Recent reports have highlighted troubling experiences of former clients of defunct claims firms, who for years lived under the weight of high-interest loans taken out to fund their claims in the cavity wall insulation case. Many say they were never clearly told they were signing up to a loan, let alone one carrying significant costs and risks.
These loans often covered after-the-event insurance, surveyor reports, or solicitor fees. From the moment funds were drawn, clients faced accumulating interest. When claims failed, not only were many left with these debts but also exposed to potential defence costs, creating years of stress and financial uncertainty.
Now, some of these loans have suddenly been cancelled, with lenders informing clients that their debts have been cleared and accounts closed. While welcome, this outcome leaves important questions unanswered: Who paid these loans off? Why did it take so long? And why were people forced to endure years of unnecessary anxiety about debt collectors?
These cases reflect broader concerns that Fair Civil Justice has consistently raised:
- Transparency: Consumers should not be exposed to complex, high-interest funding arrangements without full transparency.
- Fairness: Litigation funders and firms must not profit disproportionately while consumers unknowingly bear the risk.
- Oversight: Stronger oversight is needed to ensure redress mechanisms are fair and accessible.
We welcome the SRA’s ongoing investigations into these cases, and their stated commitment to exploring options for redress made in July:
“We recognise the continued significant distress for clients impacted in these cases, which has raised serious questions about the conduct of solicitors and law firms. Our two immediate priorities remain protecting the public and exploring all possible options for redress for affected clients.”
Litigation should always be a last resort. When it is unavoidable, the process must be fair, proportionate, and transparent. Only with a stronger framework of oversight and accountability can we restore confidence that civil justice works for everyone and is not a mechanism for financial profit.
