The UK’s legal regulator is preparing to recover funds from the boss of collapsed law firm Axiom Ince, according to new court filings.
The Solicitors Regulation Authority (SRA) has filed a “Part 8 Claim” against Pragnesh Modhwadia, according to the filings, which City A.M. understands is a procedural application regarding any future cost the regulator wants to reclaim from Modhwadia.
It is understood this would involve covering costs in relation to claims made against the regulator’s compensation fund – a fund for people or firms to be able to recover money in the event a law firm or lawyer, regulated by the SRA, fails to pay them.
The regulator suspended Modhwadia last August over suspected dishonesty as well as failing to comply with the regulator’s rules.
It was revealed that over £60m of client money went missing at Axiom Ince, which ultimately resulted in the firm falling into administration last year.
The administrators of Axiom Ince are currently suing Modhwadia over the missing funds. A court on Monday approved a £1.07m bankruptcy order against him after he failed to make payments for the law firm he acquired last year.
The Serious Fraud Office (SFO) is also investigating the collapse of the firm, looking at allegations of fraud.
The fallout of the firm led to a heated debate within the legal sector over a proposal by the regulator of increasing the annual levy solicitors pay in order to cover claims arising from the firm’s collapse and the expected consequential hit to its compensation fund.
The SRA declined to comment, while City A.M. was unable to reach Modhwadia for comment.