The Solicitors Regulation Authority missed multiple opportunities to address serious failings at PM Law Group from as far back as 2023, with investigations conducted without access to management accounts and explanations provided by PM Law leadership accepted on face value without independent verification.
The central finding of an independent serious event review (SER) conducted by Jenner & Block London LLP is one of an organisation that lacked “the infrastructure – technological, procedural and in terms of trained expertise” to translate a large body of information gathered about the failed group over a number of years into “timely and effective regulatory action”.
The SRA held “a substantial body” of information about the PM Law Group after conducting two forensic investigations into group firms in 2023 and 2025, along with an anti-money laundering (AML) inspection, a thematic review visit and “numerous” reports about group entities, a number of which were investigated.
Despite the large volume of information available, the knowledge was “fractured” and distributed across different teams, systems and individuals, with forensic investigations not shared between teams, and the SRA board and executive team not informed about the potential risks associated with the PM Law Group.
During a thematic review visit to PM Law Limited in summer 2024, the risk team learned that the COFA role was held across five alternative business structures within the PM Law Group while also serving as group CEO, and the COLP for PM Law Limited was also the COLP for three further ABSs within the group and acted as MLRO and MLCO for PM Law Limited.
Interviews revealed the COFA had not read 15 internal breach reports made over three years – none of which had resulted in an external report to the SRA, the COFA had not read the SRA’s Reporting and Notification Guidance or its Enforcement Strategy Guidance, and there had been no compliance officer training within the previous year.
Following the visit, the SRA concluded that the firm required no referral for regulatory action and rated it “Good” across most assessment dimensions.
The first of two “most significant” missed opportunities for action identified by the report was in November 2024, when an investigation manager escalated “specific and serious” concerns about PM Law Limited but a decision was taken to undertake a non-urgent, standardised accumulator work programme (AWP) review instead of an urgent forensic investigation, with the view there was “insufficient risk client monies to require an urgent forensic investigation”.
A subsequent 2025 forensic investigation was “insufficiently vigorous”, limited to PM Law Limited in isolation rather than the group, conducted without management accounts or group-level financial information and closed on the basis of explanations from the PM Law Group’s CEO that were not independently verified.
Despite a “significant volume” of client to office account transfers, as well as a £2 million transfer through the client, office and conveyancing accounts, and evidence of mobile banking transactions, the investigation was closed with a “no concerns” finding.
A third opportunity was missed when “serious questions of financial instability and consumer risk” were identified in a report related to group firm 3M Law Limited, a joint venture connected with the PM Law Group, but the investigation was classed as “high risk but not urgent”.
An investigator wasn’t assigned to until 30 January 2026, just days before the group collapsed with the loss of over 600 jobs across 11 entities within the PM Law Group.
The complexity of the group’s structure and a misunderstanding by the SRA of how it operated compounded the delays, the independent review found.
“The SRA held more information about the PM Law Group than was ever drawn together into a single, coherent risk picture. Consequential decisions — in particular the November 2024 decision and the conduct of the 2025 forensic investigation — were therefore taken in conditions of partial information, against a risk more serious than the decision-maker was able to appreciate. This was not principally the product of individual error, though errors were made; it reflects a structural limitation in the SRA’s operational architecture and that its Risk and Data Programme (“RDP”) is intended to address, but which was not resolved by February 2026.”
The SRA has accepted the findings of the review, which Anna Bradley, chair of the SRA board, said “makes for difficult reading”.
“We are particularly sorry for the impact this has had on former clients of the firm and accept we should have done better by them”, she added.
Sarah Rapson, chief executive of the SRA, said the report reinforces the need to “reset the way the SRA regulates”.
“Too often, action has been taken only after consumers have experienced harm. This exposes the limitations of a regulatory model that remains too dependent on enforcement after the event rather than prevention before it occurs.
“Work to shift the SRA to a more proactive footing was underway when I arrived, but it became clear quickly that we needed to go further and faster. The findings from the independent review further reinforce the priorities the organisation has set and accelerate the need to shift away from a reactive, enforcement-led model to become a modern, proactive and effective regulator. This will take time but it is the priority.”
The report acknowledges work is in progress and the “SRA is in a period of significant change”, but says the regulator’s operating model “is not where it needs to be”.
It adds: “In our view, three structural gaps require resolution if the SRA is to effectively regulate firms of this complexity and risk profile. First, it needs the technological capability to aggregate intelligence across workstreams so that decision-makers see a complete picture of an entity at the point of decision. Second, its FI function needs clearer frameworks, better training and stronger supervision to investigate the financial position of complex group structures. Third, it needs fully defined escalation criteria so that the accumulation of very serious concerns reaches the appropriate level in the organisation without depending on the initiative of individual officers.”
The SRA said it “has been and continues to be” focused on three areas of improvement: client money, with the introduction of new rules on compliance roles and accountants’ reports; data, risk and supervision, with the development of an intelligence and data-driven approach; and capacity and ways of working, with new additional capacity added at an executive level and a layer of management removed.
Bradley said the board is “disappointed’ it missed opportunities to act on PM Law sooner given the work that was already underway.
“But we always knew that this programme of work was going to take significant organisation-wide change, and the Jenner & Block findings make it clear that we have much further to go”, she added.
“We will publish a draft three-year strategy later in the year, which will incorporate the lessons from these reviews and map out our plans for further change. This work will be the top priority for Sarah, her new senior team and the Board.”
By August, the SRA had dealt with 539 applications to its compensation fund and paid out £15.6 million, with a further £6.9 million paid out from money held within the firm.
“We are continuing to handle hundreds of further claims to the compensation fund”, the SRA said in a statement responding to the report. “The total value of these potential claims to date, including those already paid out, is an estimated £31.57 million.”
Law Society of England and Wales president Mark Evans said the review “paints a bleak picture” of the regulator and the opportunities it missed – with the legal professional paying the price.
“Once again, the profession as a whole – solicitors and law firms – has had to shoulder the financial consequences through a substantial increase in contributions to the Compensation Fund, costing approximately £30 million”, he said.
“The Fund provides vital protection for clients and consumers, but the cost of regulatory failings should not continue to fall on the wider profession.
“It is clear from the report that the SRA needs to take urgent action. While steps are already being taken by the SRA, meaningful reform needs to be delivered swiftly to prevent yet another failure of this scale from happening again.
“The public and solicitors benefit hugely from a well-regulated legal profession. It is the foundation of the legal sector’s success nationally and internationally, but repeated failures by the regulator chip away at the confidence in our sector.”
