Case summary: JK v MK [2020] EWFC 2

The court was concerned with the question of whether an online company which assisted couples in navigating divorce was in fact carrying out a “reserved legal activity” under the Legal Services Act 2007.

Background

H and W (MK and JK) married in 2015 and separated in 2017. They had no assets and wanted to divorce on a clean break basis. They approached amicable (“the company”) to help them navigate the process.

The company assisted the parties with the preparation of: the divorce petition; the consent order; the Form A; the statement of information (D81); and the joint statement to the court. The parties filed the documents with the court. H and W were charged a total of £600.

When the consent order was placed before the court, concerns were raised that the company was in a position of a conflict of interest as it was acting for both parties. The court therefore referred this case (and other similar cases) to the Family Division Liaison Judge for the South-Eastern Circuit (Mr Justice Moor), who then in turn invited the Queen’s Proctor to intervene.

The case came before Mr Justice Mostyn. H and W appeared in person and the Queen’s Proctor and the company both instructed counsel. Mostyn J begun by approving H and W’s consent order and giving permission for the decree nisi to be made absolute. The company was joined as an intervener and H and W played no further role in the hearing.

The company’s position was that it did not represent anyone but instead assisted couples in getting divorced inexpensively, collaboratively and without lawyers. Its founder summarised its role as she saw it [13]:

“We assist customers with their financial negotiations. We help them to fill in the necessary forms and other court documents when agreements are reached. We help to draft the necessary consent orders and other documents. We are NOT engaged in the conduct of litigation on their behalf – we do not go on record and therefore do not represent them – they remain litigant in person throughout.”

Practically, clients would fill in an online form and software would generate the court documents, which would finally be checked by staff [14].

The SRA had previously investigated the company and commented that its model was “an example of innovative working” in response to changes to legal aid. Mostyn J noted that there may be policy questions about the regulation of the company, but such questions would fall outside the remit of his judgment. Mostyn J was also clear that, while recognising the company’s “clear social benefit”, the business model must be lawful [16].

Conflict of interest

The first concern was whether or not there was a conflict of interest in the company acting for both parties. It was agreed that there was not. Solicitors, in conveyancing transactions for example, are often jointly instructed by two parties (the code of conduct provides for such a situation) [18]. Further, Mostyn J found the company’s “red flag” system, which alerts staff when there are unusual circumstances (a suggestion of non-disclosure, if one party is represented, allegations of domestic violence), neutralised the risk of a conflict of interest [20].

Legal Services Act 2007

The principal concern was whether or not the company’s services violated the provision in the Legal Services Act 2007 (LSA 2007) which prevents someone who is not entitled to carry out a reserved legal activity from doing so (S14). There were two questions:

1. Was the company conducting litigation?

2. Was the company carrying out reserved legal activities?

Conduct of litigation

Mostyn J concluded that the provision of legal advice by a non-qualified person would not fall under the definition in the LSA 2007. By extension, a non-qualified person assisting in filling out documents would also fall outside the definition. The example given was a family member, who had recently gone through a divorce, assisting someone in completing a Form E. As a result, Mostyn J found that the company was not conducting litigation in any way [30].

Reserved instrument activities

The court then addressed the issue of whether the company was carrying out “reserved instrument activities”. Schedule 2 5(1)(c) of LSA 2007 defines “reserved instrument activities” as follows:

“preparing any other instrument relating to real or personal estate for the purposes of the law of England and Wales or instrument relating to court proceedings in England and Wales”

Mostyn J concluded that a literal interpretation would mean that “instrument” would catch “virtually any piece of legal writing” and consequently any document the company had prepared. However, assisting in the preparation of a consent order would be an exception, under 5(3)(b) of LSA 2007, as it would not be intended to be executed as a deed:

“(3) In this paragraph “instrument” includes a contract for the sale or other disposition of land (except a contract to grant a short lease), but does not include—

…

(b) an agreement not intended to be executed as a deed, other than a contract that is included by virtue of the preceding provisions of this sub-paragraph.”

Consequently, a literal interpretation of paragraph 5 of LSA 2007 would create an absurd situation where: assisting in the preparation of the the consent order would not be a reserved instrument activity, but assisting in the preparation of the accompanying D81 form would be a reserved instrument activity [36].

Mostyn J proceeded to disagree with this “literal” approach and found that [39]:

“the documents generated by the company which I have set out above do not fall within the scope of Paragraph 5, as they are not instruments within its meaning.”

Mostyn J acknowledged that this decision disagreed with two previous decisions (Pacey v Atkinson [1950] 1 KB 539 & Powell v Ely [1980] Lexis Citation 958). Both these decisions took the literal approach and found that a non-qualified person drafting and filing either a claim form or divorce petition would constitute an offence. However, Mostyn J justified his approach as follows: first, in 1980 divorce petitions were “arcane” with “legally impenetrable language” and now they can be completed online; second, a literal approach would lead to absurd results [37 - 38].

Two alternative conclusions were also offered. First, although a “human” factor currently exists (checking the documents) and an offence is therefore capable of being committed, it will not be long before artificial intelligence will check the documents [40]. Second, regardless, in order for a person to prepare the document they must be both a major contributor to the drafting and file the document with the court. In both the cases mentioned above an unqualified person drafted and filed the document. However, in this case, the company does neither [41].

Mostyn J acknowledged that he may have “adopted an unduly restrictive interpretation of the words in Paragraph 5”. However, he found this to be justified as there would be potential penal consequences if the company had committed an offence [41].

Mostyn J concluded by warning that, although he had found that the company had not committed an offence, this principle would only apply to other online divorce facilitators if “their business models are virtually indistinguishable from amicable’s” [46].