth looking at some comments by people perfectly able to claim compensation themselves without using lawyers, but nevertheless who chose to use lawyers.

John Hyde, News Editor of the Law Society Gazette, writing in that journal on 17 September 2025 explained why he went through a claims firm to get money back in relation to a delayed flight, paying 25% of the compensation to the claim firm.

“Of course I knew I could do it do it myself, but frankly I didn’t want to. The prospect of haggling with airlines, checking if I was being short-changed and filling out the paperwork didn’t appeal, so I let the lawyers do the work, knowing full well they would pocket some of my money. It was in the account within weeks.”

Why should the public trust regulators to have fair schemes when the scandals being compensated for were the fault of those regulators in the first place?

The Financial Conduct Authority is spending £1 million to push the public away from lawyers and to use their own scheme, which does not yet exist.

John Hyde again:

“So is it the role of a regulator to effectively urge consumers not to seek legal advice? The FCA [Financial Conduct Authority] exists to protect consumer interests, not to curtail the free market. This is a curiously legal issue: no regulator is telling consumers they don’t need accountants, or mechanics, or surgeons, for example.”

It is of course those very same lawyers who exposed these scandals in the first place, often risking a huge amount of their own money and time to do so.

Therein lies the rub.

It is in the interests of regulators to crush lawyers and put them out of business as it is lawyers who expose the scandals, inefficiencies, and unacceptable conduct of the regulators, who are now widely believed to be out of control, except by the Government that inflicted them and the Ombuds people on the world in the first place through the disastrous Legal Services Act 2007.

That Act is now being seen for what it is in the chaos surrounding the conduct of litigation issues.

The equally disastrous Ministry of Justice portal for low-value whiplash claims was designed by insurance companies to slash payouts and to encourage injured people to rely on the other side’s insurers rather than on their own lawyers.

91% of injured people have ignored that advice and still lawyers, that is exactly the same percentage as before the introduction of the portals and the same as in the Republic of Ireland when that country introduced a similar system.

It is the equivalent of a criminal being found guilty by the court but then being told to decide what his or her sentence should be.

Why not have a Restaurants Conduct Authority forcing restaurants to state on the menu how much it would cost the customer to buy the ingredients and cook the meal themselves?

Of course, the whole point is that the patron of the restaurant is paying to have the meal cooked without hassle, and better than they can do it themselves, and that is also why people go to lawyers, but for the legal advice not the meal!

Will the Pub Regulation Authority be obliged to tell customers:

“This wine, for which we are charging £12 a glass, is available in the local supermarket at £9  a bottle, so you are paying us £36 for something you can get for £9.

Also, they will deliver it to you free, so you don’t have the trouble of driving here.”

At one level, it looks like an extreme nanny-state, but that is not the agenda.

The agenda is to crush independent law firms so that the current highly controversial restrictions on free speech – making free speech a terrorist offence in many cases – arresting people at airports for Tweets, stopping former Members of Parliament, at airports etc. will not have maverick and independent lawyers to oppose them.

This is almost line by line Germany in the 1920s, not the 1930s, which obviously came later.

Do not think that it cannot happen here. Reform is not the worst of the potential worries that small ell liberal Britain has. As the recent march in London demonstrated.

321.         First, a theme of the reasons advanced for freezing Mr Shvidler’s assets is that he should be sanctioned, not for anything that he was doing or threatening to do at the time of his designation, but for past associations and activities which were lawful and not contrary to any prohibition at the time when they occurred. I would not dismiss the possibility that penalising a person for past behaviour which was blameless when it occurred could influence the future conduct of others. A notorious historical example is the execution of Admiral Byng in 1757 for failing in his attempts to relieve Minorca – a killing carried out, in the well-known words of Voltaire, “pour encourager les autres”. But in any such case encouragement of others is achieved by treating the individual in a way which is inherently unjust. A court should be slow to accept that penalising an innocent individual to incentivise others is a legitimate means of pursuing a policy aim, however important that aim is thought to be.

