Administrators handling the wreckage of Axiom Ince have launched a claim against the firm’s former accountants, it has emerged. The Part 7 claim for professional negligence was filed with the Commercial Court yesterday by Axiom Ince Limited, represented by Kennedys.
The defendants are listed as Adrian C Mansbridge & Company, a firm based in north London, a limited company of the same name, and Adrian Mansbridge.
The accountancy practice was fined £2,200 last year by its regulator, the Institute of Chartered Accountants in England and Wales, and ordered to pay £2,200 costs.
The ICAEW stated that in January 2023, Adrian C Mansbridge & Company prepared unaudited 'filleted' financial statements for a company which wrongly stated it was entitled to exemption under the Companies Act from carrying out a full audit of its financial position. The regulator did not state whether its action referred to the auditing of Axiom Ince and Mansbridge declined to comment.
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Axiom Ince closed in 2023, after which it emerged that £64m in client money was missing. Much has been paid back to clients from the compensation fund paid for through contributions from the legal profession.
The criminal trial of five former executives of Axiom Ince, including former chief executive and director Pragnesh Modhwadia, is listed for next year and is expected to run for more than three months. The five deny all charges against them.
A report commissioned by the Legal Services Board into the Solicitors Regulation Authority’s handling of the matter stated that, during the SRA’s investigation of the firm in July 2023, a number of matters arose relating to the reporting accountant. Axiom Ince had instructed the same accountant to prepare its accounts every year since its creation in 2009.
Administrators from professional services firm Leonard Curtis estimated in their latest update on Axiom Ince in May that the combined recovery of assets will be between £7m and £10m. Around one-fifth (£5.2m) of the trade debtor collections from Axiom Ince’s various businesses has been paid to joint administrators, while half (£13m) has been written off as uncollectable.
The update also stated that professional indemnity insurer Travelers applied to join Axiom Ince to court proceedings in respect of the insurance position. The joint administrators opposed the application and the court ruled in their favour, with £111,635 costs awarded and paid by Travelers. A subrogated claim against the SRA continues.
