'I believe Britain's professional regulatory system is broken': Greg Wright
This is a tale of two horrific sagas which have caused misery on an industrial scale. The SSB Law and loan charge scandals have brought despair to thousands of households and provide further evidence that Britain’s regulatory system is simply inadequate.
At some point in our lives, most of us will rely on professionally accredited advisers, who should be rigorously regulated, to help us deal with complex legal and tax affairs. If these advisers behave unethically, then they alone should bear the cost of putting things right. Instead, many of the victims of the SSB Law and loan charge scandals are facing a terrible financial burden and deep emotional distress. Ten suicides have been linked with the loan charge scandal alone.
In the case of SSB – which entered administration in January 2024, with debts exceeding £200m – a report commissioned by the Legal Services Board has concluded that the Solicitors Regulation Authority failed to protect consumers. SSB’s debts mostly arose from litigation funding loans which SSB took out to fund high-volume claims, often relating to alleged defects in the installation of cavity wall insulation. Many of SSB’s former clients were later pursued for substantial legal costs, despite the “no-win no-fee” assurances they had been given.
SSB’s poor conduct in handling their cases led to severe financial and personal hardships, and many are still dealing with the consequences of the firm’s failings.
An independent review found that the SRA did not act “effectively or efficiently” in its handling of more than 100 complaints relating to SSB between January 2019 to March 2024. The SRA has apologised for the distress caused and has pledged to make changes to improve how it regulates.
New reports from the Loan Charge Action Group provide troubling evidence that accountants, including chartered accountants, were routinely advising their clients to use schemes now subject to the Loan Charge; schemes that HMRC claims “never worked”. The action group claims that hundreds, possibly thousands, of accountants were recommending schemes to clients and in many cases, telling them not to use a limited company, but to use the scheme instead.
One well known scheme had 450 accountancy firms signed up to recommend it to clients, according to the group. Many of these clients are now facing life-changing tax bills after trusting their professional advisers.
The Government has commissioned a new review of the loan charge after recognising “that concerns continue to be raised about the Loan Charge and some feel strongly that it has not been handled appropriately”.
These “concerns” relate to the appalling financial distress faced by individuals affected by the loan charge scandal, who are furious that their advisers appear to have escaped any meaningful penalty.
SSB Law victims say the SRA’s failings reflect a legal regulatory culture that is “reactive, fragmented, and overly influenced by financial or reputational considerations, rather than grounded in the statutory duty to uphold justice and safeguard the public”. Britain’s “fragmented” professional regulatory system is truly a national disgrace.
Greg Wright is the deputy business editor of The Yorkshire Post