SRA addresses issues in law firms' high-volume claims

The Solicitors Regulation Authority (SRA) has raised significant concerns regarding the practices of law firms operating in the high-volume claims market. A recent review indicates that some firms may not be fulfilling their obligations to protect and promote the best interests of their clients when pursuing claims, potentially jeopardising public welfare. This report underscores ongoing concerns from the SRA’s broader investigations, which have identified systemic issues within the sector.

To address these issues, the SRA has taken the unusual step of mandating firms engaged in high-volume claims to complete a compliance declaration. This declaration requires firms to confirm their understanding of and adherence to regulatory obligations. Firms identifying areas for improvement in their practices are urged to take prompt corrective measures.

The SRA has previously issued numerous guidance notes and warning notices to remind firms of their regulatory duties when handling claims. However, the findings from this recent review suggest a troubling trend of non-compliance among certain firms.

Currently, the regulator has 95 active investigations affecting 76 law firms suspected of misconduct in high-volume claims. Anna Bradley, Chair of the SRA, remarked, ‘High-volume consumer claims can provide access to justice for many when done well. However, there are widespread issues in the market, and this is harming consumers. We are writing to firms requiring them to declare they understand our rules and are complying with them. Where we see poor practice, we will take robust action.’

As part of the review, the SRA analysed 129 law firms engaged in high-volume claims, collectively handling over 2.4 million ongoing cases. In-depth evaluations were conducted at 25 firms, alongside detailed reviews of 50 case files. Alarmingly, only 11 out of the 25 firms visited could demonstrate they had provided the required client care information to all claimants, while only 12 had documentation showing they disclosed necessary information regarding costs and claim funding.

Key issues identified include firms neglecting clients' best interests when entering into funding arrangements, failing to offer transparent information about costs and liabilities, and exhibiting poor management of no-win no-fee arrangements. The findings from this review will contribute to the SRA's ongoing efforts to address concerns surrounding high-volume consumer claims work.