IPS Law LLP & Anor v Solicitors Regulation Authority Limited [2026] EWHC 1124 (Ch)

[2026] EWHC 1124 (Ch)Case No BL-2025-MAN-000100IN THE HIGH COURT OF JUSTICEVenue BUSINESS AND PROPERTY COURTS IN MANCHESTERBUSINESS LIST (ChD)Venue Manchester Civil Justice Centre1 Bridge Street WestVenue Manchester M60 9DJDate Monday, 26 January 2026
Before
HIS HONOUR JUDGE HODGE KC(Sitting as a Judge of the High Court)
Between
IPS LAW LLPClaimantCHRISTOPHER WILLIAM FARNELLClaimantSOLICITORS REGULATION AUTHORITY LIMITEDDefendantMR MARTIN BUDWORTH (instructed directly) appeared for ClaimantsMR PHILIP AHLQUIST (instructed by Stephensons Solicitors LLP, Wigan) appeared for DefendantAPPROVED JUDGMENT(Approved on 12 May 2026)Digital Transcription by Epiq Europe Ltd,Lower Ground, 46 Chancery Lane, London WC2A 1JEWeb: www.epiqglobal.com/en-gb/Email: civil@epiqglobal.co.uk(Official Shorthand Writers to the Court)This Transcript is Crown Copyright.  It may not be reproduced in whole or in part other than in accordance with relevant licence or with the express consent of the Authority.  All rights are reserved.
[1]This is my extemporary judgment on the hearing of a Part 8 claim formally issued on 26 November 2025 in the Business and Property Courts in Manchester under Case Number BL-2025-MAN-000100.[2]The claimants are IPS Law LLP and its senior partner, the second claimant, Mr Christopher William Farnell. They are represented by Mr Martin Budworth (of counsel). The defendant is the Solicitors Regulation Authority Limited. It is represented by Mr Philip Ahlquist (also of counsel).[3]An issue had been raised as to whether the claim form had been issued in time. That results from the nature of this claim. Mr Farnell, the second claimant, is a solicitor and the sole manager and owner of the first claimant, IPS Law LLP. Reports of misconduct by Mr Farnell and, through him, his practice were made to the Solicitors Regulation Authority. That initiated an investigation which, somewhat belatedly, led to an interim forensic investigation report dated 6 August 2025. I say ‘somewhat belatedly’ because the principal reports to the SRA which had given rise to that interim report were made as long ago as 14 July, 19 September and 22 November 2023.[4]The first of those complaints related to Dux Fortis Holdings, the second to Raleigh Financial Limited, and the third to Mr Craig Freeman. The sums involved were, respectively, some £1 million, £250,000 and £750,000.[5]Mr Budworth, on behalf of the claimants, complains about the delay in producing any investigation report in response to those original complaints. Essentially, Mr Farnell had been interviewed twice, the second occasion being in October 2024. It had been intimated to him that there would be a third interview, but this never materialised. Instead, an interim forensic investigation report was produced only on 6 August 2025. Even then, that was not submitted to Mr Farnell, or to his practice, at that time.[6]An investigations officer, Ms Irram Ali, produced a notice recommending intervention in the claimants’ practice on 13 October 2025. That referred to four other claims which had, in the meantime, been presented to the SRA but in respect of which it had not by then undertaken any full investigation. Those complaints dated between May and December 2024, although they appear to have related to events in 2023. It was only shortly after 13 October that the claimants received the notice recommending intervention in the claimant’s practice.[7]The claimants were given only seven days to make representations in response. That was the subject of a complaint by Mr Peter Cadman of Russell-Cooke, a solicitor instructed on behalf of the claimants, in an email timed at just after 3.15 on the afternoon of 15 October 2025. The SRA’s response was that it would adhere strictly to a seven day timetable for any response. Mr Budworth complains, with some justification, about the very rigid attitude to timescales applied by the SRA; and he contrasts that with the extremely relaxed timescale which the SRA appears to have applied to its own investigations.[8]Representations were made within the SRA’s timescale. That resulted in a supplemental notice from the investigations officer dated 4 November 2025. That was taken into account by the SRA decision adjudication panel when arriving at its adjudication on 11 November 2025. That led to a notice of intervention in the claimants’ solicitors practice and the suspension of Mr Farnell’s practising certificate.[9]By this claim form, the claimants exercise their statutory right to invite the High Court to review the intervention decision and to order its withdrawal. That right exists in relation to Mr Farnell as a practising solicitor under Schedule 1 to the Solicitors Act 1974. Schedule 2 to the Administration of Justice Act 1985 applies an equivalent scheme for intervention and for challenging any intervention to a recognised body such as the first claimant, IPS Law LLP. The substance of the relevant statutory provisions is entirely the same.[10]By paragraph 6 of Schedule 1 to the Solicitors Act 1974, the SRA serves notice of intervention and, within eight days of service, the person on whom it is served, on giving not less than 48 hours’ notice in writing to the SRA, may apply to the High Court for an order directing the SRA to withdraw the notice. By subparagraph (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 may think fit.”
