Consumer claims firm SSB Law, which went into administration earlier this month owing six litigation funders £200m, faces up to 1,400 professional negligence claims, it has emerged.
Erich Kurtz, a senior associate at Welsh firm Hugh James, has been contacted by more than 75 former SSB cavity wall insulation clients.
He said although they had conditional fee agreements and after-the-event (ATE) insurance in place, in some cases the insurance had been repudiated.
Mr Kurtz said he was in discussions with other potential professional negligence clients and believed the total number could exceed 1,400.
Nearly 200 staff were made redundant at Sheffield-based SSB after it formally went into administration. A report of its joint administrators said that, although it had nearly 43,000 cases on its books, this was not enough for a cost base geared towards greater volumes.
It also detailed “challenges” in the firm’s portfolio of cavity wall insulation claims.
Hugh James said SSB Law handled many thousands of cavity wall claims before running into difficulty and its clients are being pursued for costs payable to the other side, averaging around £35,000.
Despite the size of SSB’s debts, however, it had professional indemnity insurance cover in place to meet the claims, Hugh James said.
Mr Kurtz said they were concentrated in the North-West and North-East, while some were in Wales.
Investigations were continuing and he was “trying to get answers” from insurers on why the ATE policies had been repudiated.
He said Hugh James had previously acted in professional negligence cases against the indemnity insurers of consumer claims firm Pure Legal, which went into administration in 2021.
The situation was “similar”, in that three-quarters of the firm’s 150 negligence clients had been pursuing cavity wall claims with Pure but without effective ATE insurance.
Mr Kurtz said the SSB professional negligence clients all had claims which had lost at court, been struck out or discontinued.
“It’s very, very early days and we are still investigating, but in terms of the clients we have signed up, all of them believe they were misled. Win or lose, they thought they would be safe.”
A spokesman for the Solicitors Regulation Authority commented: “We are aware of the concerns of many householders and are investigating these issues.
“We understand a number have already contacted both the Legal Ombudsman and Financial Services Ombudsman to complain about the standard of service they have received.”