322.         Second, the argument that it is reasonable to sanction Mr Shvidler to encourage him to speak out “more robustly” in opposition to Russia’s invasion of Ukraine has sinister connotations. It implies that it is legitimate in a democracy for the executive to freeze a person’s assets in order to put pressure on that person to speak out in support of government policy. Such an Orwellian approach should be rejected. It seeks to justify interference with property rights on the ground that such interference can be used to interfere with freedom of expression.

323.         Third, the fact that Mr Shvidler has been subjected to more severe sanctions solely because of being a British citizen is unjust. I can imagine circumstances in which that would not be so – for example, if Mr Shvidler had acted in a way that was disloyal towards the United Kingdom. But no such suggestion is made. If all the facts had been exactly the same except that Mr Shvidler was not a British citizen but, say, a Russian citizen with the right to reside in the United Kingdom, only his assets in this country would have been frozen and not his foreign assets. Such an approach is compatible with international law because nationality (along with residence) is generally recognised as a basis of jurisdiction over extra-territorial acts and therefore allows the United Kingdom to impose restrictions and criminal penalties on conduct of a UK national outside the United Kingdom. But the question here is not whether the imposition of a more far-reaching invasion of liberty is permissible under international law but whether it is fair. In my opinion it is unfair and arbitrary to impose sanctions on Mr Shvidler which apply  worldwide, not because of any assessment that such extra-territorial reach is necessary, but simply as an automatic consequence of his British citizenship.

324.         I have identified at paras 292-297 above the devastating effect on Mr Shvidler and his family of depriving him, indefinitely, of access to his own funds and other economic resources on a worldwide basis except to such minimal extent as the government allows. Like the asset-freezing measures     considered in the case of Ahmed, the restrictions imposed on Mr Shvidler strike at the very heart of his right to live his own life as he chooses. I do not consider that the reasons relied on by the government  come close to justifying such a drastic curtailment of his liberty. The restrictions are unjust and       disproportionate to any contribution which they would rationally be expected to make to the purposes    of the Regulations. Although I am alone in doing so, I deprecate and would declare unlawful the removal of basic freedoms to which Mr Shvidler should be entitled as a citizen of this country. I would allow his appeal.

292.         Unlike such freezing orders, an asset-freeze imposed under the Regulations is not justified by any claim to recover funds held by the individual whose assets are frozen; nor is it subject to any comparable constraints. It is imposed to pursue political aims. For a Russian or other foreign national who has some assets in the UK which are frozen, the impact on legal rights is likely to be comparatively modest. For a UK national whose entire assets are frozen, however, the likely impact is greater by an order of magnitude. A particularly oppressive feature of the regime is the open-ended nature of the measure. As well as having no geographical limit, the asset-freeze applies for as long as the government thinks fit or until it considers that the purposes of the Regulations have been achieved. It is one thing to   prohibit an individual from using or dealing with any of his or her own economic resources on a temporary basis for a defined period. It is quite another to do so for a period that has no end in sight.   And the longer the prohibition remains in place with no end in sight, the more oppressive it becomes.

293.         Under section 24 of SAMLA as originally enacted, there was a duty on the appropriate minister to review a designation which imposes an asset-freeze after three years. But on 15 March 2022 (the     week before Mr Shvidler was designated) that provision was repealed. After an initial ministerial   review, the only right to request a variation or revocation of the designation arises where “there is a           significant matter which has not previously been considered by the Minister”: see section 23(2).

297.         Inevitably, it is not only Mr Shvidler himself on whom the freezing of all his funds and economic      resources has had a catastrophic impact. His family has also been severely affected. Like him, his    former wife and three adult children have had banking services withdrawn from them. As a direct    result of Mr Shvidler’s designation, his two youngest children were permanently excluded from their schools with immediate effect, leaving them without education in the middle of a school year. They have since had to continue their education in the United States, where Mr Shvidler is now living though still subject to the same prohibitions on dealing with his assets because of their worldwide scope).

