Investigating alleged ‘misappropriation of client money’
The Solicitors Regulation Authority (SRA) is investigating a “potential fraud” at a major regional law firm that abruptly shut down earlier this month without warning.
Sheffield-based PM Law, which employed more than 600 staff and operated a network of high street brands specialising in conveyancing and personal injury, closed its doors on 2 February. The SRA said it was alerted to the closure first by the firm itself and then by concerned clients on the same day.
The regulator intervened two days later, appointing Gordons LLP as its intervention agent. Gordons has since taken possession of all files and funds held by the firm, including client money, and is now working through what the SRA described as “tens of thousands of files” to identify and contact those affected.
Jonathan Peddie, the SRA’s executive director of legal and enforcement, confirmed the regulator is looking into “a potential fraud, including the misappropriation of client money”. He added that information had been shared with law enforcement agencies.
Peddie said the investigation is focused on establishing what occurred, how it happened and who was responsible, and warned that enforcement action would follow against anyone found to have been involved in misconduct.
The SRA has directed affected clients to its compensation fund, which exists to reimburse those owed money by regulated firms and is financed through annual contributions from solicitors and law firms.
The regulator said it has already made several emergency grants to allow clients who had exchanged contracts to complete their house moves, and has received more than 80 applications to the fund so far.
The sudden collapse is likely to draw comparisons with previous high-profile firm failures, including Axiom Ince in 2023, which saw more than £40 million paid out to clients.
Ian Jeffery, chief executive of the Law Society of England and Wales, said the SRA’s update “shows the seriousness of the situation facing clients” and urged the regulator to act quickly to give consumers and the profession confidence.
He added that the SRA “must move quickly with its investigation” and that the Law Society was “encouraged that the SRA in this case is at least acting with greater openness and transparency”.
Jeffery said it was important that the regulator applies lessons learned from the Axiom Ince and SSB Group cases “in understanding and managing key risks effectively, as well as ensuring that clients are not left in legal limbo and out of pocket”.
The SRA said it would not comment further while the investigation remains live.