Tribunal throws out solicitor’s claim based on sale of practice

Tribunal: No jurisdiction over agreement

An employment tribunal has struck out a solicitor’s breach of contract claim based on a business agreement to transfer his practice to another firm, which was then to employ him.

Employment Judge Shotter said the tribunal did not have jurisdiction over such an agreement and, in any case, it was superseded by an oral contract once the law firm discovered that he was subject to restrictions imposed by the Solicitors Disciplinary Tribunal (SDT).

The SDT fined Asghar Ali £35,000 in May 2021 after finding he turned “a wilful blind eye to the obvious suspicious circumstances” of dozens of virtually identical personal injury claims.

Mr Ali’s law firm, AA Solicitors in Bolton, had already closed at the end of the previous year because the SDT proceedings meant he could not secure professional indemnity insurance.

The SDT also imposed conditions meaning that he could not practise on his own or as a partner and could not work as a solicitor without Solicitors Regulation Authority (SRA) approval.

In April 2021, the agreement to sell AA Solicitors to Clearwater Solicitors, including goodwill and a lease, was signed. It provided that Mr Ali would work at Clearwater, either as an employee or self-employed consultant, for a minimum of four years in a supervisory role as well as some fee-earning.

It was only in May 2021 that Clearwater discovered that AA Solicitors had closed in December 2020 and no longer existed as a business entity. It took the view that the business agreement was frustrated.

Further, with Mr Ali’s employment now subject to SRA approval and him unable to take on the supervisory role, the parties agreed that he could not work as previously agreed.

Judge Shotter found that they entered into an oral agreement to employ Mr Ali as an assistant conveyancing solicitor under significant restrictions, including close supervision.

The SRA approved this in September 2021 and Mr Ali began work on 1 October. But “there were concerns about him”, the judge recounted, and he resigned the following March having found another job.

His unfair dismissal claim was struck out earlier in proceedings because he did not have two years of service, leaving a breach of contract claim exceeding £300,000, even though the employment tribunal limit is £20,000.

In striking out that claim too, Judge Shotter held that she had no jurisdiction over the business agreement, “bearing in mind it relates to the sale and purchase of AA Solicitors and there is no guarantee the claimant would have started work as an employee as opposed to a self-employed contractor at the start date on 14 June 2021”.

She continued: “I did not accept the claimant’s argument that he personally was AA Solicitors and the first respondent was essentially purchasing him and not the limited company AA Solicitors Ltd, bearing in mind that AA Solicitors Ltd were no longer trading and another firm of solicitors had taken over the files and some of the staff…

“The reality is that the business agreement was superseded by the oral agreement to employ the claimant on completely different terms, which the claimant accepted.”

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