[11]Two substantive points of jurisdiction have arisen during the course of argument at this hearing. The first is whether the claim form was issued within the prescribe period of 8 days of service of the intervention notice. The evidence on this is lacking in any real clarity. It is not at all clear whether the intervention notice was served on 11 or 13 November or at any time in-between. It was apparently sent by email on 11November, but the claimants say that that was not good service. They say that service only took effect by first class post on 13 November. At one point the SRA was asserting that the notice had been given when the intervention took effect on 12 November, although even that is now not entirely clear.[12]Mr Budworth, for the claimants, says that the court has the necessary power to extend time for issuing a claim form challenging a solicitors’ intervention under the normal Civil Procedure Rule relating to the extension of time. He relies upon obiter dictaof Woolf LJ in the case of Cove v The Law Society, decided in the Court of Appeal on 8 July 1988. In a short concurring judgment, Woolf LJ observed that paragraph 6(4) requires that the application should be made within 8 days of the service of the notice; and he added "of course those periods could be extended".[13]However, I am satisfied that that observation was entirely obiter and was made without the benefit of full argument and consideration. In a case variously described as Re: A Solicitor and as Bradford v The Law Society, decided by Robert Walker J on 31 July 1995, that judge held that the court had no implied power to extend the 8 day time limit. That view has been followed, again obiter, by Cooke J in the unreported case of Egole v The Law Society (1 November 2001) and by Geoffrey Vos QC (as he then was) in the case of Miller v The Law Society [2002] EWHC 1453 (Ch); [2002] 4 All ER 312. After a full consideration of the authorities, including Cove v The Law Society and Bradford v The Law Society, but without apparent reference to Egole v The Law Society, Mr Geoffrey Vos concluded at [36]:
“… he procedures for application to the High Court … form part of a complete statutory scheme laid down by Parliament to protect the public from errant solicitors. The scheme ensures that the intervention process is swift and that any admissible challenge by the solicitor is undertaken pursuant to a very rapid timescale. There is no express or implied power to extend the time for application to the court.”
