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24 July 2023 | Comment | Article by Erich Kurtz

No win no fee case lands client with £35,000 legal bill


When Michael and Kelly Ashurst agreed to bring a ‘no win no fee’ claim relating to cavity wall insulation they never thought they would end up facing a legal bill for £35,538.25.

On 16 December 2021 Kelly was at home, looking forward to Christmas with her family and caring for daughter and autistic son. She then heard a knock at the door during teatime.

She didn’t know the person outside but introduced herself and asked how she could help.

Kelly was handed a formal looking document. She was told it was a statutory demand and that she had 18-days to make payment. If she didn’t, she might be made bankrupt.

Kelly thought at first it was a mistake. It couldn’t be a debt her or her husband owed as they had always been so careful with money. Kelly read on and started to realise the demand for payment was because of legal fees in a cavity wall insulation claim from a year earlier.

Kelly thought it was a scam and explained all the problems they had had with damp in the property – the process server was sympathetic and explained he had heard similar stories from others he had to serve statutory demands on.

Kelly hadn’t realised but her family had come to the door and witnessed everything. Her son became visibly anxious, sensing that Kelly was distressed, he was deeply upset and couldn’t finish his meal.

Speaking of her experience, Kelly said:

“I was mortified, and I didn’t know what to do. How could this be right? Pure Legal had assured Michael and I from the start that if the case lost, we would be able to walk away no owing anyone anything. It was that evening when the sleepless nights began, and we couldn’t find any peace. We were overwhelmed with stress, anxiety, and worry, not knowing how we would manage to pay off our debt or where to seek help.”

Michael, Kelly’s husband, was shook by the news.

He added:

“We were terrified of losing our home and had no clue how we would provide for our family. It was a nightmare. I felt a deep sense of shame; how did we end up in this situation? The weight of it all pushed me into depression, and I even contemplated suicide, unable to comprehend how everything went so wrong.”

In 2006 the Ashursts were approached by a firm called A&M Energy Solutions Limited offering to install cavity wall insulation. The couple agreed to go ahead thinking this would be a good way to reduce energy bills and help the environment. However, by 2011 the couple started to notice problems with damp.

In 2017 they were approached by a claims management company who suggested a claim might be brought against A&M to get the damp problems addressed which they agreed to.

Following a visit from a surveyor the couple were referred to a law firm before eventually instructing Pure Legal Limited who they then instructed to pursue a claim on a ‘no win no fee’ basis.

Pure assured the Ashursts that they were specialists in cavity wall cases and crucially that they would not have to pay any legal costs if the case failed. The firm then arranged a litigation funding loan, with a company called Novitas, for £15,000 to meet legal expenses and an ATE insurance policy with Amtrust, to cover them for up to £25,000 of legal costs inclusive of the Novitas loan if the case was unsuccessful.

Court proceedings were issued against A&M in December 2018 and the Ashurst’s were assured the claim had good prospects for success.

During all this time the Ashursts continued to suffer the daily problems associated with damp and mould at the property and in June 2020 at their wits end, and with the consent of

Pure Legal, the couple arranged for the insulation to be removed at a further cost of c.£1,530.00.

Pure advised that the claim should be dropped in December 2020 citing concerns over expert evidence as the merits of their claim had recently changed but assured the couple that they would have nothing to pay.

Despite this the Ashursts later discovered on 16 December 2021 that they have been ordered to pay the Defendant installer’s legal costs and were facing costs of over £35,000. They also later found out that that the court had approved a budget for A&M’s legal costs of just over £50,000 well in excess of the £25,000 cover under the AmTrust policy.

AmTrust has refused to cover the legal costs ordered on the basis that Pure had failed to comply with the policy’s terms and conditions. The couple had to use their life savings and borrowed from friends and family to make an initial payment of £16,000 to the Defendant but still face more than £20,000 in legal costs.

On 5 November 2021 Pure was placed into administration. The Ashursts called Pure Legal, the solicitors that dealt with their claim, but were informed that the firm had gone bust a month earlier. The administrators put them in touch with the appointed solicitor manager who explained that Michael and Kelly did owe legal costs. The insurer was refusing to pay out because it alleged Pure been in negligent in the conduct of the claim and so the debt fell to the Ashursts.

Kelly explains:

“I couldn’t believe it. We had specifically asked Pure Legal about any risks, and they reassured us with their ‘no win no fee’ and insurance policy. I asked them, ‘How could this be happening?’ It turned out that the insurer refused to pay out, claiming that Pure Legal had been negligent in handling the claim. As a result, the burden of the debt fell squarely on us.”

In February 2022 the Ashursts instructed Hugh James Solicitors, to act on their in a claim for professional negligence against Pure.

Senior Associate in the Financial Mis-selling team, Erich Kurtz commented:

“I was shocked when I first spoke to Kelly and Michael, and they described what had happened since the demise of Pure Legal. It is truly appalling what they have had to endure, the financial burden and strain on their both their family and mental health, despite being told that they had the benefit of a ‘no win no fee’ and cover against adverse costs. No client should be left in these circumstances. Kelly and Michael feel utterly let down by our legal system, which has been compounded by a denial of liability by Pure Legal’s indemnity insurers (Sompo International-Endurance Worldwide Limited) and continued repudiation from AmTrust Europe Limited the Ashurst’s ATE insurers leaving them with no other option but to pursue their claim via the Courts if necessary.”

Speaking of their experience of Hugh James, Kelly said:

“Since contacting Hugh James in 2022, I feel we have been treated respectfully and compassionately at every stage. Erich has kept us informed and provided the opportunity to talk face to face with any of our concerns or questions. I feel we are in safe hands and am confident Hugh James will do their very best for us.”

Hugh James having initiated a claim against Pure Legal alleging they were negligent in their handling of the claim on multiple grounds including failing to properly assess the merits of the claim from the outset and failing to ensure that the clients were protected from costs.

If you’ve been a victim of professional negligence and would like to speak to one of our specialist financial mis-selling lawyers today, please get in touch to see how we can help.

Author bio

Erich joined Hugh James in 2021 as a Senior Associate in the Financial Mis-Selling team. He specialises in recovering compensation relating to regulated and unregulated investments, insurance, consumer credit agreements, pensions, mortgages and other financial products.

Erich has specialised in complex multi-claimant litigation, with a strong track record of leading financial group litigation cases.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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