Red flag: SRA missed several warning signs
At the heart of the Carson McDowell report [1] into the Solicitors Regulation Authority’s handling of SSB Law is the argument that the regulator missed opportunities to act earlier.
This is a timeline of what the SRA knew and when:
January 2019: SSB begins receiving CWI claims from claims management companies (CMCs).
Early 2019: Following a meeting held by the government with various stakeholders to discuss concerns about CWI claims, SRA forms Operation Grouse, a working group to monitor such cases.
2020
18 June: First report to SRA from a client/consumer about SSB’s handling of CWI claims, alleging the forging of a signature on a conditional fee agreement.
7 July: SRA issues a warning notice to the legal profession on CWI claims.
17 July: First report to SRA from a CWI installer.
Installer complaints include concerns that SSB is soliciting clients unlawfully, not carrying out appropriate due diligence, and not demonstrating legal competency.
2021
27 May: Report to SRA from the Insurance Fraud Bureau about SSB.
This raises concerns that SSB is cold-calling potential clients and using harassment tactics to persuade them to bring claims, that it is writing to installers without carrying out adequate due diligence in respect of potential claims, and inflating damages.
22 July: The SRA discussed themes of poor conduct by law firms carrying out CWI claims in its publication, Upholding Professional Standards 2019/20.
26 August: Report to SRA from the Installation Assurance Authority, raising similar concerns.
November 2021: Pure Legal enters administration and transfers its CWI claims to SSB.
By this point, the SRA has received four reports from clients/consumers, raising concerns including soliciting of clients, lack of compliance with due diligence procedures, pursuing claims without sufficient evidence, and alleged falsification of expert evidence.
It places SSB Law on a ‘watchlist’ to allocate a specific investigation officer to consider reports about the firm, which was the practice after the SRA received three or more reports in close succession.
2022
11 February: First report to SRA from the solicitor manager (SM) of Pure about SSB’s handling of CWI claims.
The SM reports that Pure’s case book was underfunded and underinsured, and that SSB has advised many of its clients to discontinue their claims. They state that SSB’s clients were mistakenly led to believe that a discontinuance would be the end of the matter and there would be no costs implications for them.
The SRA receives two reports from Pure clients transferred to SSB stating that their respective CWI claims were discontinued due to issues with funding and after-the-event (ATE) insurance.
31 March: First report to SRA from another law firm about SSB’s handling of CWI claims.
This concerns failings by SSB in progressing CWI claims, including missing key deadlines and court dates for clients, as well as court fees going unpaid.
19 October: Second report to SRA from the solicitor manager of Pure, reiterating the concerns raised in February.
By this time, the SRA has received a further 11 reports from clients, citing concerns about SSB’s professional conduct and its management of CWI cases, for example, failing to comply with court directions and missing court dates, leading one case to be struck out.
A number of these clients report that their claims have been discontinued and that they are now being pursued for the defendant’s costs due to lack of ATE cover.
The SRA has also received a report from a second law firm that SSB is obtaining referrals from an unregulated CMC. The referrals relate to timeshare claims, rather than CWI. The SRA ultimately concludes that SSB instructed an unregulated CMC and issues a warning to the law firm.
A third law firm reports concerns regarding SSB’s use of expert evidence, its lack of proper supervision of employees, and lack of advice provided to its clients regarding adverse costs risks and insurance.
2023
10 March: First report to SRA from a barrister, complaining that SSB has failed to pay their fees of £260,000 for work in relation to 289 CWI cases.
The SRA also receives an anonymous report which cites concerns that SSB is using claim funding to discharge operational costs and regularly failed to repay loans, suppliers, experts and counsel, and that issues with ATE funding had caused clients to be required to pay adverse costs. The SRA receives an additional seven reports from SSB’s clients around this time.
14 April: SRA commences a forensic investigation into SSB on the back of the barrister’s report. Despite identifying that SSB’s current funder debt is in excess of £128m, the SRA closes the investigation and determines that there is no evidence that SSB is in financial difficulties.
26 September: SSB announces decision to close CWI department.
24 October: SRA commences second forensic investigation.
The SRA receives a further three reports from clients of SSB stating that their CWI claims were underfunded and underinsured. They allege that SSB had recommended they discontinue the claims but did not advise them of the costs implications.
The SRA receives an anonymous report from a former SSB employee advising that the firm routinely litigates unsuitable cases and that it falsifies its accounts.
The investigation is commissioned in response to a whistleblower report which identifies that SSB is in serious financial difficulties and has funding exposure in excess of £150m. It also states that SSB exposes its clients to substantial adverse costs orders, fails to obtain ATE insurance, and pays large dividends to its directors against future profits.
This time, the SRA accepts that SSB is in serious financial difficulties and begins to work with the firm to shut it down.
20 November: SSB files a notice of intention to appoint administrators.
12 December: First report to SRA from an MP. Between then and February 2024, another 35 client reports are received.
2024
4 January: SSB enters administration, putting 200 people out of work and owing funders more than £200m.