[14]I am satisfied that that correctly represents the legal position, and that there is no power, whether impliedly or under the Civil Procedure Rules, to extend time for issue of a challenge to an SRA notice of intervention into a solicitor’s practice. On the actual facts of the present case, there is insufficient evidence before the court for it to conclude that this application was brought out of time in any event. The claim form was not formally sealed by the court until 26 November 2025. However, the evidence is that a claim form was submitted to the court on 19 November 2025. Even if the intervention notice was given on 11 November, that would have been in time had the claim form been properly presented to the court. The evidence is that it was rejected by the court because it was incomplete, in that the box on the claim form requiring the insertion of the address of the claimant, or the claimant’s legal representatives, to which documents should be sent, was blank. I note that the addresses of neither claimant appears on the first page of the claim form. The omission of the address of claimant or the claimant's legal representatives was cured in manuscript in the version of the claim form that was sealed on 26 November.[15]Whilst it was no doubt entirely appropriate for the court office to refuse to seal a claim form with no address for the claimants or their legal representatives anywhere upon it, I do not regard the omission of those items as invalidating the due delivery of the claim form to the court on 19 November. In any event, however, it is common ground that the claim form, with those details present, was provided to the court on 20 November.[16]The evidence is unclear that the notice of intervention was given before 12 November; and on that basis, delivery on 20 November would have been within the prescribed 8 day period. So, I am satisfied that the claim form was issued in time, and that the court has jurisdiction to entertain this challenge to the intervention into the claimants’ solicitors’ practice.[17]The other matter of jurisdiction that was raised before me was whether, on an application to challenge a solicitor’s intervention, the court has any power to direct the SRA to withdraw the notice of intervention subject to conditions that would operate by way of requiring undertakings from the solicitors as to the future conduct of their practice.[18]For the SRA, Mr Ahlquist submits that the court has no such power. He submits that the power to intervene is conferred by the Solicitors Act and the Administration of Justice Act, and that the court has no power to impose conditions on a solicitor’s continuing practice as a condition of withdrawing an intervention.[19]In the course of the hearing, I drew attention to the power of the court under CPR 3.1(3) to make an order subject to conditions. I enquired whether it might be possible to order the SRA to withdraw a notice of intervention, subject to a condition that the solicitor in question should offer suitable undertakings to the court as to the future conduct of their practice, with any breach punishable as a contempt of court.[20]Mr Ahlquist in response took me to the decision of the Court of Appeal in the case of Holder v The Law Society [2003] EWCA Civ 39; [2003] 1 WLR 1059. In that case the trial judge, Peter Smith J, had suggested that a receivership could have been contemplated as an adjunct to the intervention powers of The Law Society (as it then was). In the course of his leading judgment, Carnwath LJ considered this at [20]. He referred to a decision of Judge Behrens in which he had declined to follow the reasoning of Peter Smith J. Judge Behrens could not, for his part, see that the court had any power to appoint a receiver. It seemed to him that if such a power were to exist, it should be provided for by Parliament. The conclusion, at the end of [30], was that it was fundamentally wrong to consider that the court had the power to appoint a receiver in a case for which Parliament had made no such provision.[21]It seems to me that it would be wrong for the court to seek to impose additional powers, or restraints ,upon the SRA’s powers of intervention in a way not prescribed by statute. Whilst paragraph 6(5) clearly contemplates that if the court makes an order directing the SRA to withdraw an intervention notice, it also has the power to make such other order with respect to the matter as it may think fit, that would not extend to any form of order regulating the solicitor’s conduct for the future. Had Parliament contemplated such a power being exercised by the court, rather than the SRA, it would have made express provision for it.[22]So far as CPR 3.1(3) is concerned, it seems to me that this power would not extend to the imposition of conditions of a substantive nature, which are not directed to the future case management and conduct of ongoing litigation. The commentary to the current (2025) edition of volume 1 of Civil Procedure, at paragraph 3.1.14.2, seems to me to indicate that the power to make an order subject to conditions is really directed to the basis on which proceedings should be conducted in the future, rather than to matters of substantive conduct outside the court proceedings.[23]So, I do not consider that it is open to the court to order the SRA to withdraw a notice of intervention subject to any form of substantive condition governing the conduct of the solicitor’s practice in question going forward.[24]Having addressed those preliminary matters of jurisdiction, I turn to the substance of the present application. I can take the background from Mr Ahlquist’s skeleton argument.[25]Essentially, the interim forensic investigation report contains serious allegations of misconduct against Mr Farnell and his practice. These include allegations that he had dishonestly participated in what were described as ‘dubious investment schemes’, whereby investors entrusted very large sums of money to the practice, to be held in its client account, only for those funds then to be paid away to third parties.