The government and the Solicitors Regulation Authority have met to discuss concerns over the activities of firms running bulk claims, it emerged this week.
SRA chair Anna Bradley met twice with ministers in June for roundtables to discuss this area of litigation. The meetings were revealed in board papers released today, but no further details were given about what was discussed.
The SRA is known to be particularly troubled by the growth of bulk litigation firms and the impact of clients when these firms fail or the claims are unsuccessful.
The regulator has more than 80 live investigations across 74 firms with potentially 200,000 plus claims between them, most commonly relating to financial products, housing disrepair and cavity wall insulation.
In relation to closed Sheffield firm SSB Law, six matters are at an advanced stage of investigation over former clients unexpectedly being pursued to pay adverse legal costs in relation to discontinued cavity wall insulation litigation claims.
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Chief executive Paul Philip said: ‘It is a huge issue and we have very serious concerns about firms involved in bulk litigation.’
Meetings with ministers suggest that the government is paying close attention to the rise of these firms.
In the House of Commons last month, Huddersfield MP Harpreet Uppal urged the Ministry of Justice to give an update on the SRA investigations, adding: ‘Sadly, some of my constituents have experienced a double blow, not only from having defective cavity wall insulation installed, but from being pursued for adverse legal costs by firms such as SSB Law.’
Justice minister Sarah Sackman expressed her regret at the impact of the collapse of SSB Law and promised to provide a written update on SRA work.
The extent of the SRA’s enforcement work involving bulk litigation firms is a key factor behind the regulator increasing its budget by £16.6m (around 11%) next year.
The proposed £86.5m budget for 2025/26 was voted for by the SRA board last week and will be subject to final approval by the Legal Services Board. The regulator expects that individual solicitors will not have to pay any more once reduced compensation fund contributions are taken into account. The increase will also be absorbed in part by an expected increase in the number of solicitors paying the PC fee.
The total amount to be collected from firms through the entity fees will increase from £79.1m to £89.0m. The impact on individual firms will vary depending on how their turnover has changed over the two years.
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