Hi 'Oatway'
I've found the answer to my own question. James was not paralyzed from birth. FindMyPast has, in their Crime, Prison & Punishment set an Habitual Criminals Register for 1890. This is where I found the information about his paralysis. Then, Ancestry has 'London, England, selected Poor Law and Settlement Records, 1698 - 1930. There you will find an Examination and Orders of Removal for James Oatway alias Tarrant to be moved from the workhouse in Bethnal Green and transferred to St Leonards, Shoreditch. In the Examination it states that James enlisted in the army, Worcestershires, in 1874 and was discharged 12 years later in 1886. It also mentions the paralysis, as well as the fact that our man has spent 2 years in Liverpool.
Back to FindMyPast where in their Military, armed forces & conflict set, there are the attestation and discharge records for James Oatway who served 12 years in the 29th and 36th Foot, Worcestershire Regiment. He was not medically discharged. He came out because he had served his agreed term of 12 years.
I have just spent the last 2 hours trawling the British Newspaper archive, but I can't find any news item about him that would explain the paralyzed left side. Nor any further law breaking!
Best wishes
Lyn