Axiom Ince: SRA may ask solicitors to help plug £64 million black hole

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By Thomas Connelly on


Mulls one-off levy

Solicitors across England and Wales may be required to make a one-off payment in order to plug the huge black hole likely to be left in the regulator’s finances as a result of the collapse of Axiom Ince.

The Solicitors Regulation Authority (SRA) oversees a special compensation fund that aims to support people who are owed money by a regulated law firm. Solicitors contribute to the fund through a levy added to the practising certificate fee.

Last month it emerged Axiom Ince had secured a freezing order against its former managing partner, Pragnesh Modhwadia, after £64 million was found to be missing from its client account.

Lawyers for Modhwadia later confirmed the money had been used to purchase law firms Ince and Plexus as well as a number of properties. The SRA stepped in and shut down the firm soon after. No allegations have been brought against Modhwadia.

But the regulator has this week admitted it may ask solicitors to pay an additional one-off levy as a means of addressing the millions of pounds in potential claims from Axiom Ince clients, The Law Society Gazette reports.

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The report states that there is around £18 million currently available in the fund, which typically pays out, on average, £13 million a year.

Another option reportedly being considered by the SRA is to cap the amount that can be claimed by the firm’s former clients.

SRA chief executive Paul Philip is quoted as saying: “We are trying to work out how many people are affected and how much they have lost… we are going to have to collect a lot more money.”

“We are very clear we have done everything we should have done,” he said. “In the last 15 months we have seen much larger firms [being intervened into] that appear to pose a risk not just to the Compensation Fund but the reputation of the profession.”

“We could go and visit all these firms that are growing but we are not an external auditor,” Philip continued. “If we were to do that it would need a significant expansion in the skills base and staff which would ultimately be added to the PC fee.”


Death knell of the SRA

Part of me actually wants the SRA to try this. The SRA has garnered no friends of late. The industry will not want to pay for the SRA’s own incompetence.

Kirkland NQ

Lol the SRA should come to me. I’ll just skip the wine bar this evening and use the savings to plug this gap.

SRA MD Oliver Twist

Please can we have some more? We have spent so much protecting the public interest in striking off over-worked, and under pressure juniors


This is sheer incompetence.

Not yet a lawyer (and not intending to underwrite other firms)

So on top of the outrageous and overpriced SQE debacle. Once I am qualified I need to pay for the mismanagement of poorly managed and poorly regulated firms?

Obviously, I am missing something, but why isn’t this being sorted out between Axiom Ince, Modhwadia and a ‘participating insurer’?


That is not “asking solicitors to help”. Please be precise. It would be a compulsory levy.


Maybe the SRA should be focusing on this sort of issue rather than being obsessed by what solicitors did after a night’s drinking.


Perhaps they could do both…?


No, because they have shown they can’t do that. Or they could go back to being a functioning industry regulator rather than being distracted by operating as some sort of morality police. The public wants client money to be safe, in the real world they don’t care about fumbles after a few cocktails.

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