Published 7 October 2026

The regulator is now being regulated more closely

The Legal Services Board (LSB), the independent oversight regulator for legal services in England and Wales, has imposed further measures on the Solicitors Regulation Authority (SRA).

The LSB has criticised what it described as a “disappointing standard of leadership” and expressed concern about the scale of law firm collapses overseen by the SRA.

This is not merely a dispute between regulators. It matters because behind every collapsed law firm are real people:

  • Clients who cannot find their legal file.
  • Families waiting for settlement money.
  • Homebuyers who need urgent completion documents.
  • Businesses facing litigation without representation.
  • Vulnerable people who do not know whether their deadline has passed.
  • Clients who may have money missing from a client account.

The LSB said that the cumulative loss of client money associated with Axiom Ince and PM Law is approximately £100 million.

If your solicitor’s firm has already collapsed, please do not sit there worrying. There are practical steps you can take, and legal remedies may still be available.

An editorial illustration of layered regulatory oversight, showing a legal regulator beneath an independent oversight body and accountability structure

What has happened?

The current crisis has developed through a series of major law firm failures.

Axiom Ince

Axiom Ince collapsed after concerns involving approximately £60 million of client money.

In 2025, following an independent review, the LSB issued directions requiring the SRA to improve its approach to identifying risky firms, protecting client money, using intelligence, supervising firms and intervening earlier.

SSB Law

The later collapse of SSB Law led to further criticism. The LSB imposed performance targets on the SRA and issued a public censure concerning the regulator’s handling of the firm.

The collapse was associated with losses and exposure reported on a scale of approximately £200 million, demonstrating the potentially devastating consequences when large legal businesses fail.

PM Law Group

PM Law Group collapsed in February 2026. The SRA intervened shortly afterwards, taking possession of files and money held by the firm.

The SRA stated that it was investigating potential fraud, including the possible misappropriation of client money. Reports have put the suspected fraud at approximately £40 million, although investigations and legal processes remain ongoing. Allegations must not be treated as proven facts unless and until established through the proper process.

The SRA’s official PM Law update confirms that clients unable to access funds could apply to the SRA Compensation Fund.

What did the PM Law review find?

A Serious Event Review by Jenner & Block examined how the SRA regulated PM Law before the intervention.

The review did not say that every SRA employee acted improperly. In fact, it recognised examples of committed and capable staff trying to raise concerns.

However, it identified serious structural weaknesses.

The SRA held information about PM Law across different teams, systems and databases. The central problem was that the information was not brought together into one coherent risk picture.

The review identified:

  1. Ineffective use of intelligence held across the SRA.
  2. Inadequate investigation of complex financial risks.
  3. Failure to escalate serious concerns to senior decision-makers.

The LSB noted that some of these issues had been known to the SRA since 2023. It also said there was “not yet sufficient evidence that these reforms have resulted in better regulatory outcomes or improved protection for consumers”.

The LSB’s message was clear:

“The scale of the harm shows why this matters.”

The measures now include:

  • A consolidated improvement and implementation plan.
  • Additional performance targets.
  • More frequent independent assurance.
  • Greater focus on whether reforms are producing better outcomes, not simply whether new policies have been written.
  • Continued oversight of the existing Axiom and SSB measures.

The SRA has also experienced significant leadership change. Its Chair, Anna Bradley, said the PM Law report “makes for difficult reading” and apologised to former clients. Chief Executive Sarah Rapson said: “Too often, action has been taken only after consumers have experienced harm.”

Who regulates the regulator?

The answer is the LSB, but its powers are not unlimited.

Under the Legal Services Act 2007, the LSB can impose performance targets, issue directions, publish a censure, impose certain financial penalties and, in exceptional circumstances, intervene in the operation of an approved regulator.

The LSB cannot simply remove the SRA Board whenever it considers the Board’s leadership inadequate. The LSB has expressly acknowledged that it does not have power to determine the membership of the SRA Board.

That creates an important constitutional balance:

  • The SRA regulates solicitors.
  • The LSB oversees the SRA.
  • The courts supervise the legality of regulatory decisions.
  • Parliament determines the statutory framework.
  • Clients retain rights to seek compensation and bring legal claims.

There is also an important parallel development. In Carter-Ruck v SRA, the High Court held that the SRA cannot use section 44B of the Solicitors Act 1974 to require production of material covered by a client’s unwaived legal professional privilege.

That does not mean the SRA has lost all investigatory powers. It does mean that a section 44B notice cannot automatically override this fundamental client right. Intervention powers and investigation notices are not identical, and each situation requires careful legal analysis.

Your law firm has collapsed. What should you do now?

1. Confirm whether the SRA has intervened

An intervention is a protective step in which the SRA, usually through an appointed intervention agent, takes control of the firm’s files, money and practice arrangements.

The SRA’s intervention agent may be able to:

  • Confirm whether your file has been located.
  • Provide copies of documents.
  • Explain the status of client money.
  • Identify urgent steps required in your case.
  • Deal with undertakings or completion-related issues.
  • Help transfer your matter to another solicitor.

Contact the SRA promptly and keep a record of every call, email and reference number.

2. Protect your deadlines immediately

Do not assume that an intervention pauses your case.

