A solicitor has won a High Court battle to prove he was an employee and not a partner at a firm subject to legal action. 

The High Court (Chancery Division) ruled that Clive Prior, formerly head of the property department at London practice Needleman Treon, should not be included in a claim against the firm.

Two claimants allege that they provided finance to the firm for short-term bridging loans that have not been repaid. In total they advanced more than £1m between 2005 and 2008 and they now seek damages and restitution from former partners on the basis of alleged breaches of contract, trust and duty.

The firm was dissolved in 2012 after an intervention the previous year by the Solicitors Regulation Authority. 

Following a two-day hearing at the Solicitors Disciplinary Tribunal in 2011, equity partners Andrew Needleman and Saroop Treon were each found to have breached the solicitors’ code of conduct and were fined £15,000 and £25,000 respectively.

The court heard that Prior joined the firm’s property department in 2008 on a £100,000-a-year salary and bonus package. The claimants argued that Prior was held out to be not only a specialist conveyancer but also a partner of the firm and was listed as such on the firm’s notepaper from October 2008.

Prior insisted that he had stated on several occasions that his status was that of an employee. This position was backed by an employment tribunal after he parted company with the firm in January 2010.  

The tribunal found by unanimous decision that Prior had been unfairly constructively dismissed and awarded him £88,529 in compensation.

Prior said that the tribunal had acted on the premise that he had been an employee.

At an earlier hearing a judge had concluded there was no real prospect of the claimants establishing that Prior was a partner.

Summing up in the High Court, the Hon Mr Justice Barling (pictured) said it was ‘clear beyond any reasonable question’ that Prior’s letter offering him a job was one of employment as the head of the firm’s property department.

He said the language of the letter, which referred to ‘your employment’ and the need to agree holiday times ‘with a partner’ reflected ‘unequivocally’ an employer/employee relationship.

Barling concluded that there was ‘no real prospect’ of the claimants succeeding against Prior at a trial on the pleaded case or on the alternative unpleaded claim.

He also refused permission to appeal, and refused any application to re-amend the amended particulars of claim.