[26]The report identifies emails that were sent by Mr Farnell in which he told the investors that the funds remained held within the firm’s client account when in fact payment out of those funds had already taken place. The investigation report also identified a further case, that of Mr Freeman, where an individual had made payments in the expectation of investing in shares in a football club (although there was some issue as to whether this was a direct investment or through a company) but he had never received any shares.[27]Following the report, another investigation officer of the SRA issued the notice recommending intervention into the solicitor and his practice. Mr Farnell drafted submissions in response which formed the subject of a further notice which was considered by the adjudication panel. That resolved to exercise the SRA’s powers of intervention. It is that which is now challenged by the claimants.[28]The SRA opposes the application. It contends that there are more than sufficient grounds to suspect that Mr Farnell has acted dishonestly, and also to conclude that he has breached applicable rules of professional conduct. Given the seriousness of the concerns raised in this case, and the significant risks which Mr Farnell and his practice are said to pose, both to the public and to the profession, intervention is said to be clearly justified.[29]Intervention may be exercised if either the SRA has reason to suspect dishonesty on the part of a solicitor or his practice, or it is satisfied that a solicitor has failed to comply with rules made by virtue of various statutory provisions. Mr Ahlquist emphasises that there are two different threshold tests. In the case of rule breaches, the SRA must be satisfied that there has been a failure to comply with the rules. If, however, the question is one of dishonesty, then that does not need to be established as a matter of fact. The SRA has a power to act whenever it has reason to suspect dishonesty. Mr Ahlquist submits that that is an exceptionally low threshold. There is no requirement for a prima facie case of dishonesty, or for a good arguable case of dishonesty; the threshold is simply whether there is reason to suspect dishonesty.[30]Mr Ahlquist accepts that these powers are drastic in nature, and can have potentially terminal consequences for a solicitor’s practice. They have been described as ‘draconian’. However, it has been said that Parliament has put the SRA in a special position, conferring upon it powers to act as the guardian, not only of the solicitors’ profession, but also of the public in its interaction with solicitors. They have been described as being intended to enable the SRA to ‘nip in the bud’, so far as possible, cases of dishonesty by solicitors.[31]In his skeleton argument, Mr Ahlquist cites observations of Sir Thomas Bingham MR in Bolton v The Law Society [1994] 1 WLR 512 at page 519E to the effect that the reputation of the profession is more important than the fortunes of any individual member. Membership of a profession brings many benefits; but that is part of the price.[32]In his submissions Mr Budworth rightly made the point that those remarks were not uttered in the context of a solicitor’s intervention. That was a case concerning suspension from practice, where findings of dishonesty had already been made. In such a case, it is acceptable that personal mitigation should have little part to play in considering disciplinary sanctions. Mr Budworth urged against transposing those remarks into guidance in the case of a solicitor’s intervention.[33]Mr Ahlquist also relies upon observations of Chadwick LJ in the case of Sritharan v The Law Society [2005] EWCA Civ 476; [2005] 1 WLR 2708 at [17] to [18]. There, Chadwick LJ emphasised that:
“It is the power to intervene on suspicion of dishonesty which enables the Society to exercise control over those solicitors whose conduct might give rise to claims against the Compensation Fund; claims which, ultimately, have to be met by the profession as a whole.”
[34]Mr Ahlquist invites the court to understand intervention as a preventative measure, aimed at the protection of consumers and the interests of the profession as a whole. He emphasises that it should not be viewed as a sanction for misconduct. The question whether misconduct is proved, and what the professional consequences of any proved misconduct may be, are for the Solicitors Disciplinary Tribunal to consider, if any referral is made to it in due course. The powers of intervention, although rightly described as ‘draconian’, reflect the risk which any solicitor or firm can, if implicated in misconduct, pose to the public, and to the profession as a whole. The potentially drastic consequences of intervention should be seen and understood in that context: as a necessary incident of practising as a regulated member of the solicitor’s profession.[35]Against that background, what is the court's approach when it considers a challenge to a solicitor’s intervention? This requires the court to consider whether it should order the notice of intervention to be withdrawn. That involves a two-stage test that was first set out by Neuberger J in Dooley v The Law Society, decided on 15 September 2000. Neuberger J’s approach was endorsed by the Court of Appeal in the case of Holder v The Law Society [2003] EWCA Civ 39; [2003] 1 WLR 1059 at [15]. There, Carnwath LJ cited, and endorsed, Neuberger J's description of the role of the court:
“First it must decide whether the grounds under paragraph 1 are made out; in this case, primarily, whether there are grounds for suspecting dishonesty. Secondly, if the Court is so satisfied, then it must consider whether in the light of all the evidence before it the intervention should continue. In deciding the second question, the Court must carry out a balancing exercise between the need in the public interest to protect the public from dishonest solicitors and the inevitably very serious consequences to the solicitor if the intervention continues.”
