A solicitor who worked for a firm involved in ‘significant and systematic’ mortgage fraud has been told she cannot claim indemnity insurance—though a High Court ruling dismissed claims that she dishonestly referred to herself as a partner. Shirin Rahim was told that her dishonesty prevented her from pursuing a claim against Arch Insurance Co.

Rahim is facing two claims by Barclays, both exceeding £2m, and another for £300,580 from Heritable Bank due to her alleged involvement in the mortgage fraud, which occurred while she worked at O’Sullivan Last & Co.

Those claims, filed in 2012, did not say that Rahim was personally involved but included her because she was named as a partner at the firm and should be held liable. Rahim, now 60, sued Arch after it said that it should not be liable to indemnify her for those claims on account of her own dishonesty.

Woking and Wimbledon-based O’Sullivan Last & Co and its owner Shariful Islam misled lenders into making mortgage advances based on a sale price that was higher than the true price. Islam was struck off after being found guilty of numerous offences. He was jailed for four years earlier this year.

Rahim was fined £2,000 by the Solicitors Regulation Authority in 2014 after she was found to have failed to disclose material information to clients.

Arch claimed Rahim had committed dishonest and fraudulent acts and asked whether she had dishonestly held herself out to be a partner. Although Rahim was made a partner in 2005, shortly after joining the firm, her remuneration did not change and she was referred to as ‘partner’ only on the firm’s notepaper.

In yesterday’s judgment, the Queen’s Bench Division at the High Court said Rahim ‘knew perfectly well that she was part of a significant and systematic mortgage fraud’ but dismissed claims of dishonesty relating to her job title.

His Honour Judge David Waksman QC said that Islam had made Rahim partner so that lenders would deal with the firm, as they would not engage with sole practitioners. He said she ‘had reluctantly’ agreed to being made partner to keep her job.

Waksman said it would be ‘wrong not to express sympathy for Rahim’ who he said was ‘sure would have preferred to work elsewhere’. However this could not affect the question of her own dishonesty, 'which I have determined against her'.