The Law Society of England And Wales v Shah

A regulator has no inherent general power to restrain public wrongs within its regulatory sphere. Such relief requires an applicable statutory power, unless a private law right is established. Section 41(4)(c) of the Solicitors Act 1974 confers a sufficiently broad power to make an injunction directly against a struck-off solicitor whose involvement causes an authorised body to breach the regulatory regime. The power may restrain conduct which would constitute criminal offences, because the power is statutory. The court should not make a positive finding of criminal liability on untested evidence in civil proceedings, but may act quia timet where the evidence establishes a real danger of future offending or regulatory breach.

The Law Society sought a permanent injunction against a struck-off former solicitor. An interim order had prohibited him from holding himself out as a solicitor, undertaking reserved legal activities through an SRA-authorised body, or being employed by, remunerated by, managed by or controlling such a body without permission. The Society also sought further disclosure by affidavit and publicity for the order.

The defendant denied wrongdoing and challenged the Society’s standing and statutory powers. The central issues were whether the Society could invoke the court’s inherent or supervisory jurisdiction, whether any statutory provision authorised the relief, and whether the evidence justified final protective orders.

1. Relief granted. The court was prepared to grant the injunctions and a further affidavit order, subject to agreement and approval of the precise terms. Publicity and consequential matters were to be heard separately.
2. The Law Society acts in both public and private capacities. Its public regulatory role does not itself create a general common-law power to enforce the criminal law or restrain public wrongs. Gouriet v Union of Post Office Workers [1978] AC 435 required the question to be resolved by statutory construction, subject to any established private law right.
3. The supervisory jurisdiction under section 50 of the Solicitors Act 1974 was not available on these facts. The evidence showed only a prima facie case that the defendant may previously have pretended to be a solicitor, not proof to the civil standard that he had done so. The court declined to extend the reasoning expressed obiter in Assaubayev v Michael Wilson & Partners Ltd [2014] EWCA Civ 1491 to such a quia timet case.
4. Section 41(4)(c) was construed broadly and purposively. Although sections 41(4)(a) and (b) concern orders against the defaulting solicitor, paragraph (c) permits an order in the matter and is wide enough to restrain the struck-off person whose involvement has caused the statutory breach. This construction advances public protection and does not infringe the rule in Gouriet, because the power is statutory.
5. The evidence established that the defendant had assumed a management role in the firm, including influencing recruitment, advising on complaints and premises, working from the offices, and preparing legal documents. It established a real danger of future criminal or regulatory breaches, but the court made no positive finding that a crime had already been committed because the allegations had not been tested in cross-examination.
6. Paragraph 16 of Schedule 1 to the Solicitors Act 1974 was insufficient: the present relief was not reasonably necessary to facilitate the intervention, which had already been effected. Section 37 of the Senior Courts Act 1981 was procedural and supplied no free-standing cause of action. The alternative private-law and conspiracy arguments were unnecessary to decide and would not, on the material before the court, have justified relief.