High Court Rejects Freeholder Arguments for Exploitative Business Model
30 October 2025
The High Court recently delivered a definitive judgment dismissing freeholders’ claims that the Leasehold and Freehold Reform Act 2024 (LAFRA) infringes their human rights - ARC Time Freehold Income Authorised Fund & Ors v Secretary of State for Housing, Communities and Local Government [2025] EWHC 2751 (Admin).
The disputed reforms
Leading freehold estate owners and investment funds alleged that LAFRA unlawfully deprived them of property rights protected under the European Convention on Human Rights (ECHR) by disputing 3 core LAFRA measures:
- the abolition of the 50% marriage value share on short leases;
- the cap on ground rent used in calculating lease extension prices;
- the ban on recovering legal and professional fees from leaseholders.
Human rights argument fails
The claimants argued that LAFRA deprived them of fair market value without justification. The court rejected this outright, ruling that Parliament was entitled to rebalance leasehold ownership in the public interest, even if it resulted in financial loss to freeholders.
Parliament’s right to reform
The judges held that Parliament may correct structural defects in property law and need not guarantee investors perpetual windfalls. Freeholders had taken the risk that statutory valuation assumptions could change and had no legitimate expectation that the rules would remain frozen. The judgment described the challenge as an attempt to insulate a flawed business model from democratic reform.
Market value and compensation
At the heart of the ruling was the rejection of freeholders’ demand that market value should include marriage value and uncapped rent. The court held that market value is not a fixed concept and that when Parliament establishes a statutory compensation scheme, it can define value on its own terms.
Prospects of an appeal
While the claimants are almost certain to seek permission to appeal, their chances may be limited. Any appeal must show that the court misapplied the law or that Parliament’s reasoning was irrational, which is unlikely. Alternatively, the claimants might try to appeal directly to the Supreme Court, citing public interest and the financial impact, but permission is uncertain and could cause delays for years.
A turning point for leasehold reform
The ruling is widely seen as a moral and legal win for leaseholders. The court rejected all major freeholder arguments, describing the business model as exploitative and outdated. With marriage value condemned as unearned profit and ground rent dismissed as money for nothing, the way is clear for LAFRA to provide cheaper lease extensions and more control for homeowners, another step towards long-awaited leasehold reform.
Anti-money Laundering Shake-up – Financial Conduct Authority to Supervise Law Firms
30 October 2025
In one of the most significant shake-ups in the legal sector in years, the Financial Conduct Authority (FCA) is set to take over anti-money laundering (AML) supervision of law firms from the Solicitors Regulation Authority (SRA).
The move, part of a government effort to strengthen the UK’s financial crime protections, will see the FCA become the sole professional services supervisor (SPSS) for AML, with the transition expected in 2026.
It is a major shift in how money laundering is to be policed across the UK legal world. Since 2007, the SRA has been the sector's AML watchdog on more than 6,000 firms and 23,000 individuals. But despite years of monitoring and millions in fines, not a single law firm or solicitor has ever been criminally prosecuted for AML breaches.
The FCA is predicted to take a markedly different approach, focusing less on ticking boxes and more on results and enforcement. Unlike the SRA, which can only impose regulatory penalties, the FCA has the authority to pursue criminal prosecutions under the Money Laundering Regulations 2017.
The FCA has got teeth and can compel witness interviews, run forensic investigations, and coordinate with other law enforcement agencies, tools that could see not just firms, but individual partners and compliance officers, facing criminal sanctions.
The Law Society has urged the government to manage the handover carefully and avoid driving up costs or adding red tape that could hurt the UK’s world-leading legal sector.
Experts say law firms should not wait for 2026 to start preparing. The FCA’s style of enforcement is tougher, faster, and far more focused on results and we set out below what firms need to be doing now:
- ensure AML systems actually work. They should flag up and stop suspicious activity, not just look good on paper;
- tighten internal controls. Keep clear, risk-based records showing how key decisions are made;
- take personal responsibility seriously. Senior partners, compliance officers, and even junior fee-earners may face individual liability if things go wrong.
The message is clear-the days of procedural box-ticking are over, and a new era of accountability and possible criminal prosecution is shortly to begin.
Decision in Mazur Forces Firms to Rethink Who can Act in Litigation
21 October 2025
A recent High Court decision has sent shockwaves through the legal profession, shaking long-held assumptions about who can and who cannot run litigation in England and Wales.
In Mazur & Stuart v Charles Russell Speechlys LLP [2025] EWHC 2341 (KB), the court ruled that under s 21(3) of the Legal Services Act 2007 only authorised individuals, being those holding practising certificates or equivalent rights can legally conduct litigation, a reserved activity. Being supervised by a qualified solicitor, or employed by an authorised firm, is not enough.
