SRA warns firms using unauthorised staff that failure to act on Mazur may trigger enforcement
The Solicitors Regulation Authority (SRA) has issued a clear warning that it will take enforcement action against firms that ignore the implications of the Mazur judgment. The regulator said it would not hesitate to pursue organisations that continue to use unauthorised staff to conduct litigation, following the ruling handed down in September.
The Mazur judgment confirmed that litigation is a reserved activity that cannot be carried out by individuals who are not authorised. The decision has prompted widespread debate within the profession about compliance, potential breaches and the extent to which firms may have unintentionally acted outside the law.
For several years, the SRA noted, many firms have employed paralegals and unauthorised legal executives to handle litigation without fully appreciating that this breached the Legal Services Act. The regulator acknowledged that the ruling has caused “concern and confusion” about the role and status of unauthorised fee earners, prompting calls for clarity across the sector.
Embed from Getty Images
In guidance published last week, the SRA advised that firms which believe they may have acted incorrectly are able to self-report. It emphasised that each case would be assessed individually and that genuine mistakes will be treated “sympathetically”. However, the regulator made equally clear that sympathy would not extend to firms that fail to adjust their working practices in light of Mazur and continue to risk breaching the law.
The SRA stated: “If you are conducting a reserved activity without authorisation and have not addressed the implications of the judgment and our guidance, you can expect us to use all appropriate investigative and enforcement powers to identify and address this misconduct.”
The guidance also addresses calls from parts of the profession for a safe harbour for firms that did not realise they were acting unlawfully. The regulator has resisted those requests, reinforcing that the responsibility to comply with regulatory obligations sits with firms themselves.
Meanwhile, the judgment is already reshaping the legal costs landscape. A poll carried out by the Association of Costs Lawyers found that the majority of its members anticipate increased demand for authorised costs lawyers in the wake of the ruling. Three-quarters of those surveyed said Mazur would lead to greater reliance on authorised practitioners rather than costs draftspeople.
Costs lawyers also expect to see more challenges to solicitors’ bills, particularly where there is insufficient evidence of supervision. According to the survey, 71% of respondents believe such challenges will rise as parties scrutinise compliance more closely.
The Chartered Institute of Legal Executives (CILEX) has secured permission to appeal the Mazur ruling. The organisation said the decision has had a “significant impact” on its members and on law firms across the sector. Its challenge now moves to the Court of Appeal, where the issues raised by Mazur are expected to receive further examination.
The SRA’s latest update signals that firms cannot rely on uncertainty as a defensive shield. With enforcement action now firmly on the table, the regulator has underlined the need for firms to assess their business models and ensure they are fully compliant with the law.