SSB Law collapse: Call for single risk and intelligence hub

The collapse of SSB Law, which was £200m in debt and left thousands of vulnerable clients facing unexpected adverse costs orders, “was not a shock; it was a systems failure foretold,” according to Paul Crook, a member of the Legal Services Consumer Panel.

In October, an independent review commissioned by the Legal Services Board (LSB) said the Solicitors Regulation Authority (SRA) “missed opportunities” to step in earlier than it did in October 2023, having received the first complaints about the Sheffield firm’s handling of cavity wall insultation claims in June 2020.

It said: “The SRA failed to coherently draw together all the information which it held about SSB, failed to adequately assess the reports it received, and failed to carry out effective investigations in response to [them].”

The SRA has apologised and the LSB has set its enforcement process in motion to issue a public censure to the SRA and put performance targets and monitoring in place.

Writing on the panel’s blog, Mr Crook argued that a “mandated, centralised risk and intelligence hub, accessible to all regulators” was needed to prevent similar collapses occurring in the future.

“Consumer complaints, whistleblower testimonies and conduct reports painted a clear picture of a firm veering towards disaster,” he explained. “It is not that the SRA missed an obscure signal. It is that the entire system is architecturally designed to fail, preventing anyone, even the oversight regulator, from seeing the full picture until it was too late.”

The system, he said, operated in silos with “an artificial chasm between “service” and “conduct” complaints”. Service complaints such as unexplained fees or poor communication go to the Legal Ombudsman (LeO), while conduct complaints, such as misleading advertising or breaches of accounting rules, go to the SRA or other regulators.

Whistleblower alerts, which he described as “the most critical early-warning system”, are often relegated to separate, less visible channels.

In the case of SSB Law, over 100 complaints were submitted to the SRA but, said Mr Crook, they were “reviewed in isolation” and “dismissed as individual service disputes”.

He argued for cultural change at the SRA with “a shift from a dispute-resolution mindset to an intelligence-gathering mindset”, with every single consumer contact, “whether a formal complaint, a query or a whistleblower tip-off” treated as “a critical data point”.

Calling for “smarter, integrated regulation” he explained that a centralised risk and intelligence hub should include:

• LeO’s service complaint data;
• SRA conduct reports and inspection findings;
• Formal and informal whistleblower submissions;
• Critical financial and operational data from firms (e.g. professional indemnity insurance status, bank statements); and
• Data from other bodies, such as the Financial Conduct Authority (FCA).

Bringing together this data could “flag firms showing early signs of systemic failure”, Mr Crook explained, identifying problems long before the imminent collapse of a firm.

This, he said, would follow the example of the FCA, which “treats all consumer feedback as vital risk intelligence, using integrated data to spot and intervene in failing firms early, preventing wider consumer harm”.

He concluded: “To continue with the status quo is no longer an error of judgment; it is a conscious choice to risk repeated consumer harm.

“The evidence is irrefutable. The technology is available. The models are proven. The only remaining question is: do we have the will to protect the public?”