'Clients paid a heavy price': Super-regulator censures SRA over £200m SSB collapse

The Legal Services Board has formally censured the SRA over its handling of collapsed Sheffield law firm SSB, after the regulator failed to act on warning signs despite receiving more than 100 reports about the firm.

The public rebuke follows an independent review last year which found the SRA “did not act effectively or efficiently” in overseeing SSB between 2019 and 2024, before the firm collapsed with debts exceeding £200 million.

SSB, founded in 2018, specialised in high-volume civil litigation - particularly cavity wall insulation (CWI) claims - and represented thousands of clients on “no win, no fee” terms. When the firm entered administration in January 2024, many of those clients were left facing unexpected costs.

Regulatory failures

The LSB announced enforcement action against the SRA last October after commissioning a review by Northern Ireland firm Carson McDowell.

That review said the regulator repeatedly missed opportunities to intervene despite mounting concerns about SSB’s finances and conduct. The SRA had received more than 100 reports about the firm over five years, while also placing it on an internal watch list after it took on thousands of cases from the collapsed firm Pure Legal in 2021.

The regulator had also been monitoring firms pursuing cavity wall insulation claims through a programme known as “Operation Grouse”, launched in 2019. Despite those oversight mechanisms, the review found the SRA failed to take meaningful action until it was too late.

As part of the censure, the LSB has directed the SRA to publish mandatory performance targets within seven days addressing the failures identified in the review. The targets will be monitored by the super-regulator, which said it is prepared to take further enforcement action “if sufficient progress is not made”.

Catherine Brown, interim chair of the LSB, said former SSB clients had “paid a heavy price” for the regulator’s failures.

“The SRA had repeated opportunities to act, and it did not,” she said. “That failure allowed harm to grow, and it undermined public confidence in legal regulation.”

More scrutiny on the SRA

In May last year, the LSB issued directions to the regulator after a separate independent review into the collapse of Axiom Ince, where around £60 million in client money went missing before the firm failed in 2023 with the loss of around 1,400 jobs.

The SRA has apologised for its handling of the SSB matter and accepted the findings of the review. The LSB said the regulator has “committed to a programme of reforms aimed at strengthening risk assessment, improving evidence gathering and tightening financial oversight of law firms.”

The LSB, which named Richard Orpin as its new chief executive in January, said it will closely monitor the regulator’s progress in implementing the changes.