302.         There is also a risk that the Regulations may be used to impose sanctions on individuals, not because there is any realistic prospect that the measures imposed will actually contribute to achieving the desired international aim, but for the purpose of signalling to a popular audience that the government is taking firm action to curb Russian aggression. Such a purpose is not a legitimate basis for curtailing individual freedom. That this risk is real is apparent from the political messaging that accompanied the announcement of the sanctions imposed on Mr Shvidler (see para 264 above).

316. It was only in February 2022, therefore, that the government adopted a policy that individuals and   companies should no longer carry on business in the Russian extractives sector and other specified sectors of the Russian economy. In these circumstances I do not see how any criticism can reasonably   be made of Mr Shvidler (or for that matter the other non-executive directors of Evraz plc, such as the King’s former principal private secretary, Sir Michael Peat) for working as directors of Evraz plc after       the annexation of Crimea in 2014. No one could rationally have thought that by doing so they had                  conferred legitimacy on Russia’s invasion of Ukraine.

Key quote

The function of rights is to set limits to the circumstances in which the interests of individuals may be overridden by the interests of the community at large. Depriving a person of their liberty, or the use of their property or their freedom of expression, for example, is not justified by showing that the benefits to the community of doing so substantially exceed the cost to the individual of the restriction in terms of money or utility (which may be comparatively slight).

279.         Such a cost-benefit analysis may be possible and appropriate when assessing what is in the overall                 interests of the community. But there is no common metric by which expected benefits to the    community can be weighed against a wrong done to an individual such that, the greater the public                 benefit, the greater the wrong that may justifiably be done. Such weighing is antithetical to the very    idea of rights. The function of rights is to set limits to the circumstances in which the interests of                   individuals may be overridden by the interests of the community at large. Depriving a person of their             liberty, or the use of their property, or their freedom of expression, for example, is not justified by     showing that the benefits to the community of doing so substantially exceed the cost to the individual           of the restriction measured in terms of money or utility (which may be comparatively slight).

10. The proper approach to proportionality

280.         What is required in deciding whether an interference with a fundamental right or freedom is           proportionate is a judgment about whether the interference is just, having regard to its impact on the   individual’s rights and the nature and strength of the reasons relied on to justify it. That is a judgment          which under the division of responsibilities in the UK constitution is allocated to the courts.

281.         As it was put by Lord Hoffmann in R (Prolife Alliance) v British Broadcasting Corporation [2003] UKHL            23; [2004] 1 AC 185, para 76:

                  “The courts are the independent branch of government and the legislature and executive are, directly           and indirectly respectively, the elected branches of government. Independence makes the courts more     suited to deciding some kinds of questions and being elected makes the legislature or executive more            suited to deciding others.”

282.         Being answerable to an elected legislature makes ministers suited to formulating policy and deciding            whether a particular policy or a measure designed to implement it is in the interests of the community          as a whole. But when it comes to deciding whether, when a conflict arises, those community interests           should prevail over a fundamental right or freedom of a particular individual, it is rightly recognised that                 courts are better suited to deciding the question. There are at least four reasons why.

283.         First, a court is independent of, and impartial towards, the parties to the dispute. The minister is not,             since the minister is one of the parties. Second, ministers as politicians, and officials acting under their     direction, are naturally and rightly concerned to promote the collective interest. That very fact makes            them unsuited to determine whether the collective interest should prevail over a fundamental right of          an individual. To make that judgment, an impartial arbiter is needed which is independent of the elected                  branches of government and from the political pressures and passions to which those branches are                necessarily responsive.

284.         Third, alongside their independence, courts have a distinctive competence in resolving disputes by                  applying demanding standards of public reason to adjudicate between competing arguments. They also                   reach decisions through a highly regulated and public process specifically designed to ensure fairness as                   between the parties and that the competing arguments are carefully and impartially evaluated.