The decision has major implications for thousands of paralegals, legal executives, and other non-authorised staff who handle litigation tasks every day.
The court decision
The case centred on an employee at a debt recovery firm who had filed court documents and drafted pleadings while not holding a practising certificate. His employer argued that he acted under a solicitor’s supervision and therefore within the law.
Mr Justice Sheldon disagreed and emphasised that the law reserves the conduct of litigation to authorised persons only. Justice Sheldon further stated that supervision does not confer authority, what matters is who really exercises professional judgment and takes responsibility for strategic decisions.
In practical terms, this means only the authorised solicitor can approve pleadings, sign statements of truth, issue proceedings, or make applications. Non-authorised staff can assist, but they must not cross the line into taking responsibility for those actions.
Substance over form is the new watchword. If a paralegal is effectively running a case, it does not matter whose name is on the file. The firm could find itself in breach of the Legal Services Act 2007 which is a criminal offence.
Ambiguity, issues and outcomes
For years, law firms and regulators operated under the assumption that supervised staff could take certain formal steps in litigation. Incorrect guidance from both the Solicitors Regulation Authority (SRA) and Chartered Institute of Legal Executives (CILEX) had supported that view.
The Mazur ruling has upended that position, leaving many firms scrambling to adjust. Large and small practices alike are reviewing workflows, limiting what non-authorised employees can do, and urgently seeking clarification from regulators.
The Law Society has warned that, without fresh and consistent guidance, satellite litigation could erupt as parties challenge cases on technical grounds potentially affecting costs and outcomes for clients.
The knock-on effect extends beyond litigation. Other reserved activities under s 12 of the Legal Services Act 2007, for example conveyancing, probate, and preparing certain legal instruments, could also face renewed scrutiny.
Many experienced but non-authorised practitioners in those fields effectively run files independently, relying on nominal supervision. Mazur may force firms to rethink that model entirely.
Considerations for CILEX members
For years, CILEX guidance suggested that its members employed in solicitors’ firms could conduct litigation under supervision. This advice was corrected in late 2023, but not before thousands of legal executives had built careers on that understanding.
In response to Mazur, CILEX Regulation has applied to the Legal Services Board (LSB) to fast-track an application allowing legal executives to obtain standalone litigation rights, separate from advocacy rights, which were previously linked. If approved, this would offer a formal pathway for CILEX members to continue conducting litigation lawfully.
The LSB has indicated that a decision may be reached within weeks. It has also launched a review of how regulators communicated information about litigation rights, following disclosures that the SRA had previously, and incorrectly, advised that non-authorised individuals could conduct litigation under supervision.
Meanwhile, concern is mounting within the CILEX community. A petition calling for reform of the Legal Services Act 2007 to give CILEX members full litigation rights has already attracted over a thousand signatures.
Industry response – stay informed and prepare
The profession is still assessing the practical implications. Many firms have paused work undertaken by non-authorised staff while risk and compliance teams determine safe parameters. The immediate advice from experts is to stay calm but act methodically.
Firms are being urged to:
- assign clear responsibility to authorised solicitors who genuinely direct cases;
- conduct document oversight, keeping evidence of review and approval at every key stage;
- define the boundaries between assisting with and conducting litigation;
- update internal training and risk guidance to reflect that earlier regulatory messages may no longer be reliable.
Mazur has forced the legal profession to confront uncomfortable truths about its structure and regulation. It reveals inconsistencies in past guidance, highlights the outdated complexity of the Legal Services Act 2007, and underscores the need for a modern approach to recognising legal professionals beyond the traditional categories of solicitors and barristers.
Whether through legislative reform, fast-tracked practice rights, or clearer supervision frameworks, the coming months will be crucial.
Further updates will be provided as developments occur.
Proposed Reforms for Turbocharging the Conveyancing Process
7 October 2025
The government has launched a 12-week open consultation on reforming the home buying and selling process, which will close on 21 December 2025. Following the consultation, the government will publish a roadmap setting out measures to create a conveyancing system that is more straightforward, quicker, and dependable in the long term.
The proposals under consideration include:
- introducing improved digital tools to streamline processes, and reduce repetition;
- measures to reduce transaction fall-throughs and risks, including those caused by property chains, giving consumers and professionals greater clarity;
- raising professional standards, to ensure competence and accountability throughout the sector;
- ensuring that consumers are better informed through improved education and transparency;
- reforms to build trust and confidence in the system resulting in higher satisfaction and a more resilient property market.
Upfront property information
As an initial step, it is suggested that sellers and estate agents ensure prospective buyers receive a detailed property information pack when a property is listed for sale.
Before listing, sellers would collaborate with conveyancers and surveyors to conduct searches and a property condition assessment.
