Home buyer waiting on £12,000 after law firm shuts
SuppliedA house buyer who paid a law firm £12,000 before it unexpectedly shut has said he does not know when he will get the money back.
Jacob Nicholl, 31, from Penrith in Cumbria, was purchasing a new-build house through Butterworths, which is owned by PM Law, and had paid his deposit fees and stamp duty.
PM Law closed suddenly on 2 February and on Monday the Solicitors Regulation Authority (SRA) said it was investigating potential fraud, including the misappropriation of client money.
The Sheffield-based company, a network of firms trading under a single umbrella brand, and specialising in personal injury, wills and conveyancing, has not responded to repeated attempts at contact by the BBC.
Nicholl and his family chose to use Butterworths in September 2024 because "it was a no-brainer being a local name," he said.
"[But] we were actually dealing with with a conveyancer in Sheffield, [so we were] a little bit surprised."
When buying a new-build property, developers expect contracts to be exchanged before the house has been finished, so in December he paid Butterworths the deposit, stamp duty and legal fees.
Earlier this month, signs appeared on the doors of the firm's branches saying it was unable to trade due to "regulatory matters".
"We're a young family [and] we're really, really excited about moving into our new house," he said. "So that was a real shock."
Nicholl contacted the SRA on the day Butterworths and PM Law closed their branches, but said its initial reaction worried him.
"They seemed as shocked as I did, so that was really concerning," he told BBC Radio Cumbria.
'Risk missing out'
After contacting the house builder, he was relieved to learn that his deposit had been safely received, but the £12,000 stamp duty payment was unaccounted for.
The intervention agent appointed by the SRA had found his documents and forwarded them to the new solicitors, but in terms of client money it was "more of a mystery".
An application to the SRA's compensation fund to recover the money has so far only resulted in an automatic reply, which said it could be up to 10 weeks before a case worker looks at his application.
Mick Lunney/BBCNicholl's new house is due to be finished later in the spring, and he is legally obligated to complete the purchase because contracts have already been exchanged.
"If the SRA don't come back to us in time, we're really going to be at a shortfall, and we could risk missing out on the house," he said.
There is also concern that the number of people affected by PM Law's closure could mean the compensation fund becomes oversubscribed and the process could be lengthy.
"The only worry is that the fund is discretionary, so is there enough money in the pot for everyone?" he said.
"Thousands and thousands of live files were simply abandoned on that day in February - it's a massive job and I am worried if they've got the resource to manage it."
The SRA said its intervention agent, Gordons LLP, had taken possession of files and money - including clients' funds - held by the firm, and was "diligently" working through tens of thousands of files.
The BBC has made repeated attempts to contact PM Law at its Sheffield headquarters in person, by telephone and via email.
We have also put questions to it via the SRA and the law firm appointed as intervention agents by the body. In addition, we have put questions to a number of senior staff via business social network LinkedIn.