[36]For the intervention to continue, the court must be satisfied that the statutory grounds are properly found to be satisfied. Mr Ahlquist accepts that the SRA’s view is not conclusive; but he submits that it is right for the court to have significant regard to the SRA’s own assessment of the facts; that is on the basis that the view taken by the professional body charged with the regulation of solicitor’s practices is, in itself, a relevant evidential factor to which the judge not only can, but must, have regard.[37]Mr Ahlquist also points to the fact that challenges under the first limb, in other words, the validity of the resolution itself, are rare. He says that that is unsurprising given the low threshold of the requirement only for reason to suspect dishonesty, and also because the court is entitled, and bound, to have regard to the position as it stands at the date of the hearing. The court is not required to consider the position only at the time of the decision to intervene.[38]Mr Budworth rightly points out that in the present case, no evidence has been adduced as to the position found by the intervening agent following intervention in the practice of the claimants.[39]In the present case, Mr Budworth, particularly in his oral submissions, has challenged both limbs of the SRA’s analysis. He submits that there were never any proper grounds for finding rule breaches, or for suspecting dishonesty; and, in any event, the intervention should be withdrawn as disproportionate.[40]It is common ground that whilst the underlying statutory scheme has been found to be compliant with the Human Rights Act and the European Convention on Human Rights, nevertheless, the court must focus upon the facts of the individual case. The court should not look simply at the statutory scheme itself, but should also examine the particular act or omission in question, and scrutinise that for compliance with Convention rights.[41]The court must decide whether the intervention in the present case is substantively compatible with the Convention right to property under Article 1 of the First Protocol. The court is not limited to reviewing the SRA’s decision on conventional public law grounds, considering whether it was Wednesbury unreasonable. The court must consider whether intervention was a proportionate, and appropriate, response on the facts of the present case.[42]In his skeleton argument, Mr Budworth, for the claimants, has pointed to the recent decision of HHJ Jarman KC in Santers Solicitors Limited v The Law Society [2024] EWHC 3003 (Ch) as an instructive example of the balancing exercise to be undertaken by the court.[43]At [11] of his decision in that case,

Judge Jarman stated:

“Two distinct questions arise for determination. The first is whether there was a sufficient basis to suspect dishonesty on the part of Mr Santer at the time of the intervention. If not, the notice as against him was invalid and that is the end of the matter. If so, the second question is whether with all the information that is available now the risk posed to the claimants by continuing the intervention outweighs the risk to the public by withdrawing the notice, particularly in relation to clients’ money. Most interventions result in the practice being shut down or sold. In respect of each of these questions, the SRA bears the burden of proof on the balance of probabilities.”
