Sorry to hear about another bad experience after buying a 'van. It seems to be happening rather more frequently than it did, or is it just my imagination?
For my sins, I used to have dealings with Insurers/ Solicitors/ Claimants and the courts system. Once the legal route is started it tends to take control and forget what is really wanted - a repair or settlement of some kind. A dealer be well aware of where the problem may end up and may come to an agreement with you that you would take forever if you go straight down the legal route. Courts are also respectful of the fact if you have attempted to settle yourself first, I found. MIL's guidance paper is very useful and spot on, as such use the points in your discussions with the seller.
Did you by chance pay with a credit card? Even the deposit? If so the credit card company are the next people you should contact. They are jointly liable under the Consumer Credit Act. see which.co.uk/consumer-rights/regulation/section-75-of-the-consumer-credit-act. Especially now you can't be charged more for using a credit card, all purchases should be made using one. This is a really powerful tool for consumers.
Don't think of your Bongo as an £8k paperweight. What you have is a bongo with an engine problem - like many on this forum
Unless you return it to the dealer, annoying though it is, and extra hassle for you, get the engine fixed and you'll have a wonderful time. Hopefully you'll not be out of pocket for the repairs then you'll have a great 'van for years to come.
ps. If you do manage to return it to the dealer, so they can't just try to sell it on to another unsuspecting person, post the registration number, so other buyers might spot it and not have the same problem.