The Solicitors Regulation Authority (SRA) has been formally censured by the Legal Services Board (LSB) over its failure to protect consumers affected by the failure of SSB Group.
The LSB’s report into the SRA’s handling of SSB Group identified “prolonged delays in identifying and responding to clear warning signs” at the firm, with the decision to censure the regulator taken as a result of “the systemic nature of the operational, cultural and governance issues highlighted in the Review,” the LSB said in a statement published this week.
SSB Group collapsed in 2024 reportedly owing £200 million to litigation funders following work on cavity wall insulation claims, amongst other claims work. An independent review instructed in 2024 found the SRA had missed the opportunity to respond “effectively or efficiently” despite more than 100 reports relating to SSB’s activity from January 2019 to March 2024. The SRA also reportedly knew about issues at the firm a year before it failed, according to the LSB.
While the review identified specific failures relating to the circumstances surrounding SSB Group’s failure, the SRA was also found to have fallen short in its role as a regulator around issues including siloed staff working, over-reliance on information from firms rather than independent verification, and poor internal governance, documentation and decision-making.
It was also noted the regulator has “underused” its statutory powers to investigate and gather evidence, ultimately failing to protect vulnerable clients.
The SRA said it has “accepted the findings of the Review and is committed to implementing its recommendations in full,” with the LSB acknowledging the regulator’s cooperation and openness. It is now addressing output of the review, including the setting and publishing of performance targets within the next seven days.
Catherine Brown, interim chair of the Legal Services Board, said:
“SSB’s former clients have paid a heavy price – many threatened with losing life-changing sums of money and facing serious personal distress. The SRA had repeated opportunities to act, and it did not. That failure allowed harm to grow, and it undermined public confidence in legal regulation.
“This censure is a clear public statement that the standard of regulation we saw was not acceptable. The SRA has accepted the findings of the review and committed to implementing its recommendations. Now it must demonstrate, through its actions, that it has fundamentally changed its approach and that it is committed to, and capable of, effectively protecting consumers.”
The SRA has apologised and acknowledged the harm caused to SSB’s former clients. The regulator said it is committed to a programme of reforms, including cultural change, improved risk assessment, strengthened evidence-gathering, and enhanced financial oversight of firms.
The LSB’s decision to take enforcement action is outlined in its Decision Notice.
