Ndole Assets v Designer M&E Services [2018] EWCA Civ 2865

Ndole Assets' claim form was served by CSD Legal, an unauthorised claims consultancy. The Court of Appeal held service constituted a reserved legal activity under the Legal Services Act 2007, but this irregularity did not render service a nullity, so the claim stood.

Facts

Sheldon Construction engaged the defendant, Designer M&E Services UK Ltd, as a subcontractor for a development in Hackney under a contract dated 9 September 2010. Following disputes, Sheldon terminated the subcontract in January 2011. After a series of assignments in 2015-2016, Sheldon’s cause of action was vested in Ndole Assets Limited, a BVI company beneficially owned by Mr Laznik.

Ndole issued proceedings in the Technology and Construction Court on 17 October 2016. CSD Legal Limited (CSD), a claims consultancy run by Mr Dain (an unregistered barrister), acted for Ndole. CSD, which is not a firm of solicitors and was neither authorised nor exempt under the Legal Services Act 2007, served the claim form, Particulars of Claim and appendices on the defendant at its registered office on 31 January 2017. Mr Dain signed the Certificate of Service as “Consultant”.

The defendant’s solicitors challenged jurisdiction, arguing that CSD had unlawfully engaged in a reserved legal activity, rendering service invalid. If service were set aside, a fresh claim would likely be time-barred.

Issues

The Court of Appeal had to decide:

• Whether service of a claim form constitutes a “reserved legal activity” within the meaning of the Legal Services Act 2007, specifically as “conduct of litigation” under paragraph 4 of Schedule 2.
• If so, whether service carried out by an unauthorised and non-exempt person renders the service invalid, requiring the claim to be struck out.

Arguments

Appellant (Defendant)

Mr Darling QC submitted that CSD, in serving the claim form, had engaged in the conduct of litigation under the 2007 Act. Having neither authorisation nor exemption, CSD committed an offence, and service was therefore invalid, whether as a nullity or by discretionary setting aside.

Respondent (Claimant)

Ms Sinclair QC did not support the judge’s reasoning at paragraph 36 (that a litigant in person could delegate the task to an agent). Instead, she submitted via the Respondent’s Notice that service of a claim form does not fall within “conduct of litigation” at all, relying partly on Agassi v Robinson. Alternatively, she relied on the exclusion in paragraph 4(2) of Schedule 2. She also argued that any breach should not render service a nullity.

Judgment

Davis LJ, with whom McCombe LJ and Peter Jackson LJ agreed, dismissed the appeal, though for reasons different from those of Coulson J.

Service as a reserved legal activity

The Court held that service of the claim form falls within “conduct of litigation” as defined in paragraph 4 of Schedule 2 to the 2007 Act. It is either an aspect of the “prosecution” of proceedings or, alternatively, an “ancillary function” — a formal step required in the conduct of litigation. The Court rejected Ms Sinclair’s argument that Agassi v Robinson had decided otherwise; the Court of Appeal in Agassi had expressly declined to determine the precise parameters of the definition.

Rejection of the judge’s reasoning

The Court rejected Coulson J’s conclusion at paragraph 36 that a litigant in person could delegate service to any agent. Following Gregory v Turner [2003] 1 WLR 1149, the right of a litigant in person to conduct litigation is personal and cannot be delegated to an unqualified agent, as this would “drive a coach and horses” through the statutory purpose.

The pragmatic distinction

To reconcile the position of process servers and postal workers, the Court adopted a substance-over-form approach. The distinction lies between those performing “purely clerical or mechanical activities” (permitted) and those who undertake or assume legal responsibility for service as prescribed by the rules (prohibited unless authorised or exempt). Whether a particular actor falls on one side or the other is a question of fact and degree.

On the facts, CSD went well beyond mechanical delivery. Their correspondence read like letters from a firm of solicitors, they requested confirmation of authority to accept service under CPR 6.7, arranged service at the registered office, and signed the Certificate of Service. They were taking responsibility for service under the rules and therefore engaged in the conduct of litigation without authorisation or exemption.

Consequence of unlawful service

The Court held that unlawful service by an unauthorised person does not render service a nullity. The 2007 Act contains no provision stipulating such a draconian consequence. Sanctions under the Act (criminal process and contempt) are directed at the unauthorised person, not the innocent client. Following the approach of Thomas J in Crescent Oil and Shipping Services Ltd v Importing UEE [1998] 1 WLR 919, the breach amounted to an irregularity, not a nullity, and the court has discretion to set service aside.

On the facts, there was no reason to set service aside. CSD and Ndole acted in good faith, believing they were complying with the law. The claim form reached the defendant before the limitation period expired. Setting aside would confer an “uncovenanted advantage” on the defendant based on “adventitious technicality”.

Implications

The decision establishes that formal service of a claim form is a reserved legal activity under the 2007 Act and must be carried out by an authorised person, an exempt person (including a litigant in person acting personally), or by someone performing a merely mechanical or clerical role such as a courier or process server engaged to deliver documents.

Claims consultants, McKenzie friends, and other unqualified advisers cannot lawfully take responsibility for serving a claim form on behalf of a client. Whether a particular actor has stepped over the line is a question of fact and degree, focused on their actual role and activity.

Importantly, the Court made clear that a breach of the 2007 Act does not automatically invalidate the procedural step. Service by an unauthorised person is an irregularity, not a nullity, and the court retains discretion whether to set it aside. The sanctions under the Act (criminal liability and contempt) fall on the unauthorised individual, protecting innocent clients from disproportionate consequences.

The decision is significant for construction practitioners, claims consultants, and litigants in person, and for the broader legal services regulatory regime. It clarifies the boundary of permissible unqualified activity in litigation while avoiding unjust outcomes for clients who acted in good faith. It also highlights that corporate litigants face particular difficulty acting “in person”, since they necessarily act through human agents, a point the Court expressly left for fuller consideration in another case.

Verdict: Appeal dismissed. Although CSD’s service of the claim form amounted to unlawful conduct of litigation under the Legal Services Act 2007, this rendered service an irregularity rather than a nullity, and the Court declined to exercise its discretion to set service aside.

Source: Ndole Assets v Designer M&E Services [2018] EWCA Civ 2865