The collapse of SSB Law in January 2024 remains one of the most consequential events in the recent history of litigation funding, but the story is far from over.
As reported by Law360 and the Law Society Gazette, a £19.5 million High Court claim has been brought against SSB’s ATE insurer: a reminder that when a funded law firm fails, recovering capital is often a long and complex process, likely to involve contested litigation. We are instructed in that claim, acting for Katch Fund Solutions.
What happened at SSB Law?
SSB Law developed a substantial portfolio of conditional fee agreement claims in the cavity wall insulation sector. Heavily backed by litigation funding, including by Katch Fund Solutions, it accumulated debts exceeding £200 million before entering administration in January 2024.
The Solicitors Regulation Authority (SRA) and Legal Services Board (LSB) reports that followed identified warning signs visible from 2019 onwards: consumer complaints, concerns over expert evidence, allegations of forged documents and concerns regarding inadequate ATE cover were all flagged repeatedly before meaningful regulatory action was taken. By the time the SRA intervened, thousands of clients faced adverse costs orders they had not expected, and funders faced uncertain recovery prospects.
The new battleground: ATE Insurers
Katch Fund Solutions, having obtained an assignment of the claim from the SSB administrators, has issued a £19.5 million claim against Stonefort Insurance S.A. (formerly Builders Direct S.A.) in the Commercial Court, King’s Bench Division.
The proceedings concern the ATE insurance arrangements covering SSB Law’s cavity wall insulation clients. The claimant alleges that these arrangements did not provide the protection they were intended to deliver. The litigation raises questions as to the adequacy and effectiveness of the ATE underwriting that underpinned SSB’s funding model, including the scope of cover and whether the insurance arrangements performed as expected – matters which are yet to be determined by the Court.
These proceedings remain before the Commercial Court and the allegations made by the claimant have not yet been determined. Stonefort Insurance S.A. has not yet had the opportunity to respond to the claim in these proceedings, and nothing in this article should be read as suggesting that liability has been established.
The case illustrates that recovering funder capital does not end with administration: it may require pursuing litigation that is likely to involve complex and contested issues, together with the specialist expertise to do so effectively. Erich Kurtz, Partner at Hugh James, is instructed, alongside Alexander Hutton KC of Hailsham Chambers and Andrew Clark of Nine Chambers, acting for Katch Fund Solutions.
Why this matters for litigation funders
This litigation raises issues that funders across the sector must now grapple with:
- Due diligence on ATE quality. An ATE policy alone is not sufficient protection. Underwriting quality, satisfaction of conditions precedent, and the financial standing of the insurer all require independent scrutiny before capital is deployed.
- Claims viability and oversight. Independent assessment of a funded caseload, before investment and throughout the funding relationship, has become increasingly important.
- Counterparty exposure. When a funded firm fails, funders may find themselves as unsecured creditors in an administration with uncertain recovery prospects. Structuring investments to mitigate that exposure is essential.
The broader pattern
SSB Law is not an isolated case.
McDermott Smith Law entered administration in July 2024 owing £37.5 million to creditors; Fenchurch Legal, the funder that triggered that administration, itself entered administration in April 2026, illustrating how distress in funded firms can cascade directly into the funding ecosystem. These cases point to broader structural vulnerabilities that can arise within high-volume claimant practices more generally, including over-leveraged business models, dependence on high-volume bulk claims, and the risk of inadequate ATE cover.
The Carson McDowell report, commissioned by the LSB, concluded that the SRA had repeatedly dismissed connected consumer complaints as isolated service issues, and that this reflected, in the report’s assessment, a missed systemic pattern of misconduct.
According to the report and related regulatory commentary, thousands of clients believed their claims were risk-free, and some former clients have reported facing debt collectors and court orders they had not anticipated. If borne out, capital deployed without adequate safeguards does not merely create financial risk; it risks consumer harm on a significant scale.
What funders should be doing now
Funders operating in this space should be:
- Conducting effective due diligence on regulatory standing, case quality, expert independence, and the robustness of ATE arrangements;
- Monitoring portfolio firms actively, with ongoing oversight of case management and claims conversion rates;
- Taking specialist legal advice early at the first signs of financial distress in a funded firm; and
- Engaging promptly with the recovery process, including exploring claims against insurers or other third parties.
Final thoughts
In my experience, the lesson from SSB Law is not simply that oversight failed for multiple reasons; it is that meaningful recovery may be achievable in appropriate cases, but only where funders act decisively and early.
These proceedings show that the collapse of a funded firm does not necessarily mark the end of potential recovery options; where policies, structures or conduct fall short of what was promised, there may be routes to recovery worth pursuing. My view is that the funders who come out of this period strongest will be those who treat due diligence as a continuing discipline rather than a one-off exercise, and who are prepared to pursue robust legal claims where the protections they were sold do not hold up. That is the approach we bring to every instruction in this space.
