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Police called in stand-off over ownership of law firm

RCJ [1]

Sir William: matter resolved by “everyone leaving the building”

A High Court judge has described how locks were changed and the police called in an extraordinary stand-off over the ownership of a law firm.

Sir William Blackburne said “matters came to a head” when Andrew Williams, one of the members of Lillywhite Williams LLP, concluded that it “was no longer safe” to allow the new manager, Naresh Chopra, into the firm’s offices unattended.

Mr Chopra responded by turning up at the firm’s offices in Dagenham, and telling Mr Williams and his colleague Ian Lillywhite that they were no longer members of the LLP and “that he, Mr Chopra, now owned the LLP”.

Sir William said Mr Chopra had filed a return at Companies House removing the two men as members. It was not clear how Mr Chopra achieved this, but the evidence was that it had happened without the knowledge of and “much less, approval” of Mr Williams or Mr Lillywhite.

“The disclosure led to a stand-off. The police were called. Eventually the matter was resolved by everyone leaving the building. Mr Chopra made no attempt to return.”

Sir William, said “other facts about Mr Chopra’s regulatory record then emerged”. The Solicitors Regulation Authority (SRA) was already investigating his firm, Nationwide Solicitors LLP, and “about this time” began its investigation into Lillywhite Williams LLP.

The court heard that the two firms had signed an agreement, which Sir William described as “in effect a merger of the activities” of the practices.

The SRA intervened into both firms [2] in October last year, and Mr Chopra’s practising certificate was suspended. However, a spokesman for the SRA said yesterday that Mr Chopra’s PC was restored in June this year, subject to conditions, including that he is not allowed to be a sole practitioner, owner or manager of an authorised body.

The High Court heard in Williams v the Law Society (SRA) [2015] EWHC 2302 (Ch) [3] that Mr Williams and the SRA agreed a consent order in December 2014, under which the intervention was withdrawn as regards his practice (but nobody else’s), and the suspension of Mr Williams’ PC was set aside.

Sir William explained that the SRA decision triggering the interventions contained the “usual term” regarding sums of money which vest in the Law Society and are held on trust under the Intervention Powers (Statutory Trust) Rules 2011.

The judge said the issue then arose as to whether the statutory trust applied to both Lillywhite Williams LLP and to Lillywhite Williams & Co, the former partnership which existed prior to the firm’s conversion to LLP status in February 2014.

Mr Williams argued that it applied only to the LLP, and that, as a result, the bulk of a payment of over £62,000 from the Legal Aid Agency (LAA) was due to the partnership. Sir William said the SRA had now agreed to release two payments of over £22,000.

However, Sir William rejected the solicitor’s argument that the statutory trust did not apply to the former partnership. Instead he agreed with Tim Dutton QC, counsel for the SRA, on the meaning of the expression ‘practice’, so that the money paid by the LAA to the regulator was caught by the statutory trust.

Sir William said the ‘practice’ of the LLP included the practice previously carried on by the partnership, and that practice did not “suddenly come to an end” with the conversion to an LLP, but those activities were continued the next day “exactly as before”.

The judge ruled that, since Mr Williams had now received the money due to him from the LAA, no “substantive relief” was needed and there remained only the question of costs.