Can you apply to the compensation fund?
8 April 2026
Following a recent large intervention, we have seen a significant increase in applications to the compensation fund. As a result, we need to prioritise how we assess and process all applications to the fund. We will consider applications based on different categories, rather than in order of when we receive them.
More information for clients, employees and creditors of PM Law and associated firms
The number of applications we have received to the compensation fund has rapidly increased.
This means from 8 April 2026, we are prioritising how we assess and process all applications to the fund based on different categories of applications (outlined below), rather than the order of when an application was received. This includes all applications to the compensation fund.
Taking this approach allows us to make payments to those with urgent needs based on their situation or vulnerabilities, such as the risk of being homeless due to the collapse of a sale.
Where applicants can show particularor vulnerability in their application, we will take this into account in our initial prioritisation assessment.
We have set out below the current prioritisation criteria. These will be continually reviewed and any updates will be published on this webpage.
Emergency payments
We have a well-established process for dealing with emergency applications which allows swifter decisions in the cases where someone could face the most significant harm.
Our focus for emergency payments is where someone is likely to suffer exceptional hardship if they do not receive an urgent payment from the fund. The most common example is where a person is buying a house to live in and contracts have already exchanged. The applicant will be in breach of contract if they cannot complete and risk losing their deposit and the purchase.
These will be processed immediately.
Individuals purchasing a property to live in
The next priority group after emergency payments are those relating to the purchase or remortgage of a residential property. For example, someone who:
- intends to purchase a property to live in (rather than to let out or as an investment), but they do not yet have a contractual obligation to complete the transaction
- has used alternative funds to continue with their property transaction
- has sold a property and purchased another, but their original mortgage has not been redeemed
- has remortgaged their home and their previous mortgage has not been redeemed
- who has completed their purchase, but the Stamp Duty Land Tax has not been paid or their purchase has not been registered with HMLR.
These will be processed immediately.
Individuals who have paid for legal services that have not been completed
The next category of applications relates to funds paid for legal services that have not been completed. We acknowledge that applicants will need these funds to continue their transactions, but they are likely to be smaller sums than those in the categories above and do not have the same level of impact. For example, someone who:
- has paid upfront for legal work which was not completed
- who is due money back in respect of their transaction.
These will be processed three months from the date the application is received.
Individuals selling properties and individuals buying investment properties
Applications likely to meet this description include:
- those purchasing an additional property to their primary residence
- those who have sold their property and are due funds that a law firm was meant to be holding (to include any retentions where applicable).
These will be processed six months from the date the application is received.
Trusts and probate matters
Applications that are likely to meet this description are:
- from the executor of an estate where a law firm held estate money
- from trustees for funds held in trust.
We appreciate that this will have an impact on the beneficiaries to the estates involved. However, we need to ensure that we are considering the applications that have the potential for the greatest harm to applicants. It is not unusual for beneficiaries to have to wait some time to receive money from an estate or trust.
For this category in particular the consideration of whether an applicant can show will be particularly important and may lead to the application being prioritised.
These will be processed six months from the date the application is received.
Commercial transactions
The final group of applications we will consider will be transactions where a law firm was instructed by a sole trader, business or company.
These will be processed nine months from the date the application is received.
Equality impact of our revised approach to prioritising claims
We have considered the impact of our revised approach to prioritising applications to the compensation fund, including on people with particular protected characteristics. The criteria are intended to prioritise applicants who may be in a vulnerable position. We have not identified any evidence to suggest there will be a differential impact on any particular group as a result of the criteria we have adopted.
Eligible to apply
You are eligible to apply to the compensation fund if, at the time of your application, you are:
- an individual
- a business with an annual turnover or assets of less than £2 million
- a charity with an annual income, net of tax, of less than £2 million
- a trustee of a trust with an asset value of less than £2 million
You may apply to the compensation fund if your loss relates to services provided by the solicitor:
- to you
- as, or to, a trustee where you are a beneficiary of an estate or trust.
If you were not a client of the solicitor, you may still apply to the compensation fund if:
- you were a party on the other side of a legal matter on which the solicitor was acting, and
- have suffered, or are likely to suffer, a financial loss because the solicitor did not use the money as they were meant to:
- to complete a transaction for your benefit
- to make a settlement to you, or
- other payment to you
Not eligible to apply
You will not be able to make an application to the Compensation Fund if any of the following apply:
- Your loss is due to the solicitor's negligence, unless the solicitor did not have insurance.
- Your losses are indirect or consequential. Example: You are selling your property, but the sale falls through because of the closure of the solicitor's firm. You have to remarket your house and accept a lower sale price than before. You cannot make an application to us for your loss of profit. This is an indirect loss. Read our guidance about indirect losses.
- Your loss is a trading debt or liability of the solicitor. This includes claims for fees payable for which the solicitor is liable (e.g. Fees due to counsel or expert witnesses).
- You:
- are bankrupt and any payment from the Compensation Fund would vest in your Trustee in Bankruptcy,
- have entered into a voluntary arrangement with your creditors and any payment from the Compensation Fund would vest in the administrators of your administration.
- are in liquidation.