Defence firms 'exploiting' stranded PM Law clients

A law firm director has urged defence solicitors not to be tempted to take advantage of clients stranded by their firm's sudden closure.

Alisha Butler, a solicitor with Liverpool firm Phoenix Legal, stepped in to help around 10 clients of PM Law Group firms who had ongoing personal injury litigation with the collapsed company. These clients were left stranded when PM Law and its affiliate firms closed suddenly, with seemingly no plan in place for the transfer of files.

Butler said the files she has seen have examples of directions being missed, ongoing applications to strike out claims, clients saying they had received no updates for up to a year, and people panicking about costs orders being made against them. In some cases, clients will have qualified one-way costs shifting protection, but not if defendants successfully apply to have claims struck out. 

Butler said she is concerned that defendants have started to make these applications where PM Law clients have been unable to progress their case while the Solicitors Regulation Authority sorts through ongoing cases.

‘A strike out may be likely as these clients are struggling to find firms to take over the cases, particularly at such short notice with trials listed and applications listed,’ she said. ‘As a profession we should not be taking advantage of people who do not know the law or how to deal with a case having been abandoned by their legal representation. We have a duty to act with integrity and I am saddened that this is happening to these people.

‘Regardless of the fact that we will make very little as a firm, if we help these people, I will not leave them stranded without legal representation whilst vultures circle in the hope of getting an advantage if they succeed in a strike out.’

The code of conduct states that solicitors must not abuse their position by taking advantage of clients in this position. SRA guidance states that ‘special care’ is needed when dealing with or corresponding with an opponent who is unrepresented or vulnerable.

PM Law Group was intervened into by the SRA last month after closing without notice to clients or staff. The group was made up of 11 companies and more than 30 trading names. It had more than 17,000 clients but the SRA and its intervening agent had been able to release only around 3,600 client files as of the end of last week.