285.         Fourth, courts are entrusted with a responsibility deeply rooted in British history which has led them to         be relied on to protect the liberties of individuals. The courts are custodians of fundamental values that    insist that we live in a free country, that political power must not be used arbitrarily and that the most          basic interests of individuals, whoever they may be, must not be sacrificed for the benefit of the majority.   The courts have not always lived up that responsibility. It often seems to be overlooked, for example,           that the famous speech of Lord Atkin in Liversidge v Anderson [1942] AC 206, celebrated for defending         the right of individual against the executive even in wartime, was a dissent. But examples can be found    of cases, such as A and others v Secretary of State for the Home Department [2004] UKHL 56; [2005] 2          AC 68 (often referred to as “the Belmarsh case”), where the courts have been effective in performing   this role.

286.         For these reasons I reject the suggestion that the executive is best suited to judge whether it has itself           struck a “fair balance” in an individual case between the public interest and a fundamental right or     freedom of an individual. In a society committed to the rule of law, judgments about whether          encroaching on a fundamental right or freedom is justified by the reasons relied on by the executive for                 doing so are reserved to independent courts. I consider that judges are abdicating their responsibility if     in making these judgments they defer to the executive’s own view that it has struck a “fair balance”.

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The use, or rather misuse of so called artificial intelligence, more accurately described as Artificial Idiocy, by lawyers is becoming increasingly bizarre.

In

MS v Secretary of State for the Home Department (Professional Conduct: AI Generated Documents) Bangladesh [2025] UKUT 305

the Upper Tribunal of the Immigration and Asylum Chamber, presided over by a High Court Judge, referred the barrister to the Bar Standards Council for citing false cases, but accepted that he had not knowingly and deliberately placed false material before the tribunal with the intention that the tribunal treats it as genuine.

In those circumstances, the tribunal found that it would be inappropriate to refer the matter to the police or to commence contempt proceedings, but both courses of action would be appropriate where such conduct is deliberate and knowingly fraudulent.

The tribunal said:

“We find that it is likely that Mr Rahman did not understand the limitations of large language models such as ChatGPT until he read Ayinde and attended his recent professional training on the issue, but this is clearly not an excuse. The BSB [Bar Standards Board] issued guidance on AI and ChatGPT in October 2023 which identified the danger that it could produce misinformation including fabricated judgments complete with false citations, as is set out at paragraph 14 of Ayinde.”

The tribunal published a summary before the main judgment:

“1.        AI large language models such as ChatGPT can produce misinformation including fabricated judgments complete with false citations.

2.          The Divisional Court has provided guidance in the case of R (Ayinde) v London Borough of Haringey, Al-Haroun v Qatar National Bank QPSC [2025] EWHC 1383 (Admin) that the consequence of using AI large language models in a way which results in false authorities being cited is likely to be referral to a professional regulator, such as the BSB or SRA,  as it is a lawyer’s professional responsibility to ensure that checks on the accuracy of citation of authority or quotations are carried out using reputable sources of legal information. Where there is evidence of the deliberate placing of false material before the Court police investigation or contempt proceedings may also be appropriate.

3.          Taking unprofessional short-cuts which will very likely mislead the Tribunal is never excusable.”

Paragraph 1 of the main judgment reads:

“1.        The Upper Tribunal has an inherent jurisdiction to govern its own procedure and part of that jurisdiction mandates that we ensure that the lawyers interacting with the Upper Tribunal conduct themselves according to proper professional standards. The Upper Tribunal cannot afford to have its limited resources absorbed by representatives who place false information before the Tribunal. Further, time spent on applications containing false legal information also risks a loss of public confidence in the processes of the Upper Tribunal. We are also aware that the immigration client group can be particularly vulnerable. We emphasise that the primary duty of solicitors and barristers is to the Court and Upper Tribunal, and to the cause of truth and justice.”

The facts of the case are well worth reading to see how convincing and persuasive these hallucinatory authorities and references can be, and what a threat artificial intelligence is, as the court here observed, to the cause of truth and justice.

