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At the end of 2023, we received a number of reports that SSB's clients were unexpectedly being pursued to pay adverse legal costs in relation to their discontinued cavity wall insulation (CWI) litigation claims.

SSB had arranged after the event (ATE) insurance for clients to cover the other side's costs in relation to their CWI claims on a 'no win, no fee' basis. However, the ATE insurance providers have declined to meet the costs as expected under the insurance policy, and so the defendants have pursued SSB's clients for costs. In other cases, it appears that ATE insurance was either not in place or it was insufficient to meet client needs.

Our two immediate priorities remain protecting the public and exploring all possible options for redress for affected clients.

What is after the event (ATE) insurance?

After the event or ATE insurance is a type of legal expenses insurance policy taken out to provide cover for legal costs and expenses incurred in litigation in the event a claim is unsuccessful. These policies are commonly used in litigation, including 'no win, no fee' cases.

You may wish to seek independent legal advice about your redress options to decide what is right for you and your circumstances.

We cannot offer legal advice to clients impacted. Each individual will need to consider their options carefully to decide what is right for them and their circumstances.

You are more likely to need independent legal advice if you are bringing a negligence claim against SSB’s insurance. You may also need it before you consider entering into any agreements – for instance if a cavity wall insulation company or insurer offers to drop a claim and stop pursuing you for costs.

There are online resources which can help you find cost-effective legal support:

• Search: 'SRA Thinking of using legal services?'
• Legal Choices

Your local Citizens Advice branch may be able to provide advice. Search online: Find your local Citizens Advice - Citizens Advice

There are three main options for redress – either a claim for solicitor negligence on SSB's insurance, a claim for poor service by your solicitor through the Legal Ombudsman, or a claim relating to your after the event (ATE) insurance through the Financial Ombudsman scheme. These options are not for rectifying issues with the cavity wall insulation.

Option 1: Claiming on SSB's professional indemnity insurance (PII) for solicitor negligence

All firms we regulate must have professional indemnity insurance (PII) in place. You may be able to seek redress by making a negligence claim directly against SSB's insurance.

You may need independent legal advice and support to pursue a negligence claim against SSB’s insurance.

Option 2: Claiming through the Legal Ombudsman (LeO) for poor service from your solicitor

If you want to complain about the quality of the service you have received from SSB, you should continue to contact the Legal Ombudsman (LeO).

LeO has now started assessing – on a case-by-case basis – whether an investigation into individual complaints is required. If LeO assesses that it cannot assist in individual circumstances, or that it is not the best organisation to do so, then it will let you know as quickly as possible.

Complaints to LeO are subject to time limits. If you are looking to make a complaint, don’t delay. Further guidance on how to make a complaint, and information about time limits, are available on LeO's website.

Option 3. Redress through the Financial Ombudsman Scheme where financial services were involved

There is the potential for redress in specific circumstances through the Financial Ombudsman.

The Financial Ombudsman Service is a free, impartial service that settles complaints between consumers and businesses that provide financial services, such as those involving insurance products like after the event (ATE insurance). You may be entitled to bring a complaint to the Financial Ombudsman Service against your ATE insurers where that insurer has declined to cover the costs awarded against them.

This will depend on the status and location of the ATE provider, as well as the details of the case.

There are also some limited circumstances in which a complaint might be made to the Financial Ombudsman against the professional indemnity insurer for SSB, or the insurers for the installers of the cavity wall insulation. These are usually where the legal right to benefit from a claim has been devolved to you by legislation.

There is guidance on the Financial Ombudsman’s website explaining how you can complain to it (after complaining to the ATE insurance provider first).

You could also consider engaging with the cavity wall installation (CWI) company or insurer pursuing you for costs. They may be willing to stop pursing you for these costs, if you agree to give them the right (in legal terms, 'assign your rights') to make a negligence claim against SSB's insurance.

We have been liaising with insurers who are pursuing claims for costs against SSB's former clients. Some insurers have already agreed to drop some of their claims for costs against individuals on the basis that it takes over their right to seek the money from SSB's insurers, instead. We are also aware of one insurer who has paused claims against individuals while they seek the money through SSB's insurers.

We welcome this pragmatic approach. It recognises the immense distress this situation has caused individuals, could remove the worry and burden of this unexpected debt, while still offering the insurance company a route to seek to claim its costs.

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.

You may need independent legal advice before you consider entering into any agreements, such as an offer to drop a claim, with the cavity wall insulation company or insurer pursuing you for costs.

If you believe that a firm or solicitor regulated by us has stolen or not accounted for your money, you may be able to make an application to recover your loss from our discretionary compensation fund. Our view, however, is that this fund is unlikely to assist former clients of SSB where they are being pursued for costs. The fund is only likely to pay out in situations where the financial loss has resulted directly from dishonesty involving client money or a failure to account for client monies held by a firm, and when there is no other avenue for recovery.

As the fund is a fund of last resort, even if the firm acted dishonestly, under the rules of the fund those affected would need to pursue a claim against the firm or its insurers first. The firm was also not holding client money – former SSB clients are seeking redress for the costs they have been asked to pay for.

Even if an SSB client has exhausted all other avenues of redress, our current assessment is that it is unlikely that claims will qualify for a grant from our compensation fund. However, this is a position we are keeping under continuous review.

We recognise the continued significant distress for clients impacted in these cases, which has raised serious questions about the conduct of solicitors and law firms.

Our two immediate priorities remain protecting the public and exploring all possible options for redress for affected clients.

We have now completed the majority of our SSB investigation. We have already taken action against individuals, with potential further action to come. Further information is available in our separate statement.

We will take action to protect the public where we find evidence that solicitors have fallen short of the high professional and ethical standards we all expect. Such action can include seeking to restrict or stop a solicitor from practising.

We are also progressing our separate investigation into Pure Legal and the solicitors involved. We hope to have completed that investigation soon.

Following the collapse of SSB, some CWI claims were transferred to JMR Solicitors. JMR then decided it could not continue to act in these CWI claims and agreed with Hugh James Solicitors to transfer the cases to that firm.

We are here to make sure law firms meet high professional standards. We liaised with both firms about this process and their obligations, including making sure they informed clients of the planned transfer and their options.

Clients had the option to agree to the transfer of their case and files to Hugh James or, alternatively, ask for their files back and seek representation from another law firm or not seek further representation at all.

Hugh James has published information to support those affected on its website.

Members of the public can find further information in our choosing a solicitor page.

We have seen issues across the wider high volume consumer claims market that extend beyond the failure of SSB. We are concerned that this area of the market is not working as well as it should be, and whether there are appropriate protections in place for consumers.

As well as cavity wall insulation, high volume consumer claims can cover a range of areas, such as housing disrepair, financial services and motor finance commission.

The issues we are seeing spread across multiple sectors - including finance, insurance and claims management. We are working with other regulators and government departments to find solutions.

Legal Services Board review

Separately, our oversight regulator, the Legal Services Board (LSB) has commissioned an independent review to look at the regulatory events that led to the collapse of SSB. We welcome the review and we will take on board any feedback it provides to us and consider any recommendations it makes to improve our work.

Getting expert legal help – and going to court – can be costly. A large number of consumers get access to legal services through high-volume claims work, using conditional fee arrangements (often referred to as work on a 'no win, no fee' basis).

These agreements are very common and most of the time work well, helping people to enforce their rights when this might otherwise have been unaffordable.

We want to make sure people better understand how ‘no win, no fee’ claims can work, including their options, what the risks are, and what they should expect from a legal service provider working to the standards we expect. So we have published a guide for consumers.

Go to A guide to navigating no win, no fee agreements