The recent case of The Law Society v Shah provides a good example of how the diverse legal market poses significant challenges to regulators. Mr Shah is a struck off solicitor after being involved in events of some note that led to the profession as a whole having to pay £12 million in compensation fund payments to clients. After some years he had started again to become involved in a legal practice and the SRA was understandably concerned at the risks that entailed to the public. Section 41 of the Solicitors Act 1974 is intended to ensure that struck off solicitors are not employed by solicitors without regulation by the SRA. However, these provisions are cast in what now seem old fashioned terms as they relate to employment and remuneration. What happens when someone like Mr Shah is not employed but just sort of hangs around. These types of looser arrangements are increasingly common in the legal market. Nothing in the SRA's statutory scheme expressly covers this scenario. There was clearly a need to “do something” and the obvious way to do that is to ask a judge. The case was rightly reported in the legal press as a victory for the SRA as they got the order they sought. This was based upon a wide interpretation of Section 41 of the Solicitors Act in giving the court jurisdiction to make an order. However, before reaching this conclusion the judge, Mr Tim Kerr QC, dismissed a number of alternative arguments for an injunction which were based on the inherent jurisdiction of the court to make an order in such circumstances. So if it was not for the Section 41 point the SRA would have come away empty handed and the public risk presented by Mr Shah would have continued.So what you may ask? Well there likely to be plenty of other scenarios that do not involve a struck off solicitor and therefore where a wide interpretation of Section 41 does not provide a way for the court to help.
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