The tribunal said that reputable search engines such as, West Law, EIN or Bailii or Lexis Nexis should always be used.

“14.      We therefore find that Mr Rahman has misused artificial intelligence and attempted to mislead the Tribunal contrary to the obligations as set out in the BSB regulatory framework which require him to observe his duty to the Court, to act with honesty and integrity, not to behave in a way which diminishes trust and confidence in the profession, and to provide a competent standard of work to clients.”

Comment

The barrister said that he was unwell and under time pressure and so resorted to artificial intelligence.

It would be incorrect to say that solicitors and their staff are not, and will not, be subject to such pressures and temptations, especially given the extreme hard line being taken by the courts, the Solicitors Regulation Authority and the Legal Ombudsman against lawyers for the slightest delay, even if ill.

Small firms are being driven out of practice– closing at an alarming rate – due to these pressures.

Over the last couple of years, I have changed my advice to youngsters from strongly encouraging them to become lawyers to warning them not to touch it with a bargepole.

Very many senior lawyers feel the same way.

The only sensible course of action is for all law firms to ban the use of ChatGPT and similar models and make it clear that their use is gross misconduct warranting summary dismissal.

259.      Mr Shvidler has been designated by name under regulation 5(1)(a) for the purposes of regulations 11 to 15. Regulation 11(1) prohibits him or anyone else from “dealing with” any of the “funds” and “economic resources” which he owns, holds or controls. The term “funds” is defined in the legislation to mean “financial assets and benefits of every kind” and “economic resources” comprise “assets of every kind, whether tangible or intangible, movable or immovable, which are not funds but can be used to obtain funds, goods or services”: see section 60 of SAMLA. The term “dealing with” is also about as broadly defined, in regulation 11(4) and (5), as it is possible to imagine. Anyone who contravenes the prohibition on such dealing commits a criminal offence: see regulation 11(3). In addition, third parties are prohibited from making funds or economic resources available to the designated person (whether directly or indirectly) and from making funds or economic resources available to anyone else for that person’s benefit (such as by discharging a financial obligation for which the designated person is responsible). Anyone who contravenes any of these prohibitions also commits a criminal offence: see regulations 12 to 15.

260.      It might be expected that, if any distinction based on nationality were drawn, a British citizen would have greater protection under the Regulations from interference with his property than a Russian national. Far from it. Had Mr Shvidler not been a British citizen, the asset-freeze would at least have been limited to his assets situated in the United Kingdom. But in the case of a “United Kingdom person” (defined to include a British citizen and certain others such as a British Overseas Territories citizen), the prohibitions described above may, and do, apply to conduct outside the United Kingdom: see regulation 3 and section 21 of SAMLA. The freezing of Mr Shvidler’s assets is accordingly not limited to his UK assets but applies to all funds and economic resources in which he has an interest, anywhere in the world.

261.      This asset-freeze has built into it some very narrow exceptions – for example, to permit payments which the designated person is under a legal obligation to make to public authorities such as HMRC: see regulation 58A. Otherwise it is a criminal offence for the designated person to use any of his or her own funds or economic resources for any purpose whatever (including even to buy food) without a licence from the Treasury. Even then, the purposes for which the Treasury may issue such a licence – if they “consider that it is appropriate” to do so – are extremely limited. Those purposes are limited by regulation 64(2) and Schedule 5 of the Regulations largely to meeting basic needs of the designated person and any dependent family member (such as medical needs and needs for food, rent or mortgage payments and utility payments) and paying reasonable legal fees and expenses. A licence may also be issued – again, only if the Treasury “consider that it is appropriate”- to enable “an extraordinary expense of a designated person to be met” or “anything to be done to deal with an extraordinary situation”: see Schedule 5, paras 5 and 7.

