A case brought by the Solicitors Regulation Authority (SRA) has seen a law firm blamed for money stolen by one of its employees.

Andrew Norman Payne of Payne & Co was convicted of having stolen money and subsequently received a prison sentence of five years.

But the SRA brought about proceedings against the firm on grounds of professional negligence, a claim which might subsequently fall on the firm's insurers.

The authority explains that it aimed to limit the amount of compensation to be paid from its own funds and thus reduce the amount which must be paid into the fund by solicitors in the future.

"The money will now be available to protect the public in other cases," suggests chief executive Antony Townsend.

"We are determined - on behalf of the public and all the honest solicitors who contribute to the fund - to recover losses."

The ruling saw the firm held accountable for Mr Payne's actions and the SRA was awarded a payout of £1.3 million to be passed on to former clients of Payne & Co.

Solicitors Journal editor Jean-Yves Gilg notes that no formal requirement was imposed of where this money should come from.

"There are no details available yet as to where the money will come from - one assumes from the [firm's] insurers, but the SRA could not confirm," the editor writes.

Iain Miller, regulatory partner at law firm Bevan Brittan, which assisted the SRA in pursuing the case, told Legal Week: "These types of claims form an important way of recovering losses that would otherwise fall on the profession as a whole."