Mazur ruling risks leaving clients vulnerable, as the consumer panel criticises regulatory failures
The implications for consumers are being largely overlooked in the aftermath of the Mazur ruling, according to the chair of the Legal Services Consumer Panel, Tom Hayhoe.
Hayhoe said that clients whose cases had been handled by unauthorised staff in law firms are now at risk of being treated as “collateral damage” in the wider debate about regulation and its impact on the legal profession. He stated that the judgment is not just a professional embarrassment for regulators and law firms but could also be another scandal for consumers.
In the Mazur case, Mr Justice Sheldon highlighted that the Legal Services Act prohibits unauthorised individuals from conducting litigation, even under supervision within a law firm. This ruling has caused significant concern for consumers, particularly those who may have had their cases managed by unauthorised staff over the past decade. Hayhoe pointed out that many clients were under the impression that their litigation was being handled by authorised professionals, only to find out that key steps may have been taken by individuals who had no legal right to act.
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“Consumers are not collateral damage in a professional turf war. They are the ones who paid for services under the assumption of lawful practice and relied on regulators to ensure compliance,” said Hayhoe in a blog post today.
The Legal Services Consumer Panel has expressed particular concern about the possibility of past judgments being reopened or challenged, potentially leaving clients whose disputes they thought were resolved facing renewed uncertainty. There are also worries that insurers may question whether claims were handled correctly.
Hayhoe was highly critical of professional bodies and regulators, accusing them of failing to properly represent consumers. He noted that the Chartered Institute of Legal Executives (CILEX) had given its members a “false sense of security” by assuring them that they could conduct litigation before the Mazur ruling. The Solicitors Regulation Authority (SRA), which intervened in the case, was also forced to admit that its advice to employees regarding conducting reserved activities was incorrect.
The chair of the Legal Services Consumer Panel also questioned the role of the Legal Services Board (LSB), pointing out that it was either unaware of a significant flaw in the regulatory system or chose not to act on it.
Hayhoe argued that the Mazur ruling exposes a “deeper malaise” in the regulatory framework, calling for a full-scale review of the current system. “The regulators and representative bodies concerned have sown confusion, issued contradictory views, and arguably failed to protect consumers,” he said. “Mazur is a consequence of a regulatory framework that has lost its way.”