The SRA chief executive has defended the organisation over checks made to a growing firm where a £64m hole appeared in the client account.
Paul Philip said the regulator was looking again at its internal processes following the crisis surrounding Axiom Ince but that staff had done their jobs.
The firm secured a freezing order for £64m against former managing partner Modhwadia weeks after the SRA suspended him and two other directors.
In court earlier this month, lawyers for Modhwadia said that client account money had been used to buy properties and fund the acquisitions of Ince & Co in April and Plexus Legal in July. That in turn has prompted questions about whether the SRA fulfilled its obligation to ask for details of each of the authorised bodies taking over a practice and a manager who can be contacted.
Speaking at a media briefing yesterday, Philip said the SRA did not know about any client account shortage when the Plexus deal was arranged, and that staff had done ‘tremendously well’ to spot the issues as quickly as they did.
‘There appears to be growing confidence we have done everything we should have done according to our regulatory arrangements,’ he added.
Philip would not be drawn on whether the SRA intends to intervene into Axiom Ince itself, which continues to be authorised to operate.
He confirmed that the SRA board – which is closed to the public – had discussed potential consequences of the case for the compensation fund, which reimburses client money lost through solicitor dishonesty. There have also been discussions about the wider issue of accumulator firms seeking to grow quickly through acquiring firms but then running into financial difficulties, following problems experienced by the likes of Axiom Ince, Metamorph and Law Direct Limited.
Meanwhile, there continue to be mass departures from Axiom Ince as staff seek alternative firms.
A team of seven marine specialists formerly with Ince & Co have joined the shipping and international trade team at south east firm Birketts.
Alex Penberthy, Daniel Crockford, Clarissa Dumolo, Joanna Mansel, Markella Papadopoulou, Gabbie Hazell and Kate Jenkins will all be based out of Birketts’ London office.
Matthew Biles, previously head of private client & tax at Ince & Co, has moved his nine-strong team to London firm Greenwoods. They follow Roger Harding, head of tax & trusts, who recently made the same switch.
The Gazette has attempted to contact Axiom Ince but had no reply. The firm has no connection with the lawyers-on-demand specialist Axiom Law.
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