[44]I am not sure whether, in relation to the first step in the two-stage process under Dooley, the court should be confined to the time of the intervention. It seems to me that the court should be entitled to have regard to all the evidence that is before it, and not simply to the material that was before the SRA at the time it made its decision to intervene in the solicitor’s practice. In the present case, however, no real distinction arises in relation to the two points in time because, as I have mentioned, Mr Budworth has emphasised the lack of any detail as to what has been found since the intervention in the claimants’ practice.[45]The evidence before the court consists of the following: First, the witness statement of Mr Farnell, dated 19 November 2025, in support of his claim. Secondly, there are two witness statements in answer from the SRA. Both are dated 15 January 2026. The first is from Mr David Nix, the Interim Deputy Director of Investigations at the SRA; the second is from Mr Andrew Whitehead. He is a partner in the Commercial and Dispute Resolution Department of Stephensons Solicitors LLP, who represent the SRA.[46]Mr Whitehead's evidence addresses three specific matters, which he identifies at paragraph 4. First, the timing of the issue of the claim. I have already dealt with the issue of the claim. Secondly, developments subsequent to the SRA’s decision to intervene into the claimants’ practices, which the SRA considers relevant to the court’s consideration of the claim. As I have already indicated, these are somewhat limited in their scope. The third is briefly to summarise the SRA’s position on the issues raised in Mr Farnell’s evidence.[47]Thirdly and finally, there is a responsive witness statement in reply from Mr Farnell, dated 22 January 2026.[48]I would have wished to have reserved judgment in this case but, unfortunately, I have had to insert this hearing into my list on a day that was otherwise set aside for pre-reading for a three day trial starting tomorrow. After that has concluded, I am not sitting in Manchester again until the month of March. Therefore, regrettably, I have to deliver this as an extemporary judgment.[49]I must first consider whether the grounds for suspecting dishonesty have been made out. I emphasise that what I am concerned with are reasons to suspect dishonesty. Mr Ahlquist submits that the SRA has very strong reasons to suspect that Mr Farnell has been dishonest, both as an individual solicitor, and also as the manager of the first claimant solicitor’s practice. Those reasons are set out in detail at paragraphs 24 to 32 of Mr Ahlquist’s skeleton argument.[50]In his skeleton argument, Mr Budworth concentrates rather more about the balancing exercise. But in his oral submissions, he mounted a full frontal assault upon the SRA’s assertion that there are grounds to suspect Mr Farnell of dishonesty. Mr Budworth accepted that since the interim forensic investigation report, and the report prepared by the investigation officer recommending intervention, had been superseded by the formal decision of the adjudication panel, that should form the primary source of reference in the present case. That decision sets out the reasons why the SRA has concluded that there are grounds for suspecting dishonesty on the part of Mr Farnell. Mr Budworth criticises the SRA for not having paid sufficient attention to the terms of the relevant engagement letters.[51]Mr Budworth strongly criticises the SRA for the delay in arriving at its intervention decision. He submits that this was due to a more recent complaint from a Mr Rafael Serrano, on behalf of Safe Harbour Equity Fund, and also a misconceived understanding that the claimant’s practice did not have professional indemnity insurance whereas, in fact, this had been obtained and, when proffered to the investigation officer, received scant response in her supplemental notice.[52]Mr Budworth relies, in particular, upon concessions that he says are made, in particular, in Mr Whitehead’s witness evidence, which he says casts a different light upon two emails, one in each of the two principal cases, where Mr Farnell had mistakenly said that monies remained in the practice’s client account when in fact they did not. As Mr Whitehead recognises, the scope for mistake was present; and that is said to negate any dishonesty.[53]In his reply, Mr Budworth also emphasised evidence from Mr Farnell as to variations of the original terms of engagement, which he says had altered the basis upon which the funds were held. He submits that there has been a drastic, and serious, over-reaction which have led to the inference of dishonesty on the part of Mr Farnell, and have mistakenly led the SRA to feel that intervention was required in the interests of the public and the profession. He characterises this intervention as having been badly handled, and as involving a serious misapplication of the SRA’s draconian powers.[54]In addition to his written skeleton argument, Mr Ahlquist took me through the series of emails which led the SRA to the view that there was reason to suspect dishonesty on the part of the claimants. In the case of Dux Fortis Holdings, those emails can be found at pages 645 and 647. These should be read in conjunction with the relevant ledger entries at page 675 of the hearing bundle.[55]Essentially, analysis of those emails shows that not only did Mr Farnell falsely represent that Dux Fortis’s money was retained within the claimant’s client account, but that further emails were sent maintaining that position, notwithstanding that, simultaneously, further substantial sums were being paid out. £1 million was received into the account on 19 April 2023. On 30 May, confirmation was sought that Mr Farnell was still holding the £1 million deposit in the escrow account of IPS Law. On 31 May Mr Farnell confirmed that “funds remained held by ourselves at IPS Law and that going forward you will receive an email from me updating you every four weeks. This has been diarised from today’s date and will not be missed.” By that time, sums totalling £385,000 had already been paid out of the account.