The law firm Leigh Day is being prosecuted by the Solicitors Regulation Authority for shredding a crucial document which could have impacted on a multi-million pound inquiry into claims that British soldiers abused Iraqi civilians. The firm faces unlimited fines and its Senior Partner could be struck off if the allegations are upheld.

International litigation specialists Leigh Day acted for nine Iraqis who claimed that British troops tortured them in the wake of a 2004 battle, and that the soldiers murdered other detainees. Their allegations resulted in the government's Al-Sweady inquiry, which cost £31 million and ran for five years. In 2014, inquiry chair Sir Thayne Forbes concluded that the Iraqis' claims were "wholly and entirely without merit or justification”, and the result of “deliberate lies, reckless speculation" and "ingrained hostility” towards the British military.

The Ministry of Defence has alleged that late in the inquiry it emerged that Leigh Day could have prevented the whole expensive exercise. In 2007 the firm was handed a document called the 'OMS Detainee List' which showed that its clients were in fact armed members of a militia and not the innocent civilians they had claimed to be. Leigh Day failed to disclose the original, handwritten translation of the document and in 2013 when the inquiry asked the firm if it had any information relevant to the investigation, Leigh Day associate Anna Crowther arranged for it to be shredded.

A gentle fisherman, yesterday

The firm is also accused of paying £75,000 in referral fees to an Iraqi fixer to pass on Iraqi claims. Leigh Day, its Senior Partner Martyn Day and partner Sapna Malik are alleged by the SRA to have:

• Held a 2008 press conference improperly alleging that the British Army had unlawfully killed, tortured and mistreated Iraqi civilians
• Failed to identify the significance of the OMS Detainee List
• Failed to provide the OMS Detainee List to third party firms, the court and the inquiry
• Improperly made and maintained allegations of unlawful killing, torture and mistreatment
• Entered into a prohibited and improper fee-sharing arrangement with an individual, “Z”, authorising the payment of referral fees totalling £75,000
• Concealed and failed to report the regulatory breach by Z

The stink has reached government, with Defence Secretary Michael Fallon falling over himself to pronounce the charges "extremely serious" and to praise British troops. “Everyday our Armed Forces show bravery and dedication in difficult circumstances", said Fallon. "They shouldn’t be subject to unfounded legal claims”.

A spokesman for Leigh Day said, "We have now been served with a formal set of charges based on some 30 files of material. Our legal team has now started the process of reviewing all that evidence. The matter is now formally before the Tribunal so it would not be appropriate for us to comment further". In the meantime, the firm has removed Crowther's details from its website, presumably after she received a flood of abuse from enraged squaddies and Daily Mail readers.