PM Law: SRA confirms it is investigating £39.5m suspected fraud
The Solicitors Regulation Authority (SRA) has said that its investigation into the sudden closure of PM Law involves a “sophisticated suspected fraud, involving the improper removal and misuse of £39.5m of client funds”.
An SRA spokesman said the intervention into PM Law is one of the largest and most complex ever undertaken by the SRA.
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.
In early February, clients of the Sheffield-headquartered PM Law group found that its offices had been shut without warning. These included an office in Ilkley, West Yorkshire, where a sign attached to the door said: “Due to regulatory matters, the PM Group businesses carried out within this building can no longer trade.” According to a recent post on Linkedin, PM Law Group, which was formed in 1990, had grown to a combined group of more than 600 people across a number of specialist businesses.
In an update on April 21, the regulator said it was continuing to contact and support thousands of former clients of PM Law impacted by the firm’s sudden closure.
The SRA said that 92 claims, totalling £9.31 million, have been paid to former clients from the SRA Compensation Fund.
A further £6.8 million has been paid out from money held within the firm at the time the SRA intervened and 25,000 emails or letters have been sent to people identified from the seized files as having live matters. A further 17,000 enquiries have been dealt with and 9,300 live files have been returned to clients, with a further 20,000 transferred in bulk to insurer clients.
The statement added: “The SRA is continuing to handle hundreds of further claims to its compensation fund. The total value of these potential claims to-date, including those already paid out, is an estimated £21.52m. This figure may increase further if, and when, more applications come forward.
“The regulator has introduced a prioritisation schedule for processing applications to the fund, this applies to claims linked to both PM Law and any wider applications relating to other law firms. Under the schedule the order in which claims are dealt with will be based on the risk of harm faced by those making them. This ordering will not impact the likelihood of whether any individual claim is successful when considered.
“The SRA Compensation Fund exists to provide safeguards to members of the public who have lost money when a law firm has closed. It is vital tool to providing confidence in legal services by ensuring the public are protected in the unlikely event that their law firm unexpectedly closes.”
Paul Hastings, SRA Director of Client Protection said: ‘We are continuing to do all we can to support former clients of PM Law, including by reuniting them with their money or files.
“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.
“Many of the former clients faced significant upheaval at a stressful time, so we have been determined to provide as much support as possible.”
To help support former clients the SRA has moved extra staff into its compensation fund team. The regulator’s intervention agents also continue to work round-the-clock, including on weekends, to handle client queries, the statement added.