Upfront information would include key property details, such as:
- tenure;
- council tax band;
- EPC rating;
- property type;
- title information;
- verification of the seller's identity;
- if applicable, leasehold terms;
- building safety data;
- standard searches to include local authority, drainage and water, environmental, and locality-specific risks such as mining or chalk;
- property information, such as that captured in the Property Information Form TA6;
- a property condition assessment tailored to the property age and type;
- where applicable, additional details such as service charges, planning consents, flood risk, chain status, and a clear floor plan.
Professional standards for estate agents
Additionally, the government proposes the introduction of a Code of Practice to establish minimum standards for all residential estate agents, including estate, letting, and managing agents.
Alongside this a recent consultation outlined a preferred approach for delivering mandatory qualifications for property agents, with the government designating professional bodies to oversee and implement the qualification requirements, supported by local authority enforcement.
Digital property logbooks and packs
Digital property packs will contain current and historical information about a property, giving homeowners control over their own data and reducing transaction risk by ensuring its provenance is verified.
This will allow conveyancers to progress transactions faster and with greater confidence in the information provided.
Binding conditional contracts
Currently, buyers or sellers can withdraw from a transaction at any time before exchange of contracts, often at a significant cost to the other side.
The government intends to address this by encouraging the use conditional contracts, making transactions legally binding at an early stage. Withdrawing after a binding agreement has been signed may result in a financial penalty, such as forfeiture of the buyer’s deposit.
Streamlining transactions
The role of conveyancers has expanded significantly in recent years, in which has contributed to the home moving process taking much longer.
Several factors are driving these delays, such as:
- strict compliance regulations, such as for Anti-Money Laundering (AML), which require consumers to undergo repetitive checks from conveyancers, lenders, estate agents, and other property professionals during a single transaction;
- property titles have become increasingly complex, with issues like managed freehold properties and estate rent charges becoming more prevalent;
- lenders placing additional demands on conveyancers to help manage their risk in lending against properties with these terms.
To address these delays the government proposes:
- streamlining AML checks so that consumers do not face repeated checks during a single transaction;
- introducing measures to accelerate the provision of information for leaseholders and homeowners on private or mixed tenure estates who wish to sell their property, and to protect sellers from unreasonable fees when requesting this information.
By Lawyers comment
If implemented, these proposals will represent a significant shift for both consumers and professionals alike.
The government predicts that:
- buyers can expect transactions to progress up to 4 weeks faster;
- the rate of fall-throughs will reduce from 1 in 3 transactions to 1 in 7;
- first-time buyers are expected to save approximately £710 per transaction, while home movers could save around £400.
While there is broad agreement that the conveyancing system needs reform, previous government initiatives have failed due to cost and limited engagement from stakeholders.
This latest initiative will once again require the full support of all stakeholders to succeed.
Of particular note is the proposal that conveyancers may be required to publish their performance track record as part of the reforms – a measure that is likely to provoke strong responses from the profession.
We will monitor progress with interest and provide further reports in the Looking to the Future publication, found in the Reference Materials folder of all guides.
For more information see the government Open consultation – Home buying and selling reform page.
AI Prompts Published to Complement By Lawyers Criminal Offences App
7 October 2025
Two new AI prompts have been created in the Criminal Guide.
The Prompt summarising the Criminal Offences Presentation Document works with the document produced while using the Criminal Offences app to summarise the responses and create a suggested sentencing outcome for argument in court.
The Prompt for submissions in support of a bail application in the magistrates’ court gives practitioners a clear structure for a bail submission, including legislation, case details and persuasive arguments.
By Lawyers is pleased to introduce AI prompts to our publications, helping our subscribers harness the power of LEAP’s Matter AI.
To find out more about how the Criminal Offences app can streamline work, please book a demo.
New Protections for Victims Speaking Out - Commencing from 1 October
From 1 October 2025, section 17 of the Victims and Prisoners Act 2024 introduces important new rules about non-disclosure agreements, NDAs, and settlement agreements. These rules make it clear that victims of misconduct can share their experiences with certain people, even if they have signed an NDA.
The new law protects disclosures made to a wide range of people and organisations. This includes the police, lawyers, professional regulators, victim support services, and qualified professionals, such as doctors or therapists. Victims can also talk to a trusted person like a parent, partner, or child to get personal support.
Disclosures are protected when they are made for appropriate purposes, such as seeking legal advice, reporting misconduct, or getting professional or emotional support.
This change is significant because it prevents NDAs from being used to silence victims. Organisations will no longer be able to rely on confidentiality clauses to stop people reporting concerns to the police, regulators, or support services. It strengthens victims’ rights and supports a culture of openness and accountability.
By Lawyers Confidentiality Agreement, Settlement Agreement, Non Disclosure Agreement and associated clauses have been updated to account for this change. Subscribe to By Lawyers News & Updates to receive practical legal updates straight to your inbox.
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