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Cavity wall insulation claims handled by SSB Group (SSB) and Pure Legal Limited (Pure Legal)

We updated this statement on 5 June 2024, with a focus on the progress of our investigation work and an update on potential options for redress for clients. We added further information on 10 June 2024 to emphasise the importance of individuals carefully considering their options. 

You can still view our initial statement from 4 March 2024.

SRA statement

We recognise the significant distress for clients impacted in these cases, which raise serious questions about the conduct of solicitors and law firms.

We have two immediate priorities – protecting the public and exploring all possible options for redress for affected clients.

We are progressing our investigation into SSB, Pure Legal and the solicitors involved. We will take action to protect the public where we find evidence that solicitors have fallen short of the high professional and ethical standards we all expect. Such action can include seeking to restrict or stop a solicitor from practising. We are aiming to complete our investigation this autumn.

As all firms we regulate must have professional indemnity insurance, clients may be able to seek redress through making a negligence claim on SSB's insurance.  

We are also in the process of liaising with insurers who are pursuing claims for costs against SSB's former clients. Some insurers have already agreed to drop some of their claims for costs against individuals, on the basis that it takes over their right to seek the money from SSB's insurers, instead. We are also aware of one insurer who has paused claims against individuals while they seek the money through SSB's insurers.

We welcome this pragmatic approach. It recognises the immense distress this situation has caused individuals, removes the worry and burden of this unexpected debt, while still offering the insurance company a route to seek to claim its costs. We are contacting all relevant insurers to outline the benefit of them taking a similar approach.

We cannot, however, offer legal advice to clients impacted. Each individual will need to consider carefully their options. This relates to their options for redress, or for bringing a negligence claim, or in relation to any offer - for instance, from an insurer to drop their claim - to decide what is right for them and their circumstances. Impacted clients may wish to seek legal advice.

We will also continue to engage with the Financial Conduct Authority (FCA), who regulate insurance companies, as well as other regulators and organisations, to explore other possible routes of redress. There is the potential for redress in specific circumstances through the Financial Ombudsman Service, and clients can complain about the quality of service they have received to the Legal Ombudsman.

Over the long term, these cases raise questions that spread across multiple sectors and professions, including insurers, surveyors and lawyers. We are liaising with a range of regulators and organisations to explore how we can work together to identify gaps in the current protections, and changes that could be made to better protect consumers.

Below we have set out in more detail the context around these cases and a briefing for those impacted, including progress on our investigation and options for redress.

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At the end of 2023, we received a number of 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 on a 'no win, no fee' basis. However, the ATE insurance providers have declined to meet the costs as expected under the insurance policy, and so the defendants have pursued SSB's clients for costs.

It 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 what are sometimes called 'no win, no fee' cases.

We continue to progress our investigation into SSB. We are reviewing files, interviewing staff from SSB, and have taken several victim impact statements.

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 is not 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. 

Our investigation covers a range of key areas. In particular, we are reviewing 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 are also looking closely at the After the Event (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 are also looking back to previous complaints that were made about SSB and this issue and assessing their relevance to our ongoing enquiries.

We are aiming to conclude our investigation this autumn. We will take action where we find evidence that solicitors have fallen short of the standards the public expects.

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 have an ongoing investigation into another firm, Pure Legal, which went into administration in November 2021. Some of Pure Legal's files were transferred to SSB and other firms following the administration of Pure Legal.

Our investigation into that firm also includes, among other issues, similar concerns about clients being unexpectedly pursued for defendant's adverse costs after claims being handled by Pure Legal either failed or were discontinued. We are aiming to conclude our investigation into Pure Legal later this year.

All firms we regulate must have professional indemnity insurance (PII) in place. If a regulated law firm has been found to be negligent, the client may be able to claim on their PII.

Unfortunately, we are not able to give legal advice, but clients may wish to seek independent legal advice. There are online resources - Thinking of using legal services? guidance, and the Legal Choices website – they can use to find cost-effective legal support.

The SRA has also been liaising with regulators and insurers about other routes to redress and identified that there may be an alternative option to settle matters for SSB's former clients through working with insurers of the cavity wall installation companies.

Installation companies and their insurers may be able to claim back their costs through SSB's insurance, rather than pursuing SSB's former clients for adverse costs.

We know of one insurer who has paused claims against individuals while it seeks to claim money from SSB's insurers. Other insurers have reached an agreement to not pursue the debt from the individual impacted. This is on the basis that the individual assigns over to the insurer their rights to bring any new claims against SSB's PII.

We have written to the insurers we are aware of in these cases to say we believe there is a benefit in other insurers taking a similar, pragmatic approach.

We cannot, however, offer legal advice to clients impacted. Each individual will need to consider carefully their options. This relates to their options for redress, or for bringing a negligence claim, or in relation to any offer - for instance, from an insurer to drop their claim - to decide what is right for them and their circumstances. Impacted clients may wish to seek legal advice.

We also will continue our ongoing liaison with the Financial Conduct Authority, who regulate insurance companies, to consider this and other options for redress.

We operate a Compensation Fund. Our early view, however, is that this Fund is unlikely to assist former clients of SSB where they are being pursued for costs. The Fund only pays out in situations where there has been dishonesty or a failure to account for monies held by a firm and there is no other avenue for recovery.

Our early view is that the main key allegations we are likely to raise will not involve dishonesty. As the Fund is a fund of last resort, even if the firm acted dishonestly, under the rules of the Fund those affected would need to pursue a claim against the firm or its insurers first. 

This means that unless something new comes to light, unfortunately for the majority, if not all, of those being pursued for costs, the Fund is unlikely to assist them.

We are continuing our conversations with other regulators and organisations to explore other routes of redress.

The Financial Ombudsman Service (FOS) provides redress for consumers of financial services, such as insurance products like ATE. Whether FOS are able to assist, will depend on the status and location of the ATE provider, as well as the details of the case.

Those affected may be entitled to bring a complaint to the FOS against their ATE insurers in circumstances where that insurer has declined to cover the costs awarded against them. There are also some limited circumstances in which a complaint might be made to the FOS against the professional indemnity insurer for SSB or the insurers for the installers of the cavity wall insulation. These are usually where the individual can show their entitlement to claim against their policies through:

  • obtaining a judgment
  • an arbitral award
  • being able to demonstrate an enforceable agreement or
  • obtaining a declaration from a court against either SSB or the installers.

There is guidance on the FOS's website explaining how people can complain to it (after they have complained to the ATE insurance providers first).

If clients want to complain about the quality of the service they have received from SSB, they should continue to contact the Legal Ombudsman (LeO). However, LeO will not be progressing complaints until the outcome of our investigation is known. There is guidance on the LeO's website explaining how people can make a complaint.

We will update this statement again in September or earlier if we have substantive updates.

In addition to our investigation, these cases raise questions about the role of ATE insurance providers and surveyors in these cases - as well as whether there are wider issues for legal services or gaps in protections. We are therefore liaising with the FCA (which regulates the ATE providers) and the Royal Institution of Chartered Surveyors (RICS) (which regulates surveyors) to share information and insights and understand what action they may be taking. We have recently invited FOS, FCA, RICS, and LeO to a roundtable event to explore further the protections for consumers in respect of ATE insurance.

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. The LSB plans to report on its review and overall learnings later this year. We welcome the review and we will take on board any feedback it provides to us and consider any recommendations it makes to improve our work.