Why the cavity wall insulation scandal needs to be a watershed moment for the legal system - Greg Wright

SSB persuaded people affected by the cavity wall insulation scandal to take legal action against the firms which installed it, and, to quote an independent report into this debacle “the broad thrust of the advice given to clients by SSB was that, if their claims were not successful, they would not be exposed to any costs liability and that, essentially, they had nothing to lose by progressing a claim”.

This proved to be a hollow promise. Just ask Halifax taxi driver Jamil Zafar, a former SSB client who cannot forget the terrifying day the bailiffs came to his home with an enforcement letter for more than £18,000. He recalled: “My kids asked me, ‘Dad, have you done anything wrong? Why are you paying this amount?’ His son later told him: “Dad, I don’t want to end up homeless.”

In common with many victims of the SSB law scandal, Mr Zafar was pursued by lawyers representing the insulation firms’ insurance companies for thousands of pounds in incurred costs. Many of the cavity wall insulation claims conducted by SSB were unsuccessful. In a large number of these failed claims, a costs order was made against SSB’s client requiring them to pay the defendant’s legal costs. As a result, many victims have been left with damp houses and the threat of life-changing legal bills. Holly Lynch, the former Labour MP for Halifax, rightly described it as a “scandal upon a scandal”.

But what was the SRA, the body that is supposed to regulate law firms and protect consumers, doing all this time? The answer is provided by a report by Carson McDowell LLP into this terrible saga which has been prepared for the Legal Services Board (LSB). The report shows that alarm bells were ringing for years about SSB and its activities. The SRA failed to act against SSB and people suffered. The SRA received more than 100 reports relating to SSB between January 2019 to March 2024 but, to quote the LSB, the “SRA did not act effectively or efficiently”. They simply failed to regulate.

Concerns about SSB were raised by multiple, well-informed sources who made them known to the SRA. MPs, barristers and representatives of the Installation Assurance Authority, all urged the SRA to act in the five years leading up to the firm’s collapse. In particular, there were complaints about the way SSB had obtained its cavity wall insulation clients and the fact it appeared to be acting without “adequate instructions” from these clients.

The SRA was also told that SSB was issuing claims that were without merit, including where there was inadequate evidence that damage had been caused by the cavity wall insulation. There were complaints that SSB was using unreliable expert evidence; failing to properly progress cases in a timely manner, including missing key court deadlines and clients being unrepresented at court; failing to pay court fees; failing to ensure adequate insurance cover was in place to cover clients’ potential liability for defence costs and having little or no communication with its clients. There were concerns raised about a lack of supervision of SSB employees acting on cavity wall insulation cases and reports of them breaching the terms of clients’ insurance policies which resulted in clients unexpectedly becoming liable to pay defence costs.

Faced with this relentless tide of troubling evidence, the SRA proved to be utterly ineffectual. In the restrained language of Carson McDowell’s report: “These reports demonstrated a concerning pattern of conduct by SSB which constituted a regulatory issue and went beyond complaints about the service provided by the firm.” The report concludes that the SRA did not comply with its obligations under the Legal Services Act and must improve.

What no legal report can ever do is accurately convey the deep well of human suffering associated with this scandal. Members of the SSB Victims’ Support group told me that the costs orders left some victims feeling suicidal and many no longer trust the legal system.

According to the group, the problems began with the poor monitoring of government grants for cavity wall insulation, with companies targeting vulnerable people through door-to-door sales and installing unsuitable insulation in properties, causing damp and mould. The support group said it has evidence that many of the victims were elderly, unwell, non-English speakers or from low-income backgrounds. The victims, hoping for compensation to fix their homes, instead faced bills running into thousands of pounds, emotional distress, health problems and threats of bailiffs.

The SRA has said it is sorry that it did not act more quickly in relation to SSB, and that its handling of the affair contributed to the harm and distress suffered by vulnerable consumers.

SSB’s treatment of its clients could cause irreparable damage to the reputation of the solicitors’ profession and the civil justice system in general. The SSB saga must act as a watershed in the history of Britain’s legal system; we must hope that the outrage caused by this scandal leads to action which forces the regulator to raise its game and listen more attentively to victims.

Greg Wright is the deputy business editor of The Yorkshire Post.