Legal Services Board steps up enforcement action against the SRA

A fourth intervention in the regulator of solicitors

The Legal Services Board has confirmed it will take further enforcement action against the Solicitors Regulation Authority, following the independent review into the PM Law Group collapse.

The SRA is already operating under three statutory measures: directions relating to Axiom Ince, and a public censure plus performance targets relating to SSB Law. Adding a fourth is not routine housekeeping. It is an oversight regulator saying, in public, that the body regulating 178,000 solicitors is not correcting itself quickly enough.

The LSB went further than process criticism, expressing disappointment at the "standard of leadership and accountability demonstrated" by the SRA board.

Why now

The trigger was the Jenner & Block review published this week, which found the SRA had the intelligence to act on PM Law long before February but never brought it together. The LSB's position is that this repeats weaknesses it had already identified and directed the SRA to fix after Axiom Ince.

Combined client losses from Axiom Ince and PM Law are expected to reach around £100m.

Separately, a Berkeley Partnership assurance review found "meaningful progress" on the Axiom Ince directions while flagging areas still requiring work — a phrase doing a considerable amount of load-bearing.

What firms should take from this

Regulatory pressure travels downhill. When an oversight regulator demands faster, more assertive supervision, the practical expression of that is not a strategy document. It is more information requests, tighter reporting deadlines, more scrutiny of client account arrangements and less patience with firms that answer slowly.

Compliance officers should expect the supervisory temperature to rise through 2027, particularly for firms with rapid acquisition growth, complex group structures or high-volume consumer work — the exact profile of the failures under examination.

The Compensation Fund problem

There is also a cost question nobody has answered convincingly. Compensation Fund contributions have risen sharply, and the profession absorbs them. Firms that never touched a client account improperly are funding the shortfall from firms that did, plus the regulatory failure to spot it.

Our view

Enforcement action against a regulator is an unusual and slightly uncomfortable spectacle. But the alternative — three failures, three reviews and no consequence — would be worse.

The genuine risk is that the SRA responds to pressure with volume rather than precision: more forms, more returns, more thematic reviews, all landing on small firms with no compliance department. Better regulation means catching the outliers earlier, not taxing the compliant more heavily. That distinction is the one the LSB should be measuring.