[56]Mr Farnell says that that was a mistake as a result of a failure of communication between himself and a representative of his firm. However, the important point stressed by Mr Ahlquist is that, according to Mr Farnell, that innocuous mistake was never corrected. It was followed up with other emails from Mr Farnell by which he continued to convey the impression that funds were coming back imminently, whilst at the same time funds were continuing to make their way out of the account.[57]I am entirely satisfied that there were reasonable grounds, in relation to those emails, to suspect that Mr Farnell was guilty of misleading his client as to the true position with regard to those funds. I find it impossible to conclude that Mr Farnell could have been sending out those emails honestly in light of what was taking place with regard to the ledger account at the time. Further sums were coming out of the account in substantial sums between 2 June and 14 July such that the whole of the balance of the original £1 million deposit was withdrawn from the account. There is no explanation for any of those withdrawals, consistently with what was being said to the representative of Dux Fortis at the time.[58]A similar position emerges in relation to the other complainant, Raleigh Financial Limited. Mr Budworth says that these matters could all have been resolved in a third interview; but I agree with Mr Ahlquist that it is impossible to see that that would have made any difference to the inference to be drawn that there was reason to consider that Mr Farnell was engaged in dishonest conduct.[59]Mr Ahlquist also draws attention to the contradictory terms of the original underlying loan documentation. I fully accept, as has been found in other cases, that these terms are contradictory, and open to interpretation; but that is clear on their face. It is very difficult to understand how Mr Farnell, as an experienced solicitor, could have understood the terms on which he was to be holding the monies, in an escrow account, to operate consistently with the terms of the relevant documentation. I find it difficult to see how an experienced solicitor, acting honestly, could never have asked himself, or the investing agent, how this scheme was to work, and how he could have appeared to be entirely comfortable with the arrangements. As Mr Ahlquist points out, however, it is not just the two original complainants, Dux Fortis and Raleigh Financial Limited; there are also judgments in two other cases involving Choksi and Hunt where there were similar arrangements involving Mr Farnell and which he, again, never questioned, and where similar mistakes were made.[60]I am entirely satisfied that there was, and is, good reason to suspect dishonesty on the part of Mr Farnell. I can understand why, in his written skeleton argument, Mr Budworth focused upon the balancing exercise rather than the first issue of dishonesty. Mr Budworth submits that the grounds for suspicion entertained by the SRA could never, after the lapse of two years, have justified the drastic step which it chose to take, still less the manner, and timing, in which the SRA did so.[61]I do find it difficult to understand the reasons for the delay in this case, unless this was attributable to a lack of resources. That is not suggested as the explanation in the evidence. However, the reasons that give rise to the suspicion of dishonesty also seem to me to justify the perceived need to intervene in Mr Farnell’s practice. Since, as I find, the SRA had, and has, proper grounds for suspecting the claimants of acting dishonestly in these matters, then that was sufficient to justify the drastic step of intervention in their practice. The fact that it should have been done earlier is no reason why such intervention should now be set aside.[62]I am satisfied that these were dubious investment schemes, to which Mr Farnell should not have been lending his name, his bank account, and his support. I am satisfied that the continuing risk to investors, who have still not received back their money, and potentially to others who might be approached to invest in similar schemes, fully justified the intervention in the present case, notwithstanding the drastic effect it has had upon Mr Farnell and his practice.[63]I regard the serious grounds which give rise to reason to suspect dishonesty on Mr Farnell’s part as justifying the intervention on their own. It is therefore unnecessary for me to consider whether intervention would have been justified on the grounds of rule breaches alone.[64]This is a case where, even now, Mr Farnell appears to have no insight into the serious risks faced by the third parties who invested monies through his client account. Mr Farnell appreciated that the reason for his very involvement was the semblance of respectability, and security, that a solicitor's client account would present to investors. It is somewhat inconsistent with that for him to have acted on the instructions of the investing agency. He seems to have done so without any real thought for the interests of those whose money he was holding. He seems to have done so without giving any real thought as to how the terms of the underlying investment arrangements were to operate. All of that gives rise to a good reason to suspect dishonesty; and, at the same time, to give sufficient reason, in the public interest, to justify intervention in his practice, notwithstanding its very drastic consequences.[65]So, for all of those reasons, I am satisfied that the challenge to the intervention fails. I recognise that it is for the SRA to discharge the burden of proving that there was a sufficient basis to suspect dishonesty on the part of Mr Farnell; and also that the risk posed to the public by allowing him to continue to practise outweighed the harm that would undoubtedly be caused to Mr Farnell and his practice by intervention. But I am satisfied that the SRA has discharged the burden of proof on both of those matters.[66]For those reasons I will dismiss the claim.[67]I do so recognising that there has been delay on the part of the SRA, which is not properly explained; but that is no sufficient reason for allowing the claim. That concludes this extemporary judgment.

