RSA: Offer will remove burden from SSB clients
Former clients of the collapsed SSB Group are “confused and uncertain” about an insurer’s offer to stop pursuing them for costs if they assign their claims against the law firm, with solicitors advising against it, Legal Futures can reveal.
But the insurer, RSA, argues that it is taking the “correct, measured and appropriate approach” to the issue, pointing to the backing of the Solicitors Regulation Authority (SRA).
The focus of the SSB scandal has been the after-the-event (ATE) insurance on failed cavity wall claims it brought being repudiated, leading to successful defendants and their insurers seeking to enforce substantial costs awards against clients.
Many of the clients are in no position to pay what is owed and their cause has been taken up by several MPs.
Legal Futures has seen the letter and form of assignment sent by RSA’s solicitors, insurance giant Clyde & Co, to former SSB clients.
It says that, in exchange for not pursuing them for payment of the costs owed, the client must assign to RSA any rights of action they may have against SSB and its professional indemnity insurers, their ATE insurer, and counsel and experts instructed on their behalf.
RSA agrees not to pursue the client for the costs if it fails to make a recovery from these actions. It also makes clear that RSA’s action will not extend to the client’s loss of chance of a successful claim.
It also offers to contribute up to £500 + VAT for the client to take independent legal advice on the offer, on condition that the assignment is signed.
Lawyers already acting for former SSB clients have outlined to us concerns about the offer, 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 is 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.
Debra Sofia Magdalene, administrator of the SSB Victims Support Group, said that though a few “have expressed relief” and accepted the offer, “the majority are confused and uncertain about what to do next”.
They remained “cautious of the underlying intentions” of RSA and Clyde & Co, she said.
“They are apprehensive about accepting the offer, unsure of the potential consequences, and are waiting to see how others respond.
“While some solicitors advise against accepting the offer as it stands, many victims are simply looking for a way to alleviate their stress.”
Ms Magdalene said that those who have already engaged solicitors for professional negligence cases faced a dilemma.
“Accepting the RSA offer would incur costs for legal services already rendered, effectively trapping them in their current claims and making it financially impossible to accept the offer even if they wished to do so.”
There was also concern about the fact that RSA would not pay towards independent legal advice if the client then decided not to sign the deal. Many could not afford this.
She continued: “Had Clyde & Co presented their offer earlier and incorporated requested changes directly into the agreement rather than addressing them through emails, there might have been a higher acceptance rate.
“A major issue with the offer is the loss of control for victims. They must provide evidence and potentially appear in court, a process that could drag on for years, which is particularly daunting for vulnerable individuals.”
An RSA spokesman said: “Our solicitors, Clyde & Co are making contact with all the individuals who became liable to meet our court awarded costs following failed cavity wall claims brought by SSB Law.
“We reiterate that enforcement action remains suspended and we have asked these individuals if they would be willing to sign over their rights, limited to their costs liabilities to us, so we can claim against SSB Law’s insurers in their place.
“This is at no cost to them and importantly with no recourse against any of them should we not make a full recovery. We are also not standing in the way of any of them seeking to recover any other losses they have suffered from instructing SSB Law.”
He said RSA believed its approach would remove “the burden” on the individuals while giving it the chance to recover at least some of its court-awarded costs “in a joined up and streamlined way across the group of individuals impacted”.
He added: “The Solicitors Regulation Authority (SRA) has welcomed our approach and we continue to receive some very positive messages from those who recognise what we are doing and why.
“We believe this is the correct, measured and appropriate approach yet we remain very mindful of the impact the litigation has had on the individuals.
“We’d urge those with costs liabilities to us to get in touch and to discuss their individual circumstance if they feel our approach hasn’t quite addressed any concerns they may still have.”
Earlier this month, the SRA issued a statement that referenced assignment deals, saying it had written to other insurers to say “we believe there is a benefit in [them] taking a similar, pragmatic approach”.
Lawyers acting for SSB clients argued that the regulator has overstepped the mark with this advice.
As a result of our questions about whether the SRA had considered the concerns that had been raised about RSA’s offer, the regulator amended the statement to make it clear that it was not offering legal advice to clients impacted.
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