Statement

At the end of 2023, we received reports that SSB's clients were unexpectedly being pursued to pay adverse legal costs in relation to their discontinued cavity wall insulation (CWI) litigation claims.

SSB had arranged after-the-event (ATE) insurance for clients, to cover the other side's costs in relation to their CWI claims. ATE is a type of legal expenses insurance policy taken out to provide cover for legal costs and expenses incurred in litigation in the event a claim is unsuccessful. These policies are commonly used in litigation, including in what are sometimes called 'no win, no fee' cases.

However, in some cases, SSB’s ATE insurance providers declined to meet the costs as expected under the insurance policy, and so the defendants have pursued SSB's clients for the costs of rebutting the claims against them. In other cases, it appears that ATE insurance was either not in place or it was insufficient to meet client needs.

Our role is to identify any misconduct that brings a solicitor's right to practise into question and take appropriate action to protect the public. We can allege misconduct using a sample of files to demonstrate themes of misconduct. As such, it has not been necessary for us to look at every file, or rely on every complaint received, in order to allege misconduct against the firm, or any solicitors involved. Doing so would have significantly extended the time taken for our investigation, delaying action to protect the public.

Our investigation covered a range of key areas. We reviewed how the firm obtained its work, and how the claims were handled by staff, including whether clients were properly advised and whether their instructions were followed. We also looked closely at the ATE insurance obtained, and whether the solicitors complied with their obligations to keep the ATE insurers updated regarding the merits and progress of claims.

We also looked back to previous complaints made about SSB and this issue and assessed their relevance to our enquiries.

We have now completed our investigation, having reviewed all the relevant evidence, and are deciding on next steps. We have already taken action against some individuals. And we anticipate making further decisions soon.

Last year, we took action against four solicitors who worked at SSB and were involved in this work by placing conditions on the way they can work in order to protect the public. These conditions were on an interim basis, pending the final outcome of our investigation. Further information on the action we took is available here: 

Jeremy Brooke

Debra Allen

Lucy Flynn

David Toyn

We have a range of powers to take action against solicitors and firms to protect the public and act as a deterrent. This includes being able to fine solicitors up to £25,000, rebuke them and put controls on how they practise.

In cases of serious misconduct where our view is that a more significant sanction is needed, we will take cases to the independent Solicitors Disciplinary Tribunal (SDT). They have the power to issue unlimited fines and stop solicitors from practising – either for a limited period (a suspension) or indefinitely (striking off).

If that happens the SDT prosecution will have its own timetable.

We continue to investigate concerns relating to the conduct of Pure Legal Limited and are nearing the completion of a detailed review of relevant client files. We hope to have completed our investigation soon.

This review will consider whether there has been a breach of our rules and if so, which individuals at the firm may have been culpable for those breaches. We will then consider whether we need to put interim conditions on practising certificates. Interim conditions can restrict the type of activities a solicitor can do, with the aim of protecting the public while we investigate a solicitor.

At this stage, we will also be able to consider regulatory action against relevant individuals who were at the firm and will look to move forward with this process as soon as possible.

These cases have raised wider issues about whether the high-volume claims market is working as well for the public as it should be, and whether there are appropriate protections in place.

We are committing significant resource to tackling these issues. We have carried out targeted visits to firms to check for compliance. Where we have found issues, we are taking action. As a result, we are now investigating more than 70 firms working in this area. We are progressing these at pace and will take enforcement action where needed to protect the public.

We are also writing directly to firms operating in this area to remind them of their obligations and seek assurance that they are meeting them. This will build on warning notices we have already issued to the whole profession outlining our concerns.

We also want to help people better understand how ‘no win, no fee’ claims can work, including their options, what the risks are, and what they should expect from a legal service provider working to the standards we expect. So we have published a guide for consumers.

We are determined to address issues in this sector by taking action ourselves, but we think there are some wider systemic issues which we can’t resolve alone in relation to the funding of this kind of claims work, including insurance and the regulation of claims management. In order to address some of these wider issues we are working with other regulators and government to help deliver a cross-sector response, so we can make sure this area of the market works more effectively in the public interest.

Separately, our oversight regulator, the Legal Services Board (LSB) has commissioned an independent review to look at the regulatory events that led to the collapse of SSB. We welcome the review, and will take on board any feedback it provides to us and consider any recommendations it makes to improve our work.