“Subject to sub-paragraph (2), where— (a) the Society [i.e. the Law Society] is satisfied that a recognised body or a manager of such a body has failed to comply with any rules applicable to the body or manager by virtue of section 9 of this Act; or … (d) the Society has reason to suspect dishonesty on the part of any manager or employee of a recognised body in connection with (i) that body's business, (ii) any trust of which that body is or was a trustee, (iii) any trust of which the manager or employee is or was a trustee in his capacity as such a manager or employee, or (iv) the business of another body in which the manager or employee is or was a manager or employee or the practice (or former practice) of the manager or employee; … … the powers conferred by Part II of Schedule 1 to the 1974 Act shall be exercisable in relation to the recognised body and its business in like manner as they are exercisable in relation to a solicitor and his practice.”
“In connection with the application of Part II of Schedule 1 to the 1974 Act for the purposes of this Schedule, in that Part of that Schedule— (a) any reference to the solicitor or to his practice shall be construed as including a reference to the body in relation to which the powers conferred by that Part of that Schedule are exercisable by virtue of paragraph 32, 32A, 33 or 34(1) of this Schedule or to its business (or former business) as a recognised body; (b) any reference to paragraph 1 of that Schedule shall be construed as including a reference to paragraph 32 or 34(1) of this Schedule;”
“81. The present position is as follows. The Lord Chancellor submits, and Mr Patel and Neumans both accept, that the DCO should be revoked. In our view, this is plainly right. The facts are set out in the Lord Chancellor's case and in the witness statements of Mr Fitzgerald-Morris, including the points by reference to the detail in the Registrar's report and the conclusions are clear. They have not been answered by either Mr Patel or Neumans and they are in no position to contest the facts. If the true facts had been known, we are clear that the court would not have made the original DCO. Additionally on the basis of largely unchallenged facts, as they have now belatedly emerged set out in the Lord Chancellor's case and evidence, we are quite satisfied the DCO should be revoked and we so order.”
“(a) Master Egan wrongly concluded that 91% of the hours spent preparing the defence to the Crown Court proceedings were false. The Firm [i.e. Neumans] does not accept the conclusion that the lack of contemporaneous notes by Mr Sheikh must mean the work was not done. If Master Egan is correct in his conclusion then it would mean that only 38 minutes per working day were spent preparing the defence to the Crown Court proceedings. The Firm considers that to be clearly wrong given this case was deemed to be the biggest worldwide conspiracy ever brought to trial. (b) The Firm does not accept the criticism that Mr Sheikh’s attendance notes supporting his work for the 2,783 claimed hours in preparation of the defence to the Crown Court proceedings bear a striking similarity to those supporting his claim for 102 hours in the Court of Appeal proceedings. The Firm accepts as a fact that the attendance notes are similar in style and content. However, the Firm states that fact does not equate to evidence of the work not being done. This fact is reflective of the similar nature of the activities being done, for example, reading and considering documents. (c) The Firm considers that the basis of Master Egan’s allegation that the claim of over£300,000 for a noting brief was required to attend the trial of co-defendants of Mr Patel (the trial of which took place prior to Mr Patel’s trial) in order to better prepare Mr Patel’s defence. The Firm accepts that at the time of this earlier trial Mr Patel did not contemplate having to pay in excess of£300,000 for the noting brief. This was because of the existence of the Capping Agreement. At the point of retrospectively varying the fees (with the Deed of Variation) Mr Patel was then in a position to assess the value of work undertaken by the noting brief and, ultimately, pay for that work. (d) In relation to Master Egan’s conclusion that the submission of the bill of costs and the deliberate non-disclosure of the eight invoices by the Firm was dishonest, the Firm submits that the non-disclosure was not dishonest. Instead, the Firm chose not [to] disclose the invoices in order to avoid confusion. The Firm considered the invoices to be unenforceable due to the retrospective effect of the Deed of Variation so instead treated the payments made against those invoices as payments on account against the final bill. Further, the Firm is of the view that it did disclose the invoices when it was asked for them. (e) Master Egan’s fifth conclusion was in relation to Mr Patel’s affidavit, which the Court of Appeal ordered him to prepare in support of the DCO [i.e. defendant’s costs order]. Master Egan concluded that Mr Patel’s evidence that he was content to pay the final invoice in the full amount and his evidence about the deliberate non-disclosure of the invoices he paid was dishonest. In response to this the Firm repeated its points raised in response to the fourth conclusion. The Firm also directed the Supervisor to a witness statement prepared by Mr Patel to support the Firm’s report to the SRA. Specifically, the Firm provided this statement in relation to Master Egan’s conclusions about the non-disclosure of the eight invoices. As can be seen, Mr Patel’s witness statement does not address this point. (f) Master Egan’s sixth and final conclusion is that the Deed of Variation was designed to facilitate a dishonest claim on Central Funds. In response to this point the Firm stated that it took advice from a highly experienced costs lawyer with specific experience in retrospective variation agreements (Mr Roger Mallalieu). Further, Mr Patel was strongly advised by Mr Sheikh to take independent legal advice but he chose not to.”
