£39.5m Client Funds Vanish in PM Law Fraud Investigation

The Solicitors Regulation Authority says about £39.5m in client funds appear to have vanished in a PM Law fraud investigation. The SRA confirmed it is treating the Sheffield-based group’s collapse as suspected fraud. The firm shut suddenly in February, and the regulator intervened two days later.

Scale of the collapse

PM Law operated across 11 companies and 25 offices. It used more than 30 trading names. The missing sum is second only to the Axiom Ince case, where roughly £64m went missing.

Immediate financial response

By the end of last week the SRA had paid £9.3m across 92 claims. That cash went to former clients of the collapsed group and related firms. The regulator also released £6.8m from funds held when it intervened.

Projected impact on the Compensation Fund

Hundreds more claims are expected. The SRA estimates the burden on the Compensation Fund at about £21.5m. The fund is financed by solicitors and firms across the profession.

Client communications and file handling

Regulators have sent roughly 25,000 emails or letters to people with live matters. They have handled about 17,000 client enquiries so far. The SRA has returned 9,300 live files directly to clients.

In addition, around 20,000 files were bulk-returned to insurer clients. Intervention teams are working evenings and weekends. Extra staff have been seconded to the compensation fund team.

Priorities and processing times

The SRA has set a triage system to manage claims. Buyers who exchanged contracts and face collapsed moves are being prioritised first. Cases earlier in conveyancing follow next.

Claims for prepaid but incomplete work will be processed within three months. Trusts and probate matters may take up to six months. Commercial transaction losses could take up to nine months.

Official responses

Paul Hastings, director of client protection at the SRA, said the regulator is focused on reuniting clients with money and files. He noted many people face disrupted house moves and delayed probate. The SRA aims to provide practical support in stressful circumstances.

Law Society chief executive Ian Jeffery welcomed the SRA’s swift action. He warned that the PM Law collapse follows recent large failures such as Axiom Ince and SSB Group. He urged the regulator to strengthen preventative oversight and protect consumer confidence.

Next steps

The SRA continues its investigation into the suspected fraud. Claim volumes and payouts will determine further pressure on the Compensation Fund. Firms and clients will be kept informed as the process unfolds.

Filmogaz.com will monitor developments and provide updates as further information becomes available.