Philip: SRA investigated a very specific matter at SSB
The Legal Services Board (LSB) is to probe the Solicitors Regulation Authority’s (SRA) actions in the lead-up to the collapse of SSB Group, it has announced.
There have been questions about whether the regulator could have done more to identify problems at SSB, which went into administration in January owing six litigation funders £200m.
The LSB said it would add the work to the scope of its current independent review into the regulatory events prior to SRA’s intervention into Axiom Ince, on which it is working with Northern Ireland law firm Carson McDowell.
It remains the aim to report on Axiom in this spring, with the SSB review and “overall learning and conclusions” being published in the summer.
The LSB statement said: “Given the considerable consumer detriment, the board believes that it is important to understand the regulatory events in relation to both firms. Learning from these cases will be vital for public and professional confidence.”
The move comes on the back of increasing concern expressed by MPs, and coverage in national media, about SSB.
A newly published statement of affairs, signed by SSB director Steven Westwood in early March, now puts the law firm’s overall indebtedness at £221m.
The main addition to the list of creditors is £17m owed to Your Claim Matters, a claims management company specialising in financial mis-selling, which was the bulk of SSB’s work.
The focus of the SSB story, however, is on the cavity wall insulation claims it ran where the after-the-event (ATE) insurance it put in place is being repudiated, leading to successful defendants and their insurers seeking to enforce substantial costs awards against clients.
This has led to complaints to MPs and the media.
The SRA is itself investigating why the ATE insurers have not paid out and whether wider issues in relation to ATE insurance have been exposed.
It is known that the SRA visited SSB last spring, but speaking at a press briefing earlier this week, chief executive Paul Philip said this was in relation to a “very specific matter”.
He explained: “That doesn’t mean we look at everything in the firm; we look at the very specific matter that’s been reported as part of the complaint.”
He said the SRA was also looking at whether there was misconduct that needed to be addressed and was in “active correspondence” with MPs.
Mr Philip added that the regulator would shortly issue a warning notice on bulk litigation like SSB handled and how law firms should deal with it.
Law Society chief executive Ian Jeffery welcomed the LSB’s move, saying: “As the oversight body responsible for assessing and monitoring effective and transparent regulatory performance, the LSB has the necessary investigation and enforcement powers to ensure that the events and regulatory actions relating to such serious incidents are fully brought to light.”
