Suspected ‘sophisticated fraud’ at PM Law
The body that regulates the solicitors’ profession in England and Wales has found that as much as Stg £39.5 million could be missing after the collapse of PM Law.
The Solicitors Regulation Authority (SRA) intervened in February to protect clients’ interests after the PM Law network of firms closed unexpectedly.
In an update on its ongoing investigation, it said that the case involved “a sophisticated suspected fraud, involving the improper removal and misuse of around £39.5 million of client funds”.
The SRA described its intervention into PM Law as one of the largest and most complex it had ever undertaken.
The PM Law group was made up of 11 companies, 25 offices and more than 30 trading names spread across Yorkshire, Cumbria, Berkshire, Derbyshire, and London.
£9.3 million paid out
The regulator said that, up to Friday 17 April, 92 claims worth just over £9.3 million had been paid to former clients from its compensation fund, which provides safeguards to members of the public who lose money when a law firm closes.
A further £6.8 million has been paid out from money held within the firm at the time the SRA stepped in.
The authority is continuing to handle hundreds of further claims to its compensation fund.
It estimates the total value of these potential claims to date – including those already paid out – at just over £21.5 million, but it has warned that this figure may increase further if, and when, more applications come forward.
Extra staff
“Some of those affected were in the process of buying or selling a home, facing the risk of collapsed moves, or losing their deposits. Others were dealing with delayed probate matters, often while managing bereavement and outstanding estate administration,” said the SRA’s Paul Hastings.
The regulator says that it has moved extra staff into its compensation-fund team to deal with the PM Law claims.
Law Society of England and Wales chief executive Ian Jeffery said that his organisation was encouraged that the SRA had acted with openness and transparency on the issue.
“However, a case this large, coming so soon after Axiom Ince and SSB Group, reinforces the need for the SRA to focus on their core regulatory role and deliver the changes needed to reduce the risk of future large-scale collapses and rebuild consumer confidence,” the England-and-Wales Gazette quoted him as saying.