A law firm referred to the Solicitors Regulation Authority (SRA) by the Court of Appeal earlier this year has been shut down by the regulator.
Neumans, a City firm specialising in criminal law, had a further office in Manchester, and, according to the Law Society website, employed 20 solicitors before it was shut yesterday.
The SRA said there was “reason to suspect dishonesty” on the part of Nabeel Sheikh, described on the firm’s website as its “former senior partner and founder (now retired)”, and on the part of the firm itself, “on whose behalf Mr Sheikh acted”.
The regulator said the law firm had also failed to comply with other, unspecified professional rules.
City firm Devonshires has been appointed as the intervention agent.
It is not clear whether the intervention is the direct result of the referral by the Court of Appeal to both the SRA and the Director of Public Prosecutions (DPP).
The move came after the court ordered businessman Hitendra Patel and the law firm to repay interim costs of £500,000, on a joint and several basis, to the Lord Chancellor at a hearing in December last year.
The Court of Appeal allowed an appeal by Mr Patel back in 2009 against two convictions for marketing a medicinal product without holding a European Community or UK marketing authorisation.
Lord Justice Simon said that, following Mr Patel’s successful appeal and a defence costs order (DCO) in his favour, Neumans submitted a bill of costs to the Court of Appeal in 2011 for £2.9m plus VAT.
An interim payment of £500,000 on account was made out of central funds to Neumans.
Simon LJ said he was concerned that an agreement made between Mr Patel and Neumans in 2009 “and what happened in relation to the preparation of the invoice and bill of costs might have been a sham which had been designed to obtain out of central funds a sum far larger than otherwise be due in the event the appeal succeeded”.
Simon LJ said the Court of Appeal responded by asking the Registrar of Criminal Appeals to carry out an investigation, which he did between 2012 and 2015, the delay caused by various factors.
He said the registrar’s report concluded that “very large sums had been claimed on a false basis” and that 2,783 hours out of a claimed 3,047 hours were “not properly recoverable”.
The Court of Appeal said both Mr Patel and Neumans accepted that the original costs order should be revoked and ordered them to repay the £500,000 on a joint and several basis.
Mr Sheikh, then senior partner of Neumans, told Legal Futures in January: “We have no comment to make save to say Neumans LLP denies any wrongdoing.”
A spokesman for the SRA said the regulator could not comment beyond the decision notice published on its website.
A spokesman for the Crown Prosecution Service said he could not confirm what action, if any, the DPP had taken.