Concerns raised five years before law firm collapse

A former employee of a law group raised concerns about its handling of clients' money five years before its eventual collapse.

Sheffield-based PM Law Ltd closed suddenly on 2 February, leaving hundreds of employees out of work and many clients stranded mid-transaction.

An independent review revealed concerns about the group had been raised to the Solicitors Regulation Authority (SRA) as early as 2021 and "obvious red flags" had been missed during an investigation.

In a statement published this week, the SRA said it was committed to changing the way it regulated firms, adding: "Opportunities were missed to act sooner and we want to prevent that happening again."

The PM Law group consisted of 11 companies, 25 offices and more than 30 trading names, and included firms such as Proddow Mackay, Butterworths Solicitors and WB Pennine Solicitors.

The group had offices across Yorkshire, Cumbria, Berkshire, Derbyshire and London and specialised in personal injury, wills and conveyancing.

The SRA previously said as much as £39.5m in client money could be missing from the PM Law group in what it believed to be a "sophisticated suspected fraud".

The firm's head of finance, Jonathon Bostock, has since been banned from law firms, with the SRA alleging he had allowed improper client account withdrawals and had fabricated account balances. The BBC previously reached out to Bostock and PM Law Ltd for comment but did not receive a response.

According to a review by Jenner & Block LLP, which was commissioned by the SRA, a former employee of Proddow Mackay (Conveyancing) Limited reported the firm to the SRA in March 2021.

They alleged failure to carry out sufficient anti-money laundering checks, and failure to return client monies and transfers of funds between unrelated matters.

It was not until November 2022 that the SRA opened an investigation, with the delay being attributed to "competing priorities and what appear to be capacity issues".

The forensic investigation was closed in spring 2025 as no "substantial concerns had been identified".

Now, charity Blind Justice UK, which was set up to help support litigants in person, has raised further questions about the regulator's approach, saying it had found cases where complaints about solicitors were closed after their explanations were accepted without independent checks.

The charity's research showed that the proportion of reports referred by the SRA for investigation had fallen from 53% in 2017-18 to 15% in 2023-24.

It is calling for the regulator to record what evidence it verified before deciding not to investigate.

The charity's founder Edward Romain said: "We always use the analogy that it's like the police going to a suspect and the extent of an investigation is they go: 'did you do it?' And the suspect says: 'no, I didn't do it'. And they go: 'all right, that's fine. Bye.'

"We've had multiple examples of the SRA's investigative procedure, the extent of it being to call the person and ask. Of course, they're going to say we didn't do it.

"It's bonkers. If it weren't so serious, it would be funny."

The SRA said it was working on changing its approach to regulation with better tracking of risks, more data collection, proactive supervision of high-risk firms and more efficient investigations and enforcement.

"The solution is not more of the same with additional checks and balances," a spokesperson said.

"We are taking action and changing the system."

Blind Justice UK said it had identified warning signs that could be spotted when firms were on the brink of collapse, including customer reviews and a firm's governance structure and history.

"The question the research raises is whether the SRA has systematically examined the structural governance characteristics of its own regulated population using data that's publicly and freely available to anyone," said Romain.

He said the charity wanted to be part of the solution and would work alongside the SRA and the Legal Ombudsman.

"We want to try and prevent things from happening," he said.

"So, what we're saying is, if you're able to track how things can go wrong, why wouldn't you do it?"

The authority said 1,322 reports of potential misconduct were referred for formal investigation in the six months to April 2026, a 41% increase compared with two years earlier.

"As PM Law shows, we have to be better at prioritising the highest risk," the spokesperson said.

"With limited resources, that will always entail difficult, discretionary judgements about which reports progress to a full investigation."

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