Law Firm’s Collapse Triggers Probe into Client Funds Misappropriation

On February 2, 2023, Butterworths Solicitors abruptly closed its offices in Carlisle, Penrith, Whitehaven, and Kendal. Notices on the doors indicated that the firms could no longer operate due to regulatory issues. The Solicitors Regulation Authority (SRA) was notified of the closure by PM Law Ltd, the parent company, which led to immediate concerns from clients.

Investigation into Client Fund Misappropriation

The SRA initiated an investigation into PM Law Group on February 4, 2023. Jonathan Peddie, SRA’s executive director of legal and enforcement, stated that the agency is probing potential fraud relating to client funds. He acknowledged the serious implications for clients and affirmed a commitment to swift action.

Complex Case Overview

Peddie described the case as “a complex picture,” emphasizing the importance of determining what occurred and identifying responsible parties. The SRA plans to implement necessary enforcement measures against any misconduct.

Support and Compensation for Clients

• Gordons LLP, based in Bradford, has been appointed to assist the SRA with the case.
• They are now handling all files and client funds previously managed by PM Law Group.
• The SRA is actively providing support to affected clients and has started processing urgent compensation fund applications.

Client Fund Recovery Efforts

As of February 9, there have been more than 80 applications to the SRA’s compensation fund. The agency is prioritizing urgent cases, offering emergency grants to clients who require immediate access to funds, especially those with pending housing transactions.

Political Concerns and Statements

Local MPs have expressed their concerns over the situation. Julie Minns, MP for Carlisle, praised the SRA for its swift response and encouraged affected clients to cooperate with the intervention agent. Josh MacAlister, representing Whitehaven and Workington, emphasized the need for transparency and assurance for clients during this crisis.

Clients are advised to engage with Gordons LLP to retrieve their files and funds. The case’s unfolding will likely prompt further scrutiny of regulatory processes within the legal field, as stakeholders await the SRA’s findings and future actions.