JUDGMENT ON COSTS

[68]Having delivered my substantive extemporary judgment, I now have to deal with the question of costs. Mr Budworth does not dispute that, as the unsuccessful party, his clients should bear the costs. Nevertheless, he submits that there should be a reduction in the level of costs by way of percentage reduction.[69]He says that should reflect three matters: First, the considerable delay and relaxed attitude displayed by the SRA in bringing this intervention about in the first place; secondly, a lack of clarity over the service of the intervention notice which gave rise to a challenge in the skeleton argument as to the validity of the issue of the claim form in terms of the 8 day time limit; and thirdly, a lack of evidence of the current position in the intervention.[70]I am satisfied that none of those matters, whether viewed individually or cumulatively, should justify a percentage reduction in the award of costs. I do not see that the considerable delay in the intervention itself impacts upon issues of costs. The lack of clarity over service of the intervention notice has made no material contribution to the costs incurred by either party; and, as Mr Ahlquist points out, the position in the intervention was not a matter sought to be raised in evidence by Mr Farnell.[71]I am entirely satisfied that the hourly rates are more than reasonable. They are well within the guideline hourly rates for National 2, no doubt because of special arrangements for bulk work made between Stephensons and the SRA. I am satisfied that there has been an appropriate division of work between different grades of fee earners, and that may contribute, in part, to the number of hours, in particular spent on work done on documents.[72]It does seem to me that the number of hours may have been a trifle excessive; and I had been considering the need to make a modest reduction to the solicitors’ element of the cost statement. It does not seem to me that there should be any impact upon counsel’s fees, or upon the court fee, or travelling. However, Mr Ahlquist points out that this costs statement is dated 22 January, and it therefore does not take account of developments, and further filings, over the weekend or address those.[73]Therefore, the view I take is that there should be some small reduction in the solicitors’ element, but less than I had originally had in mind in view of the date to which the costs statement runs.[74]Doing the best I can, and adopting a very broad brush approach, in particular to the amount of work done on documents, and bearing in mind that the solicitors’ element in total amounts to only some £16,754, it seems to me that only a modest reduction is required. Inclusive of VAT, I would propose to apply a reduction of £1,000, which means that the costs will be summarily assessed in the total sum of £39,989.17.

JUDGMENT ON PERMISSION TO APPEAL

[75]It seems to me that those are matters that do not give rise to a real prospect of success on appeal. So far as the other compelling reason is concerned, it seems to me it is really a matter for the Court of Appeal to decide whether they consider that it is a matter they would wish to reconsider after this interval of time, or, in the case of the limit of the court’s powers to make an order, to consider, if necessary, for the first time.[76]So, I refuse permission to appeal. I also bear in mind that the claimants are likely to wish to seek expedition of any appeal because of the continuing impact on the practice; and it may therefore be more time-effective if I refuse permission to appeal because the claimants will need to make a speedy application to the Court of Appeal for permission to appeal, and can ask for expedition with that; but that is not my reason for refusing permission although it is a pragmatic reason for leaving it to the Court of Appeal. Epiq Europe Ltd hereby certify that the above is an accurate and complete record of the proceedings or part thereof. Lower Ground, 46 Chancery Lane, London WC2A 1JE Email: civil@epiqglobal.co.uk