262.      The licensing system thus puts in the control and discretion of the government the ability of the designated person to use their own resources even to meet needs essential for survival. 7. The basis for designating Mr Shvidler

263.      The rationale for sanctions is readily intelligible when their aim is to exert pressure on a foreign state by damaging its economy. The rationale is also clear, although more speculative, when sanctions are targeted at members of an elite who have economic power and political influence within the foreign country. It is far from obvious, however, why it should be thought useful to target an individual such as Mr Shvidler who does not live in Russia and when no evidence has been adduced to show that he has any economic resources or any political influence there.

264.      The public explanation given for the decision to designate him by name on 24 March 2022 does not inspire confidence in the rationality of the decision-making process. In a press release issued on that day which singled out for special mention five individuals being sanctioned, the first of whom was Mr Shvidler, the Foreign Secretary (Liz Truss) said: “These oligarchs, businesses and hired thugs are complicit in the murder of innocent civilians and it is right that they pay the price.” This was followed by tweets published by the Secretary of State for Transport, Grant Shapps, on 26 March and 8 April 2022 which described Mr Shvidler as one of “Putin’s friends” and “Putin’s cronies”, as “benefitting from Russia’s illegal action” in invading Ukraine, and as “not welcome here”.

265.      These aspersions were all baseless. According to Mr Shvidler’s uncontradicted evidence, he has no involvement in Russian politics and no relationship with President Putin. He is not an oligarch. He has not benefited from, let alone been complicit in, the invasion of Ukraine. To describe Mr Shvidler as “not welcome here” is repugnant when he is a British citizen (as are his five children) of unblemished character.

266.      Though born in the Soviet Union, Mr Shvidler emigrated at age 24, renouncing his Soviet citizenship to do so, and entered the United States as a stateless refugee. He became a US citizen before later moving with his family to the United Kingdom in 2004 under the Highly Skilled Migrants Programme. He was naturalised as a British citizen in 2010. He is a very wealthy and successful businessman who has donated some £10 million to educational charities in the UK. Mr Shvidler has never lived in, nor been a citizen of, the Russian Federation and has not even visited Russia since 2007.

267.      The formal statement of reasons given for Mr Shvidler’s designation contained several inaccuracies. It was subsequently revised, but not revoked, in November 2022 after Mr Shvidler requested a ministerial review of his designation. The revised grounds relied on for designating Mr Shvidler are that he: (1) is associated with a person, Roman Abramovich, who is involved in obtaining a benefit from or supporting the Government of Russia; and (2) has been involved in obtaining a benefit from or supporting the Government of Russia by working as a non-executive director of Evraz plc, an entity carrying on business in a sector of strategic significance to the Government of Russia, namely, the Russian extractives sector.

This first appeared in my Newsletter Kerry on Costs, Regulation, Legal Systems and so much more.

Subscriptions are £250 + VAT for 2026, which is over 100 issues.

If you want the subscription to start now and run until 31 December 2026 it is £300 + VAT.

Contracts between businesses are not subject to the Unfair Contract Terms Act so a provision allowing one party unilaterally to increase fees is not protected if it is a firm of solicitors on the receiving end of that increase, even if it is during the currency of the contract.

We had a contract with Review Solicitors from April 2024 to April 2025, although we had been with them for some years.

During the currency of the contract, Review Solicitors gave notice of an increase during the currency of the contract which had the effect of increasing the cost from El,076.40 a quarter to f 1,616.50, that is an increase of 50.18% with the new annual fee on renewal being E6,465.60, up from E4,305.60.

All figures include VAT.

There is no power to cancel mid-contract.

We did of course cancel as soon as we could, and I would never consider contracting with Review Solicitors again.

I am not suggesting that they have broken any law or broken any contract or in any form acted unlawfully.

You could, with justification, state that this was my own stupid fault by not reading the contract carefully enough, but we had worked with Review Solicitors for some years, and there had never been a price increase even on an annual basis, let alone midway through the contract.

Cobblers’ shoes and all that; or a solicitor who acts for her/himself has a fool for a client.

