Exclusive: SRA forced to revise SSB advice after five days

SRA: Statement rapidly amended

The Solicitors Regulation Authority (SRA) has had to revise an updated statement issued just last week for former clients of SSB Group in the wake of questions raised by Legal Futures.

Lawyers acting for SSB clients argued that the regulator has overstepped the mark in the advice it had given.

The focus of the SSB scandal has been the after-the-event (ATE) insurance on cavity wall claims it brought being repudiated, leading to successful defendants and their insurers seeking to enforce substantial costs awards against clients.

In last Wednesday’s updated statement, the SRA said: “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 [professional indemnity insurance].

“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.”

Legal Futures has seen an example of such letters and those working with SSB clients expressed alarm at what the SRA had said, arguing that it had gone too far in recommending courses of action to be taken by lay clients.

A KC, who asked not to be named, told us: “In behaving in this way, it seems to me that the SRA is usurping the role of the client’s own solicitor.”

A solicitor acting for SSB clients added: “The SRA ought not to be fulfilling the role of a solicitor and recommending a poor deal that is riddled with issues.”

We asked the SRA whether it had considered these issues, such as the continuing impact of the debt on the client’s credit rating, the absence of an offer to keep clients updated on the progress of the case, and no offer to cover the costs of the legal advice clients had already obtained on the costs issue.

There was also the question of the impact on the negligence claims that are being prepared against SSB and its insurer, which are for far more than just the costs – they cover issues such as general damages for stress and inconvenience and loss of chance.

Neil Stockdale, a partner at Hugh James, which is also acting for many ex-SSB clients, said: “It is disappointing that the SRA do not appear to have addressed the position of clients that have already instructed their own solicitors to pursue professional negligence claims.

“We have already made considerable progress for our clients and my concern is that the proposed assignment will only increase legal costs and delay matters. We would much prefer that our clients are left alone to progress their own cases.”

As a result, the SRA yesterday added the following to last week’s statement: “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.”

An SRA spokesman said: “We think there are potential benefits to encouraging insurers to take a pragmatic approach to this issue. Many of SSB’s former clients are facing the worry and distress of this unexpected debt, while some may not have means to pay it, or to pursue their own negligence claim against SSB’s insurance.

“We recognise that different insurers will be taking different approaches on this issue. We are still in the process of liaising with insurers so we can understand their approaches and its impacts. Our aim is to keep those impacted aware of their potential options.”

Mr Stockdale’s colleague at Hugh James, senior associate Erich Kurtz, said: “We welcome the SRA’s clarification and urge those effected to take independent legal advice as soon as possible to assess their legal options for redress in addition to any adverse costs liability they face.”

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