Criminal firm closed over suspected dishonesty

Criminal law specialists Neumans has been closed by the Solicitors Regulation Authority over suspected dishonesty by its founder and former senior partner, Nabeel Amer Sheikh.

Mr Sheikh and the boutique City law firm, which also has an office in Manchester, are the subject of interventions by the regulator because ‘there is reason to suspect dishonesty’ over the firm’s failure to comply with the Administration of Justice Act 1985.

London-based Devonshires has been appointed as the intervening agent. No further details about the SRA’s investigation were given.

Neumans was founded in 2005 and employed 35 lawyers, its website had said. Accounts filed at Companies House say the firm had more than £2m in assets as at 31 March 2016.

The SRA’s intervention comes several months after the Court of Appeal referred Neumans to the regulator – and director of public prosecutions – in a hearing last December.

In R v Patel [2016] EWCA Crim 2001, Lord Justice Simon, sitting with Mr Justice Hickinbottom, ordered the firm and former client Hitendra Patel to jointly repay the Lord Chancellor £500,000 that had been paid out of central funds.

In 2009, Neumans had acted for Mr Patel in successfully overturning two convictions in the Court of Appeal for marketing a medicinal product without holding a European Community or United Kingdom marketing authorisation.

In June 2011, Neumans handed Mr Patel an invoice for the pre-tax sum of £2.9m and later submitted a costs bill to the Court of Appeal based on this figure. Later that year an interim payment of £500,000 was made out of central funds to the firm.

However, in the course of subsequent assessment, it came to light that Neuman’s costs bill was based on an agreement to increase the level of fees charged by the firm.

Mr Sheik and Mr Patel had made an oral agreement in 2007 that the solicitor’s fees would be capped, but in March 2009, there was another oral agreement to vary this cap due to a ‘huge improvement’ in Mr Patel’s finances.

Lord Justice Simon said ‘the court was concerned that the March 2009 agreement and what happened in relation to the preparation of the invoice and bill of costs might have been a sham which had been designed to obtain out of central funds a sum far larger than otherwise be due in the event the appeal succeeded’.

The court had directed the registrar of criminal appeals to consider whether there had been any deliberate deception and they concluded, among other findings, that only 269 hours out of the 20,147 hours claimed were genuine claims –under 9 per cent.

The registrar went on to conclude that the invoice for £2.9m plus VAT was dishonest and designed to procure payment out of central funds of more than Mr Patel was entitled to.

Lord Justice Simon accepted the Lord Chancellor’s request for the defence costs order to be revoked and said Mr Patel and Neumans were ‘jointly and severally liable to repay the sum of £500,000’.

Matthew Rogers is a legal reporter at Solicitors Journal

matthew.rogers@solicitorsjournal.co.uk | @lex_progress