Legal Services Board urges action on SRA compliance

The Legal Services Board (LSB) has recently expressed serious concerns regarding the regulatory performance of the Solicitors Regulation Authority (SRA). With only one month remaining until the deadline for SRA's compliance with LSB's Directions concerning Axiom Ince Limited, the Board is taking significant steps to ensure accountability. This week, the LSB Board requested that the SRA commission an independent external audit to assess and evaluate its compliance with the Directions. The results of this audit are expected to be presented to the LSB by the end of June.

In addition to the situation with Axiom Ince, the LSB Board is alarmed by the substantial failure of PM Law Limited, leading to a cumulative loss of client money estimated at approximately £100 million between the two firms. Notably, the SRA has initiated an independent review of its handling of PM Law, which is anticipated to be completed shortly. The LSB has identified the urgency of implementing protective measures for consumers, particularly in light of the potential for more significant failures in this area.

Recognising the gravity of the situation, the LSB will intensify its scrutiny and oversight of the SRA's management of known higher-risk firms. It will utilise its formal information-gathering powers under section 55 of the Legal Services Act 2007 to glean further details on how the SRA plans to handle these firms, mitigate risks, and ensure consumer protection. Notably, the SRA is currently under three statutory enforcement measures, a situation that is unprecedented in the history of legal services regulation.

The LSB Board has made it clear that immediate regulatory action from the SRA is necessary. Consequently, the LSB Board has requested the SRA Board provide assurance in a face-to-face meeting before the end of May regarding its capability and oversight approach to implement the urgent reforms required to address the prevailing challenges within the sector.

"The LSB's primary concern is consumers: those who have already suffered harm and those who remain at risk," stated Monisha Shah, Chair of the Legal Services Board. "People must be able to use legal services with confidence that effective regulation is in place to protect them, particularly from loss arising from alleged criminal activity." The LSB does not expect to make further comments on these enforcement matters until after discussions with the SRA have concluded, with a follow-up meeting scheduled for 21 July 2026.