The Solicitors Regulation Authority has revealed that it has intervened into the practice of Axiom Ince, closing the business down with immediate effect.
Speculation had grown over the weekend that the firm could no longer operate as its insurance cover had expired. It filed a notice with the court yesterday giving notice of its intention to appoint administrators.
The SRA suspended the individual practices of directors Pragnesh Modhwadia, Idnan Liaqat and Shyam Mistry in August and has now shut down the business as a whole. It is understood all remaining staff have been made redundant.
In a statement, the regulator said the action had been necessary to protect the interests of clients and former clients of the firm.
It added: ‘We will stop the firm from operating, take possession of all documents and papers held by the firm, and take possession of all money held by the firm (including clients’ money). We are not responsible towards employees or trade creditors of firms that we have intervened in.
‘We have appointed agents – other solicitor firms - to deal with all matters currently held by Axiom Ince. The agents will assess all on-going matters and deal with those of greatest need first. Our archive team will take control of all documents relating to closed matters held by the firm, such as copies of deeds and wills.’
The action involving Axiom Ince – which has purchased top 200 firms Plexus Legal and Ince & Co this year alone – could prove to be one of the biggest and most expensive SRA interventions in its history.
The regulator has removed files from 14 offices in total, including sites in Birmingham, Bristol, Leeds, London and Manchester.
Former Axiom DWFM offices are being handled by Gordons LLP, former Ince & Co offices by Shakespeare Martineau, Plexus Legal (north) by Stephensons and Plexus Legal (south) by Lester Aldridge.
Clients are being informed they need to find another lawyer to act for them and that their files have been collected.
The SRA has said to former staff that the intervening agents’ role is solely focused on the protection of clients and they are unable to deal with issues relating to employment.
More former partners continue to find new firms, with the latest being experienced shipping lawyer Stuart McAlpine, who has joined Stephenson Harwood in London.
Commenting on the SRA response, regulatory lawyer Andrew Pavlovic, a partner with London firm CM Murray, said there are significant potential repercussions for the wider legal profession.
He said: ‘Alongside the costs of the intervention, there is also the potential for significant claims on the SRA’s compensation fund, given the size of the client account shortfall. It is not yet clear how this will all play out, but clearly there is the potential for extremely high levels of costs being incurred, which will ultimately be met by the profession.’
