SRA threaten clampdown on failing firms

SRA director Samantha Barrass told a conference on compliance that strong sanctions will be taken over solicitors who act irresponsibly in the face of financial instability.

The Law Society Gazettee today reported that the SRA has promised tough action against failing firms that do not wind down efficiency. Catherine Baski reported that SRA director Samantha Barrass that the SRA had identified 150 firms that are experiencing ‘very significant financial difficulty’.

This follows reports of a significant over spend this year on interventions, and proposals to recover the amounts that exceed the budge from the compensation fund that have not been well received see the article by John Hyde 26th April 2013.

The recent threat of strong deterrance follows the spate of recent ‘pre pack’ insolvencies of law firms, where complaints have been made that the SRA have failed to protect the interests of creditors such as landlords and members of the bar who face uncertainty over payment of rents, fees etc.

The SRA have threatened action including

• a hard line on compliance officers who fail to take proper steps
• robust action for financial irresponsibility
• ‘Serious consequences’ for reckless trading.

 The full article is available in the Law Society Gazette for 22 April 2013 but for some reason does not yet appear on the website.

Originally posted 2013-04-26 00:00:00.