Former clients of the collapsed firm SSB Law have called for CFA rules to be tightened as they wait to find out whether they will face legal bills for thousands of pounds.
The Gazette understands that professional indemnity insurers for the firm have contacted lawyers for the clients to say they are still investigating policy coverage for claims made against SSB.
Clients who instructed the Sheffield firm to run cavity wall claims have been contacted in the last year with demands for repayment of defence costs after the cases were discontinued. The firm went into administration in January and in August it was revealed the business does not even have enough assets to pay administrators’ fees.
SSB’s insurers have paid almost £65,000 in respect of claims against the law firm, but liability for cases where people had cavity wall claims is still in dispute.
David Wingate, of Manchester firm WE Solicitors, who is representing some of the SSB clients, said: ‘The delaying tactics employed by SSB’s insurers are wholly unacceptable. They have had 10 months in which to investigate these claims and the victims need a response without having to enter into further litigation.’
Meanwhile, former clients who have formed the SSB Victims Support Group have called for legal regulators to clamp down on lawyers’ promises to run cases on a no win, no fee basis.
Debra Magdalene, an administrator for the group, spoke at a meeting of MPs and experts this week, calling for government intervention to repair damaged homes and tighten the rules on lawyers’ conditional fee arrangements.
She said: ‘We need to ban this term “no win, no fee” because it is misleading. We need fair practices to ensure homeowners are not trapped by legal costs.’
Magdalene said that members of the group have gone to work and been called by partners at home to say that bailiffs have arrived to enforce outstanding bills, threatening to take away the family television and even children’s toys.
They had been approached to make claims – in some cases through cold calls at their front door – and believed that there would be no risk. SSB had arranged ATE insurance for clients but these providers have declined to meet the costs as expected.
The Solicitors Regulation Authority is looking at the ATE insurance obtained and whether the solicitors complied with their obligations to keep the insurers updated regarding the merits and progress of claims.
Imran Hussain, MP for Bradford East, said constituents have been landed with bills for defence costs coming to £35,000. ‘This was through no fault of their own and now they have nowhere to turn – it is a grave injustice and a national scandal,’ he said. ‘The insurance company in the case has tried its best to avoid liability which brings into question the whole no win, no fee side of things.’
Erich Kurtz, a senior associate with Hugh James who represents some SSB clients, added: ‘The task former clients face has been truly overwhelming. It is dreadful the distress and anguish so many have faced having to deal with adverse cost orders through no fault of their own following the failure of their cavity wall insulation claims.’
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