The SRA is under pressure from government to address alleged misconduct in bulk litigation firms. The profession has a case to answer, but councils must not be given a free pass.

No details were divulged, but when the Ministry of Justice summoned the Solicitors Regulation Authority for talks last month about so-called bulk litigation firms, one can imagine the overriding message was: ‘Do something!’

MPs’ inboxes have been filled over the past two years with messages from clients of firms which thought they had a claim for housing disrepair, cavity wall insulation or finance mis-selling. Many of the firms that ran thousands of these claims have collapsed, and those clients are now facing demands to pay defence costs despite ‘no win, no fee’ assurances.

The SRA has been concerned for some time about potential misconduct in such claims. The involvement of the government suggests that disciplinary action could be stepped up; and legislation to restrict these areas of work may not be far behind.

The regulator has more than 80 live investigations across 74 firms running 200,000 claims between them. The costs of this enforcement work are a significant contributor to the SRA’s budget increase of £16.6m next year.

Six matters relating to the closed Sheffield firm SSB Law are at an advanced stage of investigation. Questions remain about whether claims had adequate insurance cover and the methods used to on-board thousands of cases.

SRA chief executive Paul Philip said this week: ‘It is a huge issue and we have very serious concerns about firms involved in bulk litigation.’

Amid political and regulatory pushback, local authorities sense an opportunity. They are often the defendants in housing disrepair claims from tenants, and with finances stretched, they are keen to bury this burgeoning sector.

As the SRA and government were putting their heads together, City of York Council fired a shot across the bows of claimant firms. It highlighted a recent case heard in York County Court in which the claimant solicitors – whose identity was not revealed – were required to pay the £9,414 costs of bringing a tenant’s unmeritorious claim. According to the council, the district judge in the case described the firm’s handling of the matter as ‘borderline negligent’ and ruled that the client should not be burdened with the costs.