Clients of ‘no win, no fee’ legal schemes are being hounded for tens of thousands of pounds and fear they may lose their homes after two law firms collapsed owing millions
Bailiffs are hounding hundreds of clients of “no win, no fee” lawyers for up to £35,000 after their legal firms went bust.
At least 1,500 households have court bills averaging £20,000 after Pure Legal and SSB Law collapsed owing millions. We joined some 100 clients at a victim support group this week to hear their shocking stories. Many have no savings and fear being made insolvent or losing their homes.
Claimants turned to the firms to try to win compensation after installation of wall cavity insulation – as part of a Government-backed initiative – failed, leaving homes damp and mouldy. After losing their cases, they thought they would be covered by the law firms’ insurance. But insurers are now using debt collectors to recoup their costs.
Yusuf Patel – told he owes £28,500 after a county court judge threw out his claim – said: “I am scared I will lose my home. I can’t think, I can’t sleep.”
Erich Kurtz, a financial mis-selling lawyer at firm Hugh James, said: “ATE (after-the-event) insurance is obtained to shield clients from expenses and adverse costs in legal proceedings. But clients and their solicitors must follow the terms throughout the case. If not, the insurer can reject coverage.”
Hugh James is representing some 1,500 SSB Law and Pure Legal clients as local MPs urge Government action.
Liverpool firm Pure Legal closed in 2022 owing £40million. Sheffield-based SSB Law took over thousands of Pure Legal’s cavity wall cases, which quickly proved to have little chance of success. SSB Law went into administration in January, owing £48m. Parent firm SSB Group Ltd also collapsed, owing £200m, leaving householders with bills ranging from £5,000 to over £35,000.
Yusuf, who was at the support group in Burnley, Lancs, believed he was shielded from costs by insurance put in place by SSB. But after its collapse, he learned insurers voided the policy.
He shared a letter from SSB Law that stated: “We can confirm that the claim is one of ‘no win, no fee’ therefore, if the claim is unsuccessful in court, you will not be liable for any fees.” The civil engineer, 54, from Blackburn, said: “I feel completely cheated.”
Ian Lofthouse, 75, of Burnley, got a letter demanding £7,000. The former weaver said: “I am on antidepressants because of this. I live on state benefits.” Mum-of-two Sharon Lord, 47, was given a month to pay £17,000.
The Burnley benefits assessor said: “I went into meltdown. I have never been in debt in my life. I’m already living on the breadline and fear losing my home. I have no savings.”
Michael, 48, and Kelly Ashurst, 46, owed £35,538 after insurers claimed Pure Legal failed to comply with terms. The couple, from Wigan, used life savings and borrowed from family but still owe £20,000. Michael said: “We were terrified of losing our home.” Labour’s Bradford East MP, Imran Hussain, said: “No one should face these unfair demands for payment and that’s why I’ve urgently raised their experiences in Parliament to demand the Justice Secretary ensure demands for payment are dropped and called for the Energy Secretary to offer compensation to those still suffering the consequences of faulty cavity wall insulation.”
SSB Law is being probed by the Solicitors Regulation Authority over misconduct allegations. RSA, one of the insurers chasing costs from clients, this week paused debt recovery work. A spokesman said: “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.”
SSB Law and Pure Legal were asked for comment.
Insurer QBE, which is attempting to take action against Mr Patel, said it had a duty to defend SSB’s claims “robustly as they were without merit”.