Anal Sheikh v The Law Society [2005] EWHC 1409 (Ch)

'Intervention in solicitor's practice'

"I cannot understand how they can have intervened in my firm, but they having intervened I knew what was in store for me. All solicitors do. It means bankruptcy. It means I am going to lose my house. It is going to mean I am going to lose all the assets I have worked hard for for the last 15, 17 years. I have nothing left now."

"6(4) Within 8 days of the service of a notice under sub paragraph (3), the person on whom it is served ... on giving not less than 48 hours notice in writing to the Society ... may apply to the High Court for an order directing the Society to withdraw the notice. (5) If the court makes such an order, it shall have power also to make such other order with respect to the matter as it shall think fit."

"[It] is by common consent a matter for the court's judgment (I prefer not to use the word discretion in this context) whether it should direct withdrawal - a judgment which may be significantly, though not conclusively, affected by the Law Society's own view of the facts, since the view taken by the professional body charged with the regulation of solicitors' practices is in itself a relevant evidential factor to which the judge not only can but must have regard."

"19(2) A solicitor who properly requires payment of his or her fees from money held for the client or controlled trust in a client account must first give or send a bill of costs, or other written notification of the costs incurred, to the client or the. paying party. (3) Once the solicitor has complied with paragraph (2) above, the money earmarked for costs becomes office money and must· be transferred out of the client account within 14 days."

'1 personally think 1 did, yes.'

'You have to tighten up here. You have to tighten up there. Clear this out. We need an answer for that.'

"The office's recommendation, as at the date of preparation of this Report, is that it. is not necessary to intervene, on the basis that the public will be adequately protected by the imposition of stringent immediate conditions on Miss Sheikh's practising certificate. However, the matter is finely balanced ... "

"1. The Panel were satisfied that grounds for intervention existed under paragraph l(I)(a)(i) of Part I of Schedule 1 Solicitors Act 1974 (as amended), namely that the Panel were satisfied that they had reason to suspect dishonesty on the part of Ms Anal Sheikh practising as Ashley & Co at 47-49 Blackbird Hill, London NW9 8RS in connection with her practice as a solicitor. 2. The Panel were also satisfied that grounds for intervention existed under paragraph 1 (1 )( c) of Part I of Schedule 1 Solicitors Act 1974 (as amended) namely that Ms Anal Sheikh failed to comply with the Solicitors Accounts Rules. 3. The Panel balanced the need to exercise powers of intervention in order to protect the public and the serious consequences of intervention for a solicitor. The Panel were satisfied that it was necessary to exercise powers of intervention in this case in view of the nature of the matters identified in the Forensic Investigations Report dated 22 November 2004. 4. The Panel were further" satisfied that it was necessary to exercise powers of intervention in order to protect the public. 5. The Panel RESOLVED to intervene into Anal Sheikh's practice at Ashley & Co of 47-49 Blackbird Hill, London, NW9 8RS."

'It is submitted that it was never the intention of Parliament in enacting the Solicitors Act 1974 that an application to set aside the intervention would give rise to proceedings of such length and complexity. The Act envisaged a swift procedure.'

'Miss A Sheikh has represented myself and my family for more than twelve years to our complete satisfaction and I have found her honesty and integrity beyond reproach. '

'In litigation· I have always found Miss Sheikh to be straightforward and open in her approach, and also to be mindful of and to promote the best interests of her client. Miss Sheikh has always impressed me as a fully trustworthy and honest individual and I have never had any reason to doubt or question her personal or professional integrity.'

' ... no opinion can be expressed as to whether or not sufficient funds are held on client bank account accounts to meet Miss Sheikh's liabilities to clients. However, Mr Shaw calculated that a minimum cash shortage of £41,125.00 existed on client bank account as at 31 January 2004.'

'1 identified a minimum cash shortage in relation to costs transferred from client account to office account in respect of the estate of Mr Thirkettle, in the sum of £41,1 25.00.'