It is a matter for you and obviously you must not break the contract, but you can consider carefully whether you wish to renew your contract. I wonder how the Solicitors Regulation Authority or the Ombudsman would react if a firm of solicitors did this.

Lord Leggatt deals with the separation of powers at Paragraph 255 and 256 set out below.

The key point is that in disagreement with the majority of the Supreme Court, he says:

“But what I believe to be missing from this account is adequate recognition of the role which, under our constitution, the courts are called on to play in protecting individual liberties.”

255.       Underlying my disagreement with the majority of the court is a difference of view           about the separation of powers. In their judgment, at paras 126-130, Lord Sales        and Lady Rose argue that the executive branch of government should be accorded      a “wide margin of appreciation” (ie latitude) in making decisions about the            imposition of sanctions on individuals because of the constitutional responsibility of the executive for the conduct of foreign affairs and its “superior institutional                 competence” in this field. I agree with the need to recognise and respect the           separate roles and competences of different organs of the state. I also agree that          the courts should recognise and respect the particular constitutional             responsibility and institutional competence of the executive in the field of foreign                  policy. But what I believe to be missing from this account is adequate recognition         of the role which, under our constitution, the courts are called on to play in       protecting individual liberties.

256.       If that protection is to be meaningful, giving a “wide margin of appreciation” to the        views of ministers and government officials cannot be taken too far. The courts are          failing in their duty if they simply rubber-stamp assertions made by the executive           to justify invading individual liberties without subjecting those assertions to            critical scrutiny. At para 130 of their judgment Lord Sales and Lady Rose suggest that the executive should be accorded a “wide margin of appreciation” on the                   ground of having greater institutional competence than the courts to judge             whether its own decision to restrict the liberty of an individual strikes a “fair       balance” between the rights of that individual and the interests of the community. With that view, I profoundly disagree. I will return to this point and state my reasons               for disagreeing when I discuss below the proper approach to be adopted by a court     in assessing proportionality.

Below are details of a series of seven Zoominars, all at 4.00pm and all lasting one hour.

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The cost of these 7 new and the 8 already delivered this year is £750 plus VAT. 

As many people as you want from your organization can attend within that price.

Thursday, 18 September 2025		Earthquake High Court Decision: Only Solicitors Can Conduct Litigation
Tuesday, 30 September 2025		Non-Party Costs Orders, including Wasted Costs Orders
Thursday, 2 October 2025		Solicitors Act 1974 Client Challenges. Ombudsman Complaints
Tuesday, 7 October 2025		Death of Client: Right to Bring or continue proceedings: The Retainer.
Thursday, 9 October 2025		Contingency Fee Agreements, Conditional Fee Agreements & Damages-Based Agreements.
Tuesday, 14 October 2025		Minors, those lacking capacity and Vulnerable Parties, Protected People and Witnesses
Thursday, 23 October 2025		Case Update and looking ahead

For more information and to book please click here.

In my blog piece –

BRITISH CITIZENS AND RUSSIA: TWO CHILLING AUTHORITARIAN SUPREME COURT DECISIONS

I set out the whole of Lord Leggatt’s dissenting Judgment.

In a series of blogs, I am now going to look at different parts of that dissenting Judgment.

Here, I set out the key parts of Lord Leggatt’s introduction to his dissenting Judgment and his overall conclusion on the appeal.

In Paragraph 245, Lord Leggatt states that when sanctions are imposed on the individuals, sensitive issues can arise about how far the Government may lawfully go in curtailing individual liberties in pursuit of its foreign policy and that in our democracy, these are issues for the courts to decide.

245.       The use of sanctions has become for the United Kingdom, as for many other

                  countries, a key instrument of foreign policy. By the Sanctions and Anti-Money

                  Laundering Act 2018 (“SAMLA”), and regulations made under that Act, Parliament        has authorised the imposition of sanctions on countries, organisations and                 individuals. Their basic aim is to exert economic pressure on a foreign government      to desist from actions which are regarded as contrary to the values and interests            of the United Kingdom or to international law. That aim is undoubtedly legitimate.           Yet when sanctions are imposed on individuals, sensitive issues can arise about            how far the government may lawfully go in curtailing individual liberties in pursuit                  of its foreign policy. In our democracy these are issues for the courts to decide.

