Fewer law firms shut down but SRA reports rise in mortgage fraud claims

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By Legal Futures

1 November 2011

Shut down: intervention figure hits four-year low

The number of law firms being closed by the Solicitors Regulation Authority (SRA) has fallen to a four-year low, new figures have shown.

But it has also received a record number of claims for compensation for mortgage fraud in the last quarter.

The SRA intervened in 61 practices in the year to 30 September, compared to 76 in 2009/10, 87 in 2008/9 and 76 the year before that.

There was also a drop in the number and proportion of cases where dishonesty was suspected – 11 in the past year (18%), compared to 20 (26%) in the previous 12 months.

Some 85% of interventions were into practices run by sole practitioners.

But the SRA figures reveal that it received 88 new claims on the Solicitors Compensation Fund arising from mortgage fraud in the third quarter of 2011, the highest quarterly figure since the SRA opened for business in 2007.

Overall there are 1,806 claims open against the fund, with a value of £196m – up 25% on a year ago. However, many claims are not paid and on those that are, most are not paid in full – all for a variety of reasons.

The number of practising solicitors continues its inexorable rise, reaching a new peak of 124,306 in September, a 3% rise on a year earlier. There are 161,815 solicitors on the roll.

The number of law firms has stayed fairly static, however, going up from 10,962 in September 2010 to 11,009 this year.

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