Check:

  • Court hearing dates.
  • Limitation dates.
  • Appeal deadlines.
  • Employment Tribunal deadlines.
  • Housing possession dates.
  • Probate and estate administration deadlines.
  • Immigration, benefit or education appeal deadlines.
  • Contractual notice periods.

If your case is active, instruct another solicitor or legal adviser urgently. Send them every letter, order, email and document you hold.

The file may be delayed. Your deadline may not be.

3. Ask for your file in writing

Write to the intervention agent and request:

  • Your complete client file.
  • The name of any person now responsible for the matter.
  • A current case position.
  • A list of outstanding actions.
  • Details of money held on your behalf.
  • Copies of court orders, pleadings, expert reports and correspondence.
  • Confirmation of any undertakings or commitments given by the former firm.

Keep your request short and clear. If you need the file to meet a deadline, say so prominently.

4. Make a Compensation Fund application where appropriate

The SRA Compensation Fund may assist where money has been misappropriated or cannot be returned because of the failure or dishonesty of a solicitor or authorised firm.

The fund is not an automatic insurance policy. Applications are assessed under the relevant rules, and you will normally need to provide evidence such as:

  • Your client account statement.
  • The retainer or engagement letter.
  • Invoices and completion statements.
  • Bank records.
  • Correspondence with the former firm.
  • Evidence of the money owed.
  • Evidence of urgency and hardship.

If you are facing homelessness, loss of a property, inability to pay for essential care or another serious emergency, explain that clearly and provide supporting documents.

5. Consider a professional negligence or recovery claim

A Compensation Fund application may not recover every loss.

Depending on the facts, possible routes may include:

  • A professional negligence claim.
  • A claim against the firm’s professional indemnity insurance.
  • A claim against an individual solicitor or director.
  • Recovery proceedings in an insolvency or administration.
  • A claim concerning breach of trust or misuse of client money.
  • A complaint to the Legal Ombudsman, where appropriate.
  • Court applications to protect your position.

Time limits can be strict. The fact that a firm has closed does not automatically remove your rights, but delay can make recovery more difficult.

Do not sign a settlement, waiver or “full and final” agreement without independent advice.

A client file, bank statement, house keys and secure digital folder arranged on a desk, representing the practical route from worry to control after a law firm collapse

What if you cannot afford a solicitor?

If you are vulnerable, disabled, seriously unwell, a pensioner, facing severe debt, involved in housing problems, dealing with welfare benefits or mental health issues, or responsible for a child with special educational needs, you may qualify for free or pro bono assistance.

Commercial, charity and public-sector clients may also need urgent support with:

  • Recovering records and client money.
  • Reconstructing a litigation file.
  • Reviewing professional negligence issues.
  • Protecting contractual and commercial deadlines.
  • Managing insolvency or restructuring consequences.
  • Replacing external counsel or legal advisers.

There is no wrong door. Even where we cannot take on the whole matter, we can assess the position, explain the next step and help identify a suitable route.

We can help you regain control

JAFLAS Dr Alan Blacker & Co. CIC is a Bar Standards Board-recognised Legal Advice Centre and a non-profit Community Interest Company whose assets are locked into community benefit.

We provide practical legal support for vulnerable individuals and strategic legal assistance for businesses, charities, public bodies and institutions. Our multidisciplinary services include civil litigation, professional negligence, insolvency, debt, employment, housing, benefits, family law and alternative dispute resolution.

We can help you with:

File recovery. Money recovery. Case recovery.

Please contact us through jaflas.co.uk, use our free initial advice session, or visit our contact page.

Bring the documents you have. Tell us what deadline concerns you. Ask the question you have been putting off.

Do not delay. The sooner your position is reviewed, the more options may remain open.

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Key sources

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The regulator is now being regulated more closely.

The Legal Services Board has imposed further measures on the Solicitors Regulation Authority after repeated law firm collapses, including Axiom Ince, SSB Law and PM Law Group.

The LSB has referred to:

  • Weaknesses in the use of intelligence.
  • Failures to investigate complex financial risks.
  • Concerns about escalation to senior decision-makers.
  • A “disappointing standard of leadership”.
  • Approximately £100 million in cumulative client-money losses associated with Axiom Ince and PM Law.

But the practical question is not only who regulates the regulator?

It is also:

What does a former client do when their law firm has already collapsed?

You may need to:

  1. Confirm whether the SRA has intervened.
  2. Obtain your file from the intervention agent.
  3. Protect court, appeal or limitation deadlines.
  4. Apply to the SRA Compensation Fund where appropriate.
  5. Consider professional negligence, insurance or recovery claims.
  6. Get urgent advice if money, housing, benefits, employment or litigation is at risk.

The High Court has also recently held in Carter-Ruck v SRA that section 44B of the Solicitors Act 1974 cannot be used to demand material covered by a client’s unwaived legal professional privilege.

JAFLAS Dr Alan Blacker & Co. CIC is a Bar Standards Board-recognised Legal Advice Centre and a non-profit Community Interest Company whose assets are locked into community benefit.

We support vulnerable individuals and provide strategic assistance to commercial, charity and public-sector clients.

Files. Money. Deadlines. Solutions.

Find out more or request an initial advice session at jaflas.co.uk.

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