According to an article by the Law Gazette, the Solicitors Regulation Authority (SRA) faces historic enforcement action by the Legal Services Board (LSB) following its mishandling of the 2023 collapse of law firm Axiom Ince. An independent review found the SRA’s actions were inadequate and ineffective, with failures in oversight leading to the loss of £60 million in client funds and 1,400 jobs. This oversight failure has shaken public trust, prompting the LSB to invoke its powers under the Legal Services Act to direct regulatory changes to prevent a similar incident. Alan Kershaw, LSB chair, emphasised that these enforcement actions aim to restore confidence in legal service regulation, identifying crucial areas where the SRA’s actions fell short.
In response, SRA Chief Executive Paul Philip acknowledged some of the review’s findings yet expressed disagreement with the basis for enforcement. The SRA has committed to procedural reforms, including a forthcoming consultation to better safeguard client funds, even exploring the possibility of stopping law firms from holding client money altogether. Meanwhile, Philip Barden, representing Axiom’s remaining directors, clarified their efforts to mitigate the fallout, rehousing clients and saving over 1,100 jobs. With regulators now under heightened scrutiny, this action signals an urgent shift in regulatory expectations to prioritise client protection and restore public confidence in the legal sector.