A judge has ruled in the first review of what constitutes “a reserved legal activity” for the purposes of the Legal Services Act 2007.
The case raised questions as to the extent to which claims consultants can act on behalf of claimants, and the outcome has been described by a lawyer as contrary to the legislation’s rationale to regulate those conducting litigation.
Designer M&E Services UK Ltd, a specialist mechanical and electrical engineering sub-contractor, had applied to have a claim against it struck out, arguing that the claim form and particulars were not properly served.
However, Coulson J ruled that the claim can proceed.
Designer carried out work on a development in Hackney in 2010 for a main contractor. Through an array of loan agreements and assignments, a British Virgin Islands company, Ndole Assets Ltd, was left with the purported cause of action against Designer.
CSD Legal, a claims consultant, did almost everything in the proceedings on behalf of Ndole, including service of the proceedings on Designer.
Designer applied to have the claim struck out on the basis that the actions of CSD constituted the conduct of litigation which is a reserved legal activity under section 12 of the Legal Services Act 2007.
Designer argued that as CSD was not authorised to conduct reserved activities then service was invalid and the claim should be struck out.
The judge held that service of the claim was a reserved legal activity, which CSD was not authorised to do. However, he found that, as Ndole was acting as a litigant-in-person, it was entitled to serve the claim form itself. Therefore, as CSD was acting effectively as Ndole’s “agent”, Ndole had delegated its own authority to serve the claim form to CSD.
Stephen Rosser, chief executive of Clarke Willmott LLP, which represented Designer, expressed his disappointment at the decision: “Whilst claims consultants can and do provide an invaluable service, particularly in the construction industry, the Legal Services Act ensures clients are protected and insured when conducting litigation. We are concerned that this judgment will reduce the protection parliament intended to afford clients.”
“This is a disappointing result for clients. The rationale underpinning the Act is to ensure that those conducting litigation are regulated. This protects the clients in providing a strict professional code of conduct by which those who are regulated must abide.
“This judgment means that those who are unregulated may be able to bypass this and ultimately it will be clients who suffer.”
To send feedback, e-mail jess.harrold@egi.co.uk or tweet @jessharrold or @estatesgazette
