High Court action has begun against solicitors at a firm closed by the Solicitors Regulation Authority last year for alleged dishonesty. 

In July the SRA closed Deidre Newell-Austin’s firm Austin Law citing ‘reason to suspect dishonesty on the part of Ms Newell-Austin’, under paragraph 1(1)(a) of Part I of Schedule 1 to the Solicitors Act 1974. The regulator now says it has received applications for £3.6m, which is apparently missing from client accounts.

Over the weekend, national newspapers reported that Newell-Austin was believed to be abroad.

Essex commercial and personal firm BTMK, acting for Zangir and Nazmin Mehrban who say that £410,000 they paid for a house purchase never reached the vendors and they now face repossession, froze Newell-Austin’s assets last year. It has brought High Court cases against two solicitors formerly employed by the firm. They deny any involvement.

Nitin Khandhia, a partner at BTMK, said he is aware of one other parallel private action against Austin Law by a bank in Manchester. There are ‘undoubtedly' other clients affected, he said.

Newell-Austin has denied any wrongdoing.

Khandhia said a decision was imminent as to whether the Mehrbans will be entitled to help from the Compensation Fund. 

An SRA spokesperson said: ‘Since we closed the firm down, we have been conducting further investigations to see if further disciplinary action is needed. If we decide this is the case, it will become a matter of public record.

‘As we said at the time of closure, dishonesty was suspected and cited as the reason for our action, which was taken to protect the interests of clients.

‘We have liaised closely with the Metropolitan Police Service on this matter and shared all relevant information with them.’