The High Court has refused to overturn a Solicitors Regulation Authority intervention into a firm and its former director who were suspected of dishonesty.

London firm Neumans LLP had appealed against its effective closure last month on the basis that the individual at the centre of allegations, Nabeel Sheikh, had left the business two weeks earlier.

But Mr Justice Newey said this resignation had the 'air of a last throw of the dice' and came after Sheikh's solicitors had been supplied with an intervention report.

Neumans was referred to the SRA by Lord Justice Simon last December following a Court of Appeal ruling in relation to a bill of costs for criminal representation. The firm and a former client were jointly ordered to repay £500,000 to the lord chancellor as an interim payment by 23 January.

At a hearing on 21 July, the firm offered evidence to say a solicitor and barrister were to be brought in as compliance officers and given voting rights, the firm was not reliant on Sheikh’s clients, and its remaining member, Sheikh’s wife Sarwa Sabir, was in charge of the firm and could run it without outside influence.

The SRA maintained that the intervention should continue on the basis that Sheikh was not able to sever links with his old firm easily. The regulator pointed to Neumans’ website, which nine days after Sheikh’s resignation published extensive details of his experience and saying he enjoyed a reputation as an ‘internationally renowned lawyer’ and former senior partner and founder of the firm. In contrast, Sabir's entry read simply: 'Profile to follow'.

In Neumans v The Law Society (The Solicitors Regulation Authority), Mr Justice Newey said if Sheikh had not resigned before the intervention he would have had 'no hesitation' in saying the intervention should stand, particularly given his influence within the firm and his 50% interest. Newey said there was 'very good reason' to suspect Sheikh of being complicit in a serious fraud involving large sums of money.

Newey said Neumans had made 'common cause' with Sheikh and the firm had made no attempt to distance itself from him when judges made previous complaints about his conduct.

Even with serious allegations hanging over him in 2016, Sheikh was allowed to continue as the firm's compliance officer. Until recently, added the judge, there was no indication of the firm or Sabir separating themselves professionally from Sheikh. 'In all the circumstances, it seems to me that the risks attached to withdrawing the intervention outweigh those of continuing it,' said Newey, who added that the original intervention had been 'rational and proportionate'.

Fenella Morris QC, instructed by RadcliffesLeBrasseur, represented Neumans; James Ramsden QC and Sarah Bousfield, instructed by Capsticks, acted for the SRA.