At Paragraphs 246 to 248, Lord Leggatt sets out the facts pointing out that Mr Eugene Shvidler is a British citizen who had lived in England for many years before he was designated on 24 March 2022 and that he is not, and has not, been accused of any crime or unlawful act and nor is it suggested that he has any links with the Russian regime.

He has never voiced support for President Putin, and on 12 March 2022, before designation, had a statement published in The Guardian Newspaper that he was hoping and praying for an end to the “senseless violence” in Ukraine and for “the war” to be brought to an immediate end.

246.       Such issues are raised on these appeals. They are raised in acute form in the case

                  of Mr Eugene Shvidler. For more than three years all his assets have been frozen

                  following his “designation” by a minister under The Russia (Sanctions) (EU Exit)

                  Regulations 2019 (SI 2019/855), as amended in February 2022 (“the       Regulations”). Unlike most individuals designated by name under these     Regulations, Mr Shvidler is not a Russian citizen and does not live or carry on   business in Russia. He is a British citizen who had lived in England for many years                  before he was designated on 24 March 2022. He is not accused of any crime or               unlawful act. It is not suggested that he himself has links with the Russian regime.             He has never voiced support for President Putin, let alone for the invasion of                 Ukraine which began on 24 February 2022. Indeed, on 12 March 2022 he had made    a statement published in The Guardian newspaper that he was hoping and praying          for an end to the “senseless violence” in Ukraine and for “the war” to be brought

                  to an immediate end.

247.       The basis on which Mr Shvidler’s assets have been frozen is twofold: first, that he

                  is “associated with” a person, Mr Roman Abramovich, who is or has been involved       in obtaining a benefit from or supporting the government of Russia; and second that, until shortly before his designation, Mr Shvidler was a non-executive director        of Evraz plc, a mining company listed on the London Stock Exchange which       operates through subsidiaries in Russia as well as in the United States, Ukraine,               Canada and the Czech Republic. These tenuous connections to the Russian    government are said on behalf of the Foreign Secretary to justify depriving Mr         Shvidler, indefinitely, of his right to deal with any of his own funds and other       “economic resources”, wherever in the world they are located.

248.       The legislation contains what should be an important safeguard. Under section 38

                  of SAMLA, a person designated for the purposes of sanctions has a right to apply           to the High Court for a review of the minister’s decision. On such an application it                   is for the court to decide whether the designation is lawful, including – where the           legality of the designation depends on it – whether interference with one or more                   fundamental rights of the designated person is justified in the public interest.

At Paragraphs 249 to 252, he sets out the correct approach to these appeals.

At Paragraph 254 he sets out his reason for writing the dissenting Judgment describing this as a serious invasion of liberty and the Government’s reasons as “flimsy” concluding:

My wider concern is that, if the courts are not prepared to protect fundamental individual freedoms even in a case like this, the right to a judicial review of the minister’s decision to curtail such freedoms under sanctions regulations is of little worth.

254.       My reason for writing this separate judgment is to explain why, in the case of Mr

                  Shvidler, I disagree with the conclusion reached by the other members of the court. Making it a criminal offence for an individual who has done nothing unlawful          to deal with any of his own assets without the government’s permission, and    imposing this sanction without any geographical or temporal limit, is a serious    invasion of liberty. The court on an application for judicial review of such a                   measure should require cogent reasons to justify it. In my view, the flimsy reasons        relied on by the government in this case do not begin to do so. My wider concern      is that, if the courts are not prepared to protect fundamental individual freedoms          even in a case like this, the right to a judicial review of the minister’s decision to        curtail such freedoms under sanctions regulations is of little worth.