“We shall give Ms Sabir the benefit of some considerable doubts that we have about her evidence. We do not say that there are no grounds to suspect dishonesty. We do not make a finding that [Ms] Sabir was honest or not. Simply put, we do not propose to intervene into the practice of Ms Sabir on the ground of reason to suspect dishonesty.”
“9.16 We have carefully considered whether it is necessary to intervene into the individual and former practice of Mr Sheikh and the Firm [i.e. Neumans], and have balanced the need to exercise the powers of intervention in the public interest against the serious consequences of the intervention for him, Ms Sabir, the Firm’s employees and clients. 9.17 We are satisfied that it is necessary to exercise powers of intervention in this case because there is strong evidence which suggests that the misconduct of Mr Sheikh is serious, involves the public at large and large sums of public money. 9.18 The misconduct was intentional and pre-meditated and appears to have been designed to enrich Mr Sheikh and the Firm. 9.19 The misconduct had its origins, it seems, in 2009 when the idea of the Deed of Variation was conceived and then executed. However, the consequences of the misconduct continue to the present, as can be vividly seen from the Court of Appeal’s judgment of19 December 2016 . 9.20 The Firm was slow to self-report matters which ought to have been reported years ago. It seems that it was only after an FI investigation started, in the comparatively recent past, that the Firm self-reported. 9.21 Mr Sheikh has recently resigned as the COFA and COLP. He has also, very recently indeed, resigned as a member of the Firm. This removes some risk to the Firm and to the public, since a person who appears to us to be wholly and obviously unsuited to be a COFA and a COLP is no longer in those roles. His resignation as a member of the Firm also provides an apparent degree of reassurance. 9.22 However, Mr Sheikh is still at large, and he can still influence the way in which the Firm is managed and run, albeit with a degree of less viability, and with less personal liability (as a COLP, COFA and member) than before. He poses a continuing threat to it that is not extinguished by him resigning in the way that he has. 9.23 Moreover, this was, until very recently, a firm with two owners: Mr Sheikh and his wife, Ms Sabir. They ran it together. Mr Sheikh’s relationship with the Firm is so close and their respective interests and history so closely intertwined that no meaningful and realistic distinction can be drawn between him and the Firm. 9.24 We have been asked to accept that (i) Ms Sabir is now in charge of the Firm and she is best placed to continue to do so; (ii) there is no risk any longer because Mr Sheikh is not in any recorded and regulated roles. We do not accept this. For years, and particularly when Ms Sabir has been on maternity leave, Mr Sheikh has run the Firm. Significantly, he has controlled the finances. He has done this without any robust third party oversight. 9.25 Equally significantly, Ms Sabir, when recently describing her role as the Managing Partner in response to the Production Notice, does not mention any financial management role at all. While her list of functions is not prescriptive, the fact that there is no mention of fiscal control at all is telling. 9.26 The fact that Mr Sheikh has now resigned as the COFA does not mean that his ability to exercise control and influence of the Firm’s finances is restrained. It means that he is no longer accountable to the SRA about them as COFA. His legal obligations as a member have ceased. 9.27 We consider that Mr Sheikh’s breaches of the rules, principles and outcomes identified above creates an unacceptable risk to clients and the wider public. On balance, we are satisfied that the need to intervene into the practice to protect clients and the public interest outweighs the serious implications of intervention for Mr Sheikh and Ms Sabir.”
“Ms Sabir has requested that she attends before us for interview to make representations. We have considered whether we have all the information and evidence that we require to enable us to make a decision in respect of this matter. We have extensive and detailed representations from Ms Sabir’s legal representative, in addition to the bundle of evidence. We do not consider it necessary to invite her for interview as we have sufficient evidence and information to make a decision.”
