The Solicitors Regulation Authority ignored liquidators’ pleas for the cash reserves of a closed firm because it wanted to cover its own costs, it has emerged.
MLL Limited was one of a number of entities shut down by the SRA in late 2022 and early 2023 to protect the interests of clients or former clients. MLL also traded under the names Terry Jones Solicitors, Linder Myers Solicitors, Donnolley & Elliott Solicitors, SLC Solicitors, Verisona Law, Beaumont Solicitors and RJW Legal.
The liquidators’ report, published last month by Companies House, records that immediately after their appointment, the company’s former bank Lloyds was requested to remit the £129,000 remaining in the account.
Despite liquidators’ written requests, Lloyds decided to transfer the full balance to the SRA on the regulator’s own request.
The report states that the SRA had elected not to transfer these monies to the liquidation, as the monies were required to ‘fund their works’. The report added: ‘The joint liquidators have been advised that it would be uneconomical to undertake legal actions to pursue to [sic] SRA. As such, no funds have been realised in this regard.’
Liquidators said they had secured a deal to sell a collection of around 105,000 wills relating to MLL and a connected company Browns Solicitors. These have been acquired by QS Legal Limited for a sum of £480,000, with £67,200 already paid and further payments due in the coming months.
Work in progress for MLL has also realised more than £230,000 to help pay off debts.
Liquidators from insolvency firm Macintyre Hudson LLP reported that they have received claims totalling around £7.4m from 34 non-preferential unsecured creditors. No dividend will be payable to any of this class of creditor. It is unknown what if anything will be paid to HM Revenue & Customs, which is a secondary preferential creditor owed £1.47m.
An initial investigation into the affairs of MLL Limited has identified ‘a number of matters that require further review’, but no details are provided so as not to prejudice any future legal action.
Liquidators’ total time costs to 6 December 2023 amount to £230,000, based on 492 hours of work at an average charge out rate of £467 per hour. Incurred time costs are set to exceed the fees estimate of £236,000, the extra costs caused by the time dealing with the wills sale and various employee related matters. Legal fees paid to three different firms come to around £94,000.
Unrecoverable losses from the liquidations of various Metamorph businesses are now approaching £30m, following the previous reports into the affairs of BPL Solicitors and Metamorph Group Services Limited. BPL was primarily a conveyancing practice while MLL entities handled crime, personal injury, commercial and litigation.
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