'The description from the outset of 'cash shortage' to the ~um comprised in the Thirkettle bill. ; .. This is an important point. For those reading these reports the expression "cash shortage on client account" means one thing - that money has gone missing - and is usually sufficient on its own to justify a decision to intervene. In the present case, it is grossly unfair to describe the sum comprised in the Thirkettle bill as a "cash shortage" when in reality the height of the author's suspicion was that there was an overcharge. Nevertheless, this matter was the first one dealt with in the Report [the FI Report), .,. and may well have been a significant factor in the decision to intervene. '

'TO PROFESSIONAL CHARGES for the provision of legal services following the death of the late Albert Thirkettle. Dealing with administration of estate and trust thereafter. Detailed account to follow.'

'Absolute rubbish. The matter was extremely complicated. I spent days on this. If he could do it in a lesser time he's a better lawyer than me.'

'Something has gone wrong in my office. I . cannot account for it.'

' ... particularly given the size and amount of the round sum transfers made by Miss Sheikh and the subsequent delays in allocation of the round sum transfers to the appropriate client ledgers'

"Costs transferred out of client account in accordance with rule 19(2) and (3) must be specific sums relating to the bill or other written notification of costs, and covered by the amount held for the' particular client or controlled trust. Round sum transfers on account of costs will be a breach of the rules. " (My italics) In so far as the Law Society say that the last sentence of the note lays down a general prohibition of round sum transfers, I cannot agree. the key point is that the note is referring to round sum transfers 'on account of costs, not to round sum transfers in respect of (or simply 'of) costs. I accept Mr Treverton-Jones' submission that the note is aimed at preventing solicitors from taking money belonging to clients before the solicitors have earned it. This is, as it seems to me, consistent with rule 19(4): "

" ... one of the reasons that Miss Sheikh gave for making round sum transfers was time constraints. She just did not have time to do the thing, to do the transfers should I say, as individual amounts. She was under tremendous time pressure and I think that is accepted."

' It is a very small matter, Mr Malek. ... You have slip-ups from time to time.'

'What the solicitor would normally then do would be to post the bill of costs which has effectively been rendered to the [LSC] because they have paid it. And that would be debited to the office side of the ledger, for £1,000 for instance to square up the £1,000 that is on the credit side of the ledger. So it would balance out to zero.'

'All that has gone wrong, you would say, is that, simply on these legally aided, publicly funded matters, they have not made the appropriate entry on the ledger when the special payment on account came in. '

"I am not sure I agree with that. If there is a challenge and you believe you have made a fair and proper charge to the client, I am not clear that you should not take the funds. Obviously you have to repay them if the challenge goes against you."

'You have to accept that one is sometimes putting two hats on. When I put my accountancy hat on I, to some extent,· shelve other matters. '

"This was a sizeable estate: the, number of assets, the sheer volume ,of documentation, and the difficulty of obtaining information from some of the asset holders made it more cumbersome than would be usual, but while the estate made ' administrative demands upon me, I cannot pretend that it was legally complex. In the circumstances I do feel that the level of charge, based on recorded time, is higher than I would myself have expected. I have given the matter some thought and my reaction would be to reduce it by a percentage. I have applied a 15% reduction."

'Interest ... is one of the things I do have to refine and set up a procedure for. There are certain procedures in place. Broadly, most of the money I have is legal aid money and interest just does not arise.'

'I do not think any practitioner would pretend that accounting for interest at the end of a case is easy, but I also accept that procedures do need to be tightened up.' but I have not done that with probate yet. '

'In those cases where I have to acknowledge that interest was not accounted for I would submit that the payment of. interest on other cases demonstrates that my firm did not have a general practice not to account for interest, and that failure to account for interest in these specific cases was simply an oversight. I am willing to undertake to make good that oversight. '

'Looking forward to hearing from you in due course with cheque for accrued interest of monies while held by you.'

"Q. How on earth is a sole practitioner, working in a busy practice, ever going to be able to devote the time and trouble necessary to answer your detailed letters in the detail that you would wish? How on earth is it ever going to be done? A. I think we all accept that solicitors are busy people ... So we are not completely averse to granting extensions of time and we will consider reasonable requests. That said, solicitors have an obligation as a matter of conduct to respond to correspondence from the Law Society .... Again we accept that solicitors are busy but we cannot not raise matters because there are numerous issues and it will take a solicitor a great deal of time to respond to us. The Law Society is under a duty to raise issues with solicitors which involve their conduct or the service they are providing to their clients. So I accept your point, I accept what you are saying, but I think that the solicitor would have to make the time to respond."

