KA-2025-000012 - [2025] EWHC 2341 (KB)

The background to this matter is that the Respondent, a law firm, carried out some legal work for the Appellants. The Respondent’s fee of £54, 263.50 was not paid and another law firm, Goldsmith Bowers Solicitors (“GBS”), was instructed to recover the debt. A claim was issued by GBS, in response to which the Appellants put in a Defence and Counterclaim. The Claim Form was signed by GBS and the Particulars of Claim by Peter Middleton “Head of Commercial Litigation” at GBS.

The Appellants took issue with the fact that Mr Middleton, the person who they believed was conducting the litigation against them, did not hold a current practising certificate. The Appellants made an application for directions, including an order directing the Respondent to replace Mr Middleton with a qualified solicitor. The application was opposed by the Respondent.

Acting on his own motion, Deputy District Judge Campbell ordered a stay of the proceedings. He considered that there was evidence that Mr Middleton was taking part in “reserved activity” within the meaning of the Legal Services Act 2007 (“the LSA”), in that he appeared to be conducting litigation against the Appellants. Among other things, Deputy District Judge Campbell stated that “There is no indication that anyone else at Goldsmith Bowers is in any way involved” in the litigation. Deputy District Judge Campbell made an order that any application to lift the stay had to be supported by a statement from a partner giving a full explanation of the position. If no application was sought within 3 months, the claim would automatically be struck out.

An application was made by the Respondent to lift the stay. This came before His Honour Judge Simpkiss. The initial hearing of the application was adjourned, and further submissions were made on 17 December 2024. In the meantime, on 2 October 2024, Mr Middleton’s involvement with the proceedings came to an end and he was replaced by Lisa Adkin, a qualified solicitor with a practising certificate. On 18 November 2024, Mr Robert Ashall, a director at GBS, made a self-report to the Solicitors Regulatory Authority (“the SRA”) in connection with Mr Middleton’s employment and the conditions attached thereto. On 2 December 2024, the SRA decided not to investigate GBS/Mr Middleton.

At the hearing before His Honour Judge Simpkiss, the Respondent was represented by Mr Higgins of Counsel, and Mr Bennett, a Solicitor-Advocate. Mr Bennett submitted that Mr Middleton was entitled to perform the work that he had done on the case. He contended that Mr Middleton was deemed to be an authorised person to conduct litigation as a result of section 21(3)(b) of the LSA, being an employee of GBS which was “a regulated body being duly authorised”. Mr Bennett argued that this was supported by what the SRA had said in the letter of 2 December 2024:

“[GBS’] employees are permitted to undertake reserved legal activities due to section 21(3). We are satisfied that Mr Middleton has not conducted reserved legal activity without entitlement to do so”.

Mr Stuart made submissions on behalf of the Appellants. He contended that the SRA’s letter had wrongly construed section 21(3) of the LSA. An employee of an authorised person was not entitled to carry out reserved legal activities (including the conduct of litigation) unless they were also authorised. Section 21 of the LSA dealt with the remit of regulation; subsection 3(b) simply defined the persons who can be regulated by the SRA but it did not give them the entitlement to conduct litigation.

His Honour Judge Simpkiss was referred by the parties to a witness statement from Mr Ashall. In this statement, Mr Ashall accepted that Mr Middleton was “not entitled to conduct any reserved activity as defined in the [LSA]”. Mr Ashall explained that the work that had been performed by Mr Middleton in relation to the proceedings had been done “under my supervision”. The actions performed by Mr Middleton were listed as follows:

“• Received instructions from the Claimant;

• Provided initial advice;

• Drafted and sent Letter of Claim;

• Engaged in pre-action correspondence with the Defendants;

• Received instructions to issue proceedings;

• Drafted Claim Form through Goldsmith Bowers’ Money Claim Online account and submitted to Court.

