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Axiom issues ‘in the past’, says SRA

The Solicitors Regulation Authority has urged solicitors in England and Wales to move on from the Axiom Ince scandal, despite last week’s heavily critical report into the watchdog's handling of the firm ahead of its 2023 collapse.

According to the Law Society Gazette of England and Wales, chair Anna Bradley told an audience of more than 1,000 people at the SRA’s annual compliance conference that any problems experienced by the regulator were already in the past.

Last week’s independent report published by the Legal Services Board found that the SRA missed an opportunity in October 2022 to examine the Axiom accounts in detail and then allowed client money to be lost during the period of a “partial intervention”, where three directors were suspended but the firm was allowed to trade. 

The SRA responded that it did not agree with a lot of the report and did not understand the basis for enforcement action announced by the LSB.

No apology

The Gazette said that yesterday’s (5 November) conference in Birmingham was the first opportunity for the SRA leadership to address the issue, but added that neither Bradley nor chief executive Paul Philip apologised for the organisation’s role in the matter.

Asked whether the SRA had been asleep at the wheel, Bradley said: “This was a really complex fraud actually, which everyone who had been engaged with Axiom had failed to identify, whether directors in the firm or the accountants responsible for auditing the firm.

“We acknowledge there were some things we didn’t do right in terms of following processes and procedures, and, in many respects, that is history for us. We have already taken the action that is required,” she stated.

Philip admitted that this year had not been easy and that the Axiom Ince collapse had damaged trust and confidence in the profession – though not as much as the Post Office scandal had.

Client accounts

While the SRA did not agree with some of the headlines of the LSB report, Philip said he “absolutely” agreed that it raised issues linked to the risks of law firms running a client account.

He stated that removing firms’ ability to run a client account would lift 95% of risks dealt with by the SRA and end the need for a compensation fund.

“The reality is we couldn’t do that tomorrow because the marketplace needs to develop,” he stated.