What happens if your conveyancer goes bust mid-transaction

Conveyancing firms occasionally become insolvent or are shut down by their regulator. The PM Law collapse in 2023 left thousands of transactions in mid-flow and is the highest-profile recent example, but it is not isolated. Understanding what happens when a firm fails — and the limits of the protection available — is useful before you instruct.

Regulatory intervention

When the SRA determines that a solicitor firm poses a risk to clients, it can intervene — effectively closing the firm, taking control of client files, and protecting client money held in the firm's accounts. Intervention is designed to be quick. In practice, the process takes days to weeks and your transaction will be frozen in the meantime.

The CLC has equivalent powers for licensed conveyancer firms.

Client money protection

Regulated conveyancers must hold client money in separate client accounts, not mixed with the firm's own funds. This means that even if a firm becomes insolvent, client money should be identifiable and protected.

Both the SRA and CLC operate compensation funds for cases where client money is lost through dishonesty or failure. There are limits and eligibility conditions — the funds do not provide unlimited cover and recovery is not guaranteed.

What happens to your transaction

If your conveyancer's firm is intervened or closes:

• Your file will be transferred — either to the SRA's intervention agent (for SRA firms) or to another firm appointed to handle the matters.
• You will need to appoint a new conveyancer, who will take over from where the previous firm left off. There will typically be a delay while files are located and transferred.
• If you have exchanged contracts with a completion date, contact the other party immediately and explain the situation. A completion date may need to be renegotiated.
• Keep copies of everything your conveyancer sends you — searches, contracts, title documents — so that the incoming firm can pick up the matter without starting from scratch.

How to reduce your risk

There is no publicly available data on conveyancing firms' financial health that is granular enough to reliably predict failure. The HMLR error rate data on this site does not cover financial distress signals — we have deliberately excluded that interpretive layer in v1 because it carries higher legal risk and the signal quality is uncertain.

The most practical steps are: use a regulated firm (SRA or CLC), verify registration directly before instructing, keep copies of all documents, and be alert to any communications from your firm suggesting financial difficulty. If you have concerns, you can contact the SRA on 0300 672 0900 or the CLC on 0203 859 0904.