• Drafted, filed and served Particulars of Claim;

• Received Notice of Issue;

• Arranged appropriate diary entries in relation to time limits;

• Received Defence and Counterclaim;

• Took further instructions in relation to Defence and Counterclaim;

• Drafted Reply and Defence to Counterclaim;

• Filed and served Reply and Defence to Counterclaim;

• Received Defendant’s first Part 18 Request, considered and advised in respect of the same;

• Received Notice of Allocation;

• Completed Directions Questionnaire;

• Drafted directions;

• Filed and served Directions Questionnaire and draft Directions;

• Received Notice of Hearing of the Defendants Application;

• Provided advice/took instructions in relation to the Defendants’ Application;

• Instructed Counsel and provided papers;

• Drafted Witness Statements Robert Ashall/Jonathan Whitehead;

• Drafted Statement of Costs;

• Arranged for filing and service of the Statement of Costs;

• Received Defendant’s Second Part 18 Request considered and advised in respect of the same.

• Drafted Reply to Defendant’s Second Part 18 Request.

• Arranged service of Reply to Second Part 18 Request.

• Internal discussions and meetings between Robert Ashall and Peter Middleton throughout”.

Mr Ashall also explained that:

“In submitting the Claim to Money Claim Online and thereby issuing proceedings Peter was supporting me in the conduct of litigation. As a firm specialising in commercial debt recovery, GBS employs a number of non-authorised fee earners, all of whom issue proceedings in support of myself and the other Authorised Persons within the business. This is the norm in commercial debt recovery”.

His Honour Judge Simpkiss decided to lift the stay. He also decided that the Respondent should file an amended Claim Form and Particulars of Claim verified with a statement of truth signed in the name of an individual at GBS who was duly authorised to do so. Further, that the claim would be allocated to the Intermediate Track, complexity band 4. (The claim had provisionally been allocated to the Intermediate Track on 1 December 2023: this was referred to in the judgment of His Honour Judge Simpkiss at paragraph 4). The Appellants were also ordered to pay the Claimant’s costs of the application to lift the stay, summarily assessed in the sum of £10,653.

In his judgment, His Honour Judge Simpkiss set out a number of provisions from the LSA: in particular, section 21(3). The learned judge also referred to a number of authorities which had dealt with similar matters: Baxter v Doble[2023] EWHC 486 and Solicitors Regulation Authority v Khan[2021] EWHC 3765 (Ch). His Honour Judge Simpkiss noted that in neither of those cases did the Courts address section 21(3) of the LSA.

The nub of His Honour Judge Simpkiss’ reasoning was set out at paragraphs 38-41:

“38.

I have decided that it is undesirable and unnecessary for me to decide whether Khan is distinguishable from Mr. Justice Fancourt’s judgment, that even where the employer is regulated by the SRA, there is at the very least a grey area as to what activities can be done by its unqualified staff.

39.

There are two reasons which it is unnecessary for me to make a decision. Firstly, it is now clear that there is no question of any breach of the LSA in the conduct of this litigation following the changes which Mr. Ashall’s sets out in his witness statement even if there was before; and, secondly the SRA has confirmed that Mr. Middleton had authority to conduct litigation under the supervision of Mr. Ashall.

40.

Following a complaint, on 2nd December 2024 the SRA handed down a decision not to investigate the conduct of Goldsmith in relation to Mr. Middleton. The relevant section of the decision reads as follows:

“Goldsmith Bowers Ltd is authorised under the Legal Services Act 2007 arrangements as it is a firm authorised and regulated by the SR[A] under the powers delegated to it under the Act. Its employees are permitted to undertake “reserved activities” due to section 21(3). We are satisfied that Mr. Middleton has not conducted a reserved legal activity without entitlement to do so, so are satisfied no further action is required on this occasion.”

41.

The decision also makes clear that on 18th May 2022 the SRA granted an application to vary the approval of Mr. Middleton’s employment as a Senior Litigation Executive subject to conditions, one of them being that his work would be directly supervised by Mr. Robert Ashall. This was long before the Defendants ever made this point. The decision said that there were no concerns about Mr. Ashall’s supervision”.