SRA commits millions to interventions
The Solicitors Regulation Authority has already used 10% of its entire annual budget intervening in failed firms in 2013, the organisation revealed today.
Since the start of the year, the SRA has required around £2.2m to secure the files of firms going into administration.
The authority this week spent £1m on Yorkshire firm Atteys and £800,000 on Birmingham firm Blakemores after both practices failed to find a buyer.
In its estimate of intervention costs for 2013, drawn up last April, the SRA predicted it would need £1.285m to intervene in a total of 30 firms. There are already eight firms in intensive supervision where intervention is highly probable and a further 48 where intervention is possible.
In a report for the SRA Board today, it was also revealed that the regulator had found firms where partners were receiving payments irrespective of the firm’s financial situation and senior partners were hiding the true financial picture from 'rank and file' partners.
The SRA said it was essential to intervene in troubled firms where it needed to protect the public. At Cobbetts, bought in a pre-pack deal by DWF last month, clients were protected as files were automatically transferred.
To have intervened in Cobbetts, the SRA estimated, would have cost around £6m.