A straightforward guide to the SRA intervention process, your rights to recover client money, and the compensation options available if a closed solicitor’s firm has caused you financial loss.
The first is an intervention where the SRA steps in to close a firm immediately to protect clients. The regulator’s own guidance describes this as shutting a practice down at once; once closed, the firm can no longer act for anyone. The power comes from Schedule 1 of the Solicitors Act 1974, with parallel powers for licensed bodies under Schedule 14 of the Legal Services Act 2007, and the courts have long treated it as a drastic but necessary tool.
The threshold is deliberately low. In Sritharan v Law Society [2005] EWCA Civ 476, the Court of Appeal confirmed the test is a “reason to suspect” dishonesty, not proof of it, with the Solicitors Disciplinary Tribunal deciding later whether wrongdoing actually occurred. The same approach was applied in Sheikh v Law Society [2006] EWCA Civ 1577.
The second route is an orderly closure the firm winding down voluntarily, returning or transferring files, and arranging insurance to cover any future claims.
The cases that shaped the system
- Buckley v Law Society (No 2) [1984] 3 All ER 313 — the court recognised that intervention carries real risk to firms, but is a power Parliament deliberately granted to the regulator.
- Dooley v Law Society (unreported, 15 September 2000) — the High Court framed the purpose plainly: protecting the public from dishonest or incompetent solicitors.
- Sritharan v Law Society [2005] EWCA Civ 476 — established the low “reason to suspect” threshold for intervention on grounds of suspected dishonesty.
- Sheikh v Law Society [2006] EWCA Civ 1577 — applied and tested the same principles on appeal.
Your money
On intervention, the SRA takes control of all money the firm holds, including client money, which is held on a statutory trust. An appointed intervention agent, usually another local firm, identifies who the money belongs to and arranges its return.
Your files
The SRA also takes all documents and papers, keeps them safe, and returns them to whoever owns them. If your matter is live or urgent, a looming court date or a property completion, contact the SRA quickly so a new solicitor can request your file without delay.
If you have lost money
Where loss is caused by dishonesty or a failure to account, you may apply to the SRA Compensation Fund, a discretionary fund governed by its own rules. It does not ordinarily cover negligence. Negligence claims instead go to the firm’s professional indemnity insurer: every closed firm must carry “run-off cover” for six years after closing under the SRA Indemnity Insurance Rules.
If a problem surfaces more than six years after closure and there is no successor firm, the Solicitors Indemnity Fund, now run by the SRA, may still respond, subject to the time limits in the Limitation Act 1980. And if a firm closed without the insurance it was required to hold, the Compensation Fund can step in to fill the gap.
Your first steps
Check the SRA website for the closure notice, note any urgent deadlines, and gather your paperwork. If you think you have a negligence claim, you can request a Professional Indemnity Insurance disclosure under Rule 9.2 of the SRA Indemnity Insurance Rules, firms must provide their insurer details when properly asked.
Key Implications
- Clients: your money and files are protected the moment a firm is intervened in but acting fast preserves live deadlines.
- The route to redress depends on the harm: dishonesty points to the Compensation Fund; negligence points to run-off insurance; long-tail claims point to the SIF.
- Time limits bite: run-off cover lasts six years, and the Limitation Act 1980 governs negligence claims.
- Orderly closure differs from intervention: in a voluntary wind-down, files are typically transferred to a named successor rather than seized by the regulator.