About £10.3m was paid out from the Compensation Fund last year to clients of solicitors who misappropriated their money or otherwise behaved badly.
The Compensation Fund, which is run by the Solicitors Regulation Authority (SRA) on a discretionary basis, pays grants to members of the public, charities and small businesses that have suffered hardship through the wrongful actions of their solicitors, for example, when solicitors steal or misappropriate client money.
The amount paid out last year (the 12 months running from November 2015 to October 2016) was considerably lower than 2015’s tally of £17.9m.
The majority of payments are linked to interventions on the part of the SRA, for example, when it takes possession of a law firm’s files and client monies to protect clients’ interests. In the last year, the top two reasons for compensation were replacing misappropriated inheritance (£4m) and replacing stolen funds intended for house deposits (£1m).
Paul Philip, SRA Chief Executive, said: ‘The Compensation Fund is there to meet real hardship, providing valuable protection for the public when a solicitor is dishonest or does not properly account for clients' money and there is no other means of redress.’
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