The Solicitors Regulation Authority has received a formal censure for its handling of the collapse of SSB Law – just the second time such a sanction has been issued.
The Legal Services Board said the censure was necessary to reflect the seriousness of the failings identified in an independent report published last year, as well as the profound detriment suffered by consumers.
The only other time the LSB has taken such an approach came in 2018 when the Law Society was sanctioned for its non-compliance with the rules around separation with the SRA.
The solicitors' regulator has already accepted its failings on SSB Law and has outlined plans for performance targets to indicate whether it has improved its monitoring of firms that may present a risk.
SSB Law specialised in no win, no fee cases but when it entered administration in January 2024, many clients faced unexpected costs bills for thousands of pounds. In total, the SRA received more than 100 reports raising concerns about the Sheffield firm between January 2019 and March 2024, but repeatedly failed to respond adequately.
The LSB-commissioned report found the SRA fell short in several ways. It repeatedly delayed responding to warning signs; while staff failed to identify patterns of risk, relied too much on information provided by SSB itself, did not make enough use of statutory powers to investigate and gather evidence, provided inadequate protection for vulnerable clients and demonstrated poor internal governance, documentation and decision-making.
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Following the report, the LSB directed the SRA to set and publish mandatory performance targets, and made clear it was prepared to take further action if sufficient progress was not made.
Catherine Brown, interim chair of the LSB, said: ‘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 committed to, and capable of, effectively protecting consumers.’
The latest censure effectively marks the conclusion of the statutory process. The SRA has apologised, acknowledged the harm caused to SSB’s former clients and committed to a programme of reforms, including cultural change, improved risk assessment, strengthened evidence-gathering, and enhanced financial oversight of firms.
SRA chief executive Sarah Rapson, who joined the organisation in November, said the regulator is proactively making wider changes in addition to the performance targets to increase trust and effectiveness.
She added: ‘As the new chief executive, it is incumbent upon me to recognise and address the failings brought to light by the collapse of SSB. Since I arrived, I have been listening to views from a variety of stakeholders about where the SRA can improve. I have also had the opportunity to stand back and consider what needs to change. There is much to do to make sure we are a trusted, proportionate and effective regulator. We must get the basics right and be less reactive.
‘The plan we have outlined today sets out the work that needs to be done and the targets against which we will measure our progress. In particular, these will focus on proactively identifying and responding to risks to consumers within the legal sector; targeting resources more effectively to better address and prevent harm to consumers; and taking action more quickly to deal with potential causes of consumer harm.’
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