The Solicitors Regulation Authority has been slapped with a £63,000 costs order after conducting a failed prosecution described by the tribunal as ‘inadequate, wrong’ and ‘shambolic’.
The Solicitors Disciplinary Tribunal found no case to answer against Nabeel Sheikh over the costs incurred and claimed for following a criminal case handled by his firm.
Sheikh’s London firm Neumans LLP, where he was senior partner and compliance officer, was shut down in July 2017 over suspected dishonesty.
But when it came to the SRA’s subsequent prosecution of Sheikh, the tribunal found the SRA had failed to undertake an independent investigation, failed to speak to potential key witnesses and failed to adduce expert evidence as to the proper amount of costs.
Ordering the SRA pay Sheikh’s costs, the tribunal added: ‘The [SRA] was under a duty to investigate and to ensure that only allegations that were supported by the evidence were placed before the tribunal. It failed to do so in relation to these proceedings.’
The case related to a client who faced 14 criminal charges including two related to offences of placing a medicinal product on the market without authorisation. The client was convicted of two, fined £500 and made subject to a confiscation order totalling £211,604. The Court of Appeal later quashed the conviction and granted his application for a defendants’ costs order (DCO), allowing him to recover his legal expenses in full from central funds.
The SRA alleged that Sheikh’s firm, previously known as Sabir Selby, had misled various parties, including the court, into believing he had agreed to limit charges to £275,000. He later presented a bill of costs to the Court of Appeal seeking payment of £2.9m. The SRA alleged some claims did not reflect the work actually undertaken.
Invited by the Court of Appeal to investigate, Master Egan concluded there was 'clear evidence’ to support a case of fraud, based on what he described as false claims for 2,783 hours’ Crown court preparation. The Court of Appeal subsequently revoked the DCO and ordered Sheikh to repay £500,000. Master Egan referred the matter to the SRA.
Neumans did not accept Master Egan’s criticism saying his allegation of false claims was misconceived. The firm submitted that it received advice from specialist costs counsel and advised the client to take independent advice.
Before the tribunal, Sheikh said Master Egan’s report was no more than an opinion, and his stated role was investigator, not fact finder. The investigation was document-based and examined no witnesses, and the police, having been notified of the fraud suspicion, opted not to arrest or even interview Sheikh.
He submitted that the SRA carried out no independent investigation of the allegations and had called no witnesses of fact or expert evidence.
The tribunal found no case to answer on any charges, saying it had received no evidence from the SRA as to what costs it considered to be ‘properly due’. Instead, the tribunal was invited by the SRA to draw ‘inferences’ from Master Egan’s investigation.
It was found the SRA failed to produce any evidence that Sheikh claimed for work that was not undertaken.
Following publication of the judgment, an SRA spokesperson said: 'We are reviewing the judgment and considering next steps.'