SRA: “Major shortcomings” in high-volume consumer claim work

The Solicitors Regulation Authority (SRA) has identified significant shortcomings in how law firms handle high-volume consumer claims (HVCC), particularly concerning client onboarding and transparency. Recent research, including a large-scale consumer survey, revealed widespread issues such as inadequate disclosure of costs and liabilities, unclear consent mechanisms, and misleading marketing practices, especially regarding "no win, no fee" arrangements. These deficiencies are leading to consumer harm and regulatory breaches, prompting the SRA to develop new guidance materials and issue multiple warning notices. The findings underscore a critical need for firms engaged in HVCC work to review and enhance their client care processes to ensure compliance with SRA Principles and Codes of Conduct, particularly those relating to client best interests, transparency, and informed consent.

The Solicitors Regulation Authority (SRA) has sounded a clear alarm regarding "major shortcomings" in the provision of high-volume consumer claims (HVCC) services by law firms. This follows extensive research, including a comprehensive survey of over 15,000 consumers, which uncovered systemic issues in client onboarding, communication, and fee transparency. The SRA's findings highlight a significant gap between regulatory expectations and actual practice, posing substantial risks to consumer protection and the reputation of the legal profession.

These concerns are not merely administrative; they point to fundamental failures in upholding core SRA Principles, particularly the duty to act in clients' best interests and to provide a proper standard of service. The SRA's proactive stance, including the development of new guidance and the issuance of several warning notices, signals an intensified regulatory focus on this sector. This article will delve into the specific shortcomings identified, examine the relevant regulatory framework, and discuss the implications for practitioners engaged in high-volume consumer claims work, urging a critical re-evaluation of current practices.

The SRA, as the regulator of solicitors and law firms in England and Wales, is mandated to protect the public and uphold public trust in legal services. Its regulatory framework, primarily comprising the SRA Principles and the SRA Codes of Conduct for Solicitors and Firms, sets out the fundamental ethical and professional standards expected of all regulated entities. Key principles include acting with integrity, upholding public trust, and acting in the best interests of each client.

High-volume consumer claims encompass a range of legal matters, such as housing disrepair, data breaches, flight delays, diesel emissions, and financial services mis-selling. While this model can provide an effective route for consumers to enforce their rights, the SRA has observed a concerning pattern of behaviour among some firms. Prior to the recent research, the SRA had already identified issues in this area, leading to the publication of specific warning notices and guidance. For instance, the SRA issued a warning notice in May 2024 concerning high-volume financial services claims and another in January 2026 addressing "no win, no fee" arrangements and other fee structures in HVCC. These interventions underscore a sustained regulatory effort to address risks associated with the scale and commercial practices prevalent in this sector.

The SRA's recent research, conducted by YouGov, revealed that while 72% of clients were satisfied with the outcome of their claim, only 51% were satisfied with the service received from law firms. A staggering 54% of consumers reported problems during the process, with common issues including delays, poor communication, and a lack of clarity. Specific and significant shortcomings in client onboarding were identified, such as clients not consenting to a law firm acting for them, even at pre-contract stages.

Crucially, the research highlighted a severe lack of transparency regarding costs and liabilities. Only 21% of consumers were informed about the likely cost of their claim at the outset, and a mere 14% were advised of potential liabilities they might face. Furthermore, only 13% were told about any cooling-off period. Many consumers were unclear about whether they had formally signed up to a claim, often after using online forms to check eligibility. These findings indicate potential breaches of SRA Principle 7, which mandates acting in the best interests of each client, and specific provisions within the SRA Code of Conduct, such as paragraph 8.6, requiring firms to give clients information they can understand to make informed decisions, and paragraph 8.7, concerning costs and pricing obligations.

Further concerns revolve around the misleading use of "no win, no fee" marketing, where clients are not fully informed about potential deductions or the role of After the Event (ATE) insurance, which can still leave them liable for costs if a claim fails. The collapse of SSB Law Ltd, where clients on "no win, no fee" arrangements were unexpectedly pursued for adverse legal costs, serves as a stark example of these risks. The SRA has also noted inadequate client onboarding processes concerning ID checks, sanctions, and conflicts of interest, as well as failures in due diligence for litigation funding and referral arrangements. These issues are exacerbated for vulnerable clients, including those from lower socio-economic backgrounds or with additional support needs, who disproportionately experience confusion and poorer outcomes. The SRA currently has 94 open investigations relating to 68 firms in the HVCC sector, underscoring the seriousness of these widespread regulatory breaches.

The SRA's comprehensive review unequivocally demonstrates that significant improvements are needed in how law firms handle high-volume consumer claims. The identified shortcomings, particularly in client onboarding, transparency, and communication, not only undermine consumer trust but also expose firms to substantial regulatory action. Practitioners in this sector must urgently review their processes to ensure full compliance with the SRA Principles and Codes of Conduct, especially regarding informed consent, clear cost disclosure, and the proper management of "no win, no fee" arrangements and third-party referrals.

Firms should proactively implement robust client onboarding procedures that go beyond merely sending client care letters, focusing instead on ensuring genuine client understanding, as highlighted by SRA Code of Conduct paragraph 8.6. This includes clear, jargon-free explanations of costs, potential liabilities, and the implications of funding arrangements. Attention to client vulnerability, as per paragraph 3.4 of the Code, is also paramount. With the SRA developing new guidance materials and actively pursuing investigations, firms should anticipate increased scrutiny. Adopting a client-centric approach, prioritising transparency and ethical conduct, is not just a regulatory obligation but a strategic imperative for maintaining public confidence and avoiding disciplinary action.