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It's because the firm's insurers have declined to indemnify (a declinature which was then upheld by an arbitrator). If the investors want their money back, their only real chance is to get it from the Compensation Fund. The SRA wants to avoid paying out under the Fund, because the claims amount to tens of millions.

I'm not sure that re-running the SDT proceedings is worthwhile. The nub of the matter (from the point of view of making claims upon the Fund) is not whether there was dishonesty, but whether the work falls within the scope of the Fund. The SRA says that the claims are outside the scope of the Fund, because the matters which gave rise to them are not "part of the usual business of a [solicitor]" (Compensation Fund Rules, Rule 3.4).

The SDT will not decide that issue, because it's not part of its function to decide it; its existing judgment contains comments which are not helpful to investors on that point. The High Court would decide the issue. You'd need to get a rejection of a relevant claim by the SRA under the Fund and then apply for judicial review of that claim.