'But Miss Sheikh, if she is going to carry on being a solicitor, simply cannot reply.'

'Were it not so serious, the chain of events set out in the hundreds of pages devoted to this issue in (he files before the court could be described as a comedy of errors.'

"To: Anal Sheikh Company: Ashley & Co Fax number: 020 8200 9170 From: Ian Jones Date: 17/0212005 Reference: INT/537-2005/U2 Total pages: 4 Subject: Intervention."

"Ms Sheikh Please find enclosed letter and Notice dated 17/02/05 concerning your practice. It is important that you' immediately read both documents. [Information about Mr Jones' two abortive telephone calls.] As stated in the letter I will be attending at your office together with the Law Society appointed agent, Mr John Weaver of Russell-Cooke Solicitors, on Friday 18 February 2005 at 10.30 a.m. I would be obliged if you attended at your office at the same time. Yours sincerely" vii) The next morning, Friday 18 February 2005, Miss Sheikh did not go to her office. She had to go to wherever she had been the previous afternoon to continue with the same professional matter. viii) I think that the only person present at the office from the start of normal business hours was a part-time secretary, Mrs Taylor. Further, she was not the same secretary as the one who had been there when Mr Jones had telephoned the previous day. Mrs Taylor saw the fax in the fax machine, and obviously must have looked at some of it and telephoned Miss Sheikh. I say that, because a colleague of Mr Jones at the Law Society, Mr Bain, states in a witness statement that at approximately 9.45 am he received a telephone call from Mrs Taylor; she had received a fax which referred to attendance of staff of the Society at 10.30 am; Miss Sheikh was not in the office and would not be in all day. 'Further, she said she had been asked by Miss Sheikh to try and arrange for the meeting to be postponed to the following Monday'. ix) So it appears that the first thing Mrs Taylor did when she saw the fax was to ring Miss Sheikh. There is an issue of whether she told Miss Sheikh that the Law Society representatives were going to attend to effect an intervention. Miss Sheikh adamantly said in evidence that she did not. Mr Malek disputes this, but I accept what Miss Sheikh says for several reasons. a) I do not think that Mrs Taylor would have read the three formal pages of the fax which followed the cover sheet. b) On the cover sheet she would certainly have read the text of the message, and obviously did so, as Mr Bain's statement makes clear. The text of the message makes no reference to an intervention. c) It is true that the list of items preceding the message includes 'Subject: intervention', but that item is not given any particular prominence over the others. Mrs Taylor would probably have skipped over the introductory items and concentrated on the text of the message. In any case I understand that Mrs Taylor did not have any specialist experience as being a legal secretary. It is unlikely that she would have had any idea what an intervention was. d) I think that my view is strongly supported by what Miss Sheikh did when she spoke to Mrs Taylor. She told Mrs Taylor to telephone the Law Society, to say that she (Miss Sheikh) was out of the office all day, and to ask for the 'meeting' to be rearranged for the following Monday. If Mrs Taylor had understood what an intervention was and that the Law Society were coming at 10.30 to effect one, and if Mrs Taylor had told that to Miss Sheikh, I cannot imagine for a moment that Miss Sheikh would have said to her: 'Tell them I am' tied up out of the office today .. Can they come on Monday instead?' e) Finally, but by no means the least point: if a solicitor tells me something in evidence I am in the habit of believing it. In Miss Sheikh's case the Law Society is not prepared to place much credit in the veracity of its own member, but I am. f) After Mrs Taylor had spoken to Miss Sheikh she telephoned the Law Society, and spoke to Mr Bain. He told her that it was imperative that Miss Sheikh attend the meeting at her office. He mentioned that Miss Sheikh's practising certificate had been suspended, so she should not attend a meeting in the capacity of a solicitor. Mrs Taylor said that she would try to speak to Miss Sheikh again and would ring Mr Bain back. xi) Mrs Taylor did speak to Miss Sheikh again. Something was mentioned about a practising certificate. Miss"