Politicians turn up heat on SSB Law “scandal and disgrace”

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Cavity wall insulation: Burgeoning scandal

Concern among MPs about the fall-out from the collapse of Sheffield-based SSB Law is growing rapidly, while one of the insurers that was pursuing its clients for costs has paused its activities.

The focus is on claims for damage caused by cavity wall insulation that it brought under ‘no win, no fee’ agreements and the after-the-event (ATE) insurance it put in place being repudiated in some cases.

This has led to successful defendants and their insurers seeking to enforce costs awards against clients.

According to national law firm Hugh James, which is acting for cavity wall clients bringing claims for professional negligence against SSB, the average costs claim is in the region of £20,000. Other law firms involved include WE Solicitors, TEN Legal, Hayden Solicitors and Specters.

Nearly 200 staff were made redundant at SSB after it formally went into administration in January, owing six litigation funders £200m.

There have been national media reports, local meetings of affected clients in the North of England and MPs speaking out.

Seventeen MPs have so far signed an early day motion in Parliament – used to call attention to issues – about the collapse of SSB and the impact of its former clients.

It urges the government “to ensure that all demands for payment and court orders resulting from the collapse of SSB Law are dropped immediately”, and calls for an independent investigation into what has happened.

It also “requests that the Solicitors Regulation Authority publish all information that they received which identified SSB Law as a potential regulatory risk, along with the full findings of their investigation which concluded there was no need for regulatory action”.

Last week, Bradford West MP Naz Shah held a meeting with over 20 families facing costs demands. “This is both a local crisis and a national scandal,” she said.

The Conservative MP for Burnley, Antony Higginbotham, was the first to raise the issue in Parliament and has pledged not to let it drop.

Holly Lynch, Labour MP for Halifax, described what was happening as “a scandal on top of the scandal” of cavity wall insulation in the first place.

Ms Lynch said she had written to Lord Chancellor Alex Chalk about it in December but had not had a response.

In a question to leader of the House of Commons Penny Mordaunt, she asked for help “to find ways in Parliament to co-ordinate all those across the north who have been affected—we expect there are hundreds, if not thousands—and to get a response so that we can look after those people, some of whom are among the most vulnerable and have received extortionate bills telling them that they owe thousands of pounds?”

Ms Mordaunt said she would raise it with Mr Chalk. “My office stands ready to assist her in getting this matter resolved for her constituents,” she added.

Imran Hussain, Labour MP for Bradford East and one of those behind the early day motion, has also written to Mr Chalk to demand action.

Last week, Judith Cummins, Labour MP for Bradford South, described the situation SSB clients were facing as “a scandal and a disgrace, as not only do they now have considerable damage to their homes, but they have to pay the additional legal costs on top”.

Energy minister Amanda Solloway observed that “not all” of the claims management companies and law firms which contacted consumers offering to represent them in cavity wall claims “have the consumer’s best interests at heart, and some have left consumers facing extensive legal fees”.

In a separate development, insurer RSA said it was continuing to pause its costs recovery work.

A statement explained: “Over the past few years, SSB Law has represented individuals in claims against ourselves as the insurer for a number of now insolvent cavity wall insulation businesses.

“Where a litigated claim has failed, this resulted in the individual becoming liable to meet RSA’s court awarded costs. We have no direct knowledge of whether SSB Law had made their clients aware of the liability if their claim failed, or if assurances were given as to how that liability might be met.”

He said RSA had been working with SSB Law to resolve these matters directly, and suspended recovery of unpaid costs after SSB “failed to respond” to client concerns.

The insurer was now “actively working with all parties involved in the administration process to understand how we might find a way forward for all concerned, including those individuals who have agreed to settle their costs liability.

“We confirm enforcement action remains suspended while we move towards a resolution.”