SSB Law scandal is undermining confidence in Britain's legal sector, says Naz Shah MP

Many clients say they are being pursued by lawyers representing the insulation firms’ insurance companies for thousands of pounds.

Ms Shah said her constituents were impacted by the collapse of SSB Law and its subsequent insolvency. She said the problem arose with the delivery of defective wall cavities through a Government initiative, and now has far-reaching implications, affecting 50 of her constituents and more than 1,400 individuals nationwide.

She added: "My constituents have informed me that they were misled by false advertisements of no-win, no-fee claims, which inaccurately assured them that no fees would be requested following their claim against defective cavity wall insulation. SSB Law assured these constituents that liabilities would be covered by after-the-event insurance; however, the firm's failure to ensure cover has resulted in demands for payment by defendant firms. Many of my constituents have received legal bills, which range from £12,000 to £48,000 and have been pressured to make payments within a 10-day window. To meet the legal fees, many constituents have taken loans from family members, leaving them financially insecure. One constituent highlighted to me how his dad suffered from a number of heart attacks as a result of stress and how he also had to sell his car, wedding gifts and other valuables to deal with the financial burden and defects within their homes."

Ms Shah said her constituents were now being forced to negotiate with their insurers about the payments. Late last year she asked for a freeze on demands for payment whilst investigations are still ongoing, however constituents are being urged to explore redress options available on the SRA (Solicitors Regulation Authority) website.

Ms Shah added: “Last year I held two community meetings with my constituents who are victims of the SSB Law Scandal to support them through the ongoing investigations by the Solicitors Regulation Authority and the demands for payment they are receiving from insurance firms.”

In a letter to Ms Shah, Matt Brewis, Director, Insurance at the Financial Conduct Authority, said he understood her concerns regarding the demands for payment that householders are receiving from insurance firms.

He added: “I want to assure you that we take your concerns seriously. It is crucial to acknowledge that these insurance firms have legal rights, as determined by respective court orders, to cover the legal costs. These insurance firms’ fiduciary duty is also to their policyholder, and we would expect them to act accordingly. However, we acknowledge that it is important to emphasise the need for insurance firms to act with due care and integrity.”

In a letter to Ms Shah, Sarah Sackman KC MP, Minister for Courts and Legal Services, said: “I am aware of the serious issues this collapse has raised and can confirm that these are currently being investigated and addressed by the appropriate regulatory bodies. I am also aware that many individuals are facing demands for payments for legal costs, despite being covered by After the Event (ATE) insurance. This has understandably caused confusion and concern among those affected.”

She added: “The Solicitors Regulation Authority (SRA), as the body responsible for regulating the professional conduct of solicitors, as well as most law firms in England and Wales, is carrying out an investigation into this matter.

“The SRA has also advised that former clients of SSB Law have options for redress available to them. One of these options is to communicate with the insurance company who is trying to claim money from affected consumers. In most cases, it will be an insurer working on behalf of the cavity wall insulation companies who has been in contact and is seeking to claim costs from your constituents. The SRA does not regulate insurance companies, but have encouraged them to take a pragmatic approach given the distressing circumstances affected consumers find themselves in. Your constituents may want to contact the insurance company, which was originally in touch to claim the debt from them, to see whether they are taking or considering alternative approaches. Your constituents may wish to seek legal advice before approaching the insurance company.”

The Legal Services Board has also announced an independent review of the Solicitors Regulation Authority’s (SRA) regulatory actions in the lead-up to the collapse of SSB Group.

Ms Shah added: “While I welcome the responses from the Financial Conduct Authority and colleagues at the Ministry of Justice, the financial burden this scandal has placed on my constituents is unforgivable, and the perpetrators must be held accountable.”

"It is unacceptable that my constituents are burdened with tens of thousands of pounds in debt and endure years of stress due to this scandal, without receiving any financial support. This scandal not only causes financial distress to households and vulnerable consumers but also erodes trust in genuine Government policies designed to help people and undermines confidence in our legal system.”

“ I welcome the efforts of the Department for Energy, Security, and Net Zero to enhance consumer protection and improve quality under future government schemes, but we must also support people currently impacted by this scandal. As always, I remain committed to supporting and updating my constituents throughout this ordeal.”

The Solicitors Regulation Authority said it recognises the significant distress for clients impacted in these cases, which raise serious questions about the conduct of solicitors and law firms.

The statement added: “We have two immediate priorities – protecting the public and exploring all possible options for redress for affected clients.

“We have now completed our SSB investigation, reviewing all the relevant evidence. We have given disciplinary notices to a number of individuals, which they have the opportunity to respond to. While it is difficult to set out an exact timeline for this process, we are aiming to make decisions before the summer.

"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 have been 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 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.”