“[179] In my view, the rule is that, before a statutory power is exercised, any person who foreseeably would be significantly detrimentally affected by the exercise should be given the opportunity to make representations in advance, unless (i) the statutory provisions concerned expressly or impliedly provide otherwise or (ii) the circumstances in which the power is to be exercised would render it impossible, impractical or pointless to afford such an opportunity. I would add that any argument advanced in support of impossibility, impracticality or pointlessness should be very closely examined, as a court will be slow to hold that there is no obligation to give the opportunity, when such an obligation is not dispensed with in the relevant statute.”
“Mr McCulloch, however, argues that the preferences for full and early disclosure expressed by Mr Justice Carnwath are entitled to the force of law, with the consequence that breach of them vitiates an intervention such as the present one and requires the court ex debito justitiae to exercise its power to direct withdrawal. He relies, correctly for this purpose, on the classic decision of the Court of Common Pleas in Cooper v Wandsworth Board of Works (1863) 14 CB (NS) 180 and on the judgment of the Privy Council in Kanda v Government of Malaya[1962] AC 322 ,[1962] 2 WLR 1153 . The latter gives life to the near-truism that a right to be heard is worthless unless the individual affected knows what is being said against him. The former, most memorably in the judgment of Byles J, is authority for the proposition that in construing and applying a statutory regime the common law will insist upon a right to be heard where the statute is silent. The doctrine is generous in its willingness to insist on supplementary forms of justice in public administration without requiring the individual to go down the thorny path (which belongs more properly to contract law) of seeking out implied terms; but it is not unbounded, and it requires the court to have careful regard to Parliament's prescriptions, especially when these do provide for an opportunity to be heard, albeit not at the stage which the individual would have preferred: see Wiseman v Borneman[1971] AC 297 ; Pearlberg v Varty[1972] 2 All ER 6 . Applying these principles to the legislation which we are now considering, it seems to me that the want of any provision in Sch 1 for notice to be given to the solicitor of particulars of a suspected breach other than a failure to comply with certain specified rules demonstrates not an omission which (in the phase of Byles J) it is for the justice of the common law to supply, but an intelligible scheme of professional self-regulation for the protection of clients and the public which defers, but does not deny, a due opportunity for the solicitor to know the case against him or her and to challenge it and its consequences before a court of law.”
“It is submitted on behalf of the Law Society, and rightly in my view, that the common law principles of natural justice do not apply to the intervention process which is a statutory process enabling a challenge to be made in the High Court as provided for in Schedule 1 to theSolicitors Act 1974 : see Giles v. The Law Society[1996] 8 Admin LR 105 and Miller v. The Law Society[2002] All ER (D) 312 .”
“[31] In the present case, the “margin” arises at two stages: first, the discretion allowed to the legislature in establishing the statutory regime, and, secondly, the discretion of the Law Society as the body entrusted with the decision in an individual case. (In the former case, the only remedy for exceeding the “margin” may be a “declaration of incompatibility” under the 1998 Act.) The intervention procedure, now contained in theSolicitors Act 1974 , is long-established (dating back to 1941, in its earliest form), and has been reviewed by the court on many occasions. As appears from the cases to which I have referred, it has been recognised as “draconian” in some respects, but necessary for the protection of the public interest; and the courts have repeatedly emphasised the “balancing exercise” which it involves. I see no material difference between this and the “fair balance” which Article 1 requires. Nor do I see any reason why theHuman Rights Act 1998 should be thought to have changed anything. There has long been a right of individual petition to the Strasbourg Court for breaches of the Convention, but we have not been referred to any questioning of the intervention procedure under Article 1. I see no arguable grounds for thinking that the margin allowed to the legislature has been crossed, particularly having regard to the deference which is properly paid to an Act of Parliament, as compared to an administrative decision (see the Roth case, above, at paras 26, 83).”
“(i) Neumans has made common cause with Mr Sheikh. Master Egan’s May 2015 report did not prompt the firm to distance itself from Mr Sheikh in any way. When giving judgment on19 December 2016 , Simon LJ said that the defendant’s costs order in Mr Patel’s favour fell to be revoked on the basis of “largely unchallenged facts” and that Mr Patel and Neumans were both “in no position to contest the facts”