The Solicitors Regulation Authority (SRA) has set out a series of proposals clamping down on the high-volume consumer claims market, following a wave of concern over consumer protection. 

In a recent discussion paper, the regulator outlined a number of possible interventions, including banning the term ‘no win, no fee’ and increasing scrutiny of firms operating in the space.  

The paper follows a thematic review in August that uncovered widespread failings among law firms managing consumer claims at scale. The regulator is currently investigating 76 firms, with five already shut down. Over 500 others have been asked to provide detailed information on their caseloads and to confirm their compliance with the existing rules. 

SRA chair, Anna Bradley, described the scale of the issue as “unprecedented”, adding: 

“Too many firms don’t have their house in order, so we need to use all the levers at our disposal to protect consumers and identify poor practice.” 

Sector-Wide Review Underway 

The SRA said maintaining the status quo was not an option. Alongside its enforcement work, it is now actively seeking views on how to make the claims sector safer, more transparent, and accountable. The discussion paper calls for input from stakeholders across the legal and claims ecosystem. 

“Our work has highlighted that the issues we are seeing are not confined to law firms,” the SRA said.  

“They also involve unregulated businesses, claims management companies, litigation funders, insurers and expert witnesses. Many of these risks fall outside our direct regulatory remit.” 

Ban on Misleading ‘No Win, No Fee’ Claims Under Consideration 

A key area of concern is how claims are marketed and explained to consumers. The SRA said the popular “no win, no fee” label was often misleading and failed to communicate the risks or costs consumers could face if claims are unsuccessful or poorly managed. 

The regulator will soon issue a new warning notice on use of the phrase and is asking whether its use should be restricted or banned altogether. 

It also raised concerns that technology-driven onboarding processes may be failing to meet clients' individual needs or secure meaningful consent, citing cases where consumers were unknowingly represented by multiple firms for the same claim. 

Litigation Funding and Financial Risk 

The second challenge outlined in the paper centres on third-party litigation funding, with the SRA backing calls by the Civil Justice Council for formal regulation of funders. 

The regulator’s own investigations have found some firms are operating with dangerously high levels of borrowing relative to their turnover, raising concerns about financial instability and potential undue influence from investors. 

Although formal regulation would need to be government-led, the SRA plans to issue new guidance to solicitors later this year on responsible use of litigation funding. 

Insurance Products and Oversight Structures 

Another area of scrutiny is the use of after-the-event (ATE) insurance. The SRA is reviewing whether existing guidance is sufficient to ensure that consumers are protected and will consider whether more prescriptive requirements, such as anti-avoidance clauses, are necessary. 

The paper also questions whether firms operating in the high-volume claims space should face enhanced authorisation requirements. This could include stricter governance rules, more detailed supervision of key personnel, and stronger checks before firms are allowed to operate in this area. 

A Call for Collective Action 

The fifth and final challenge acknowledges that regulation alone cannot solve the problem. The SRA is calling for wider system reform, working alongside other regulators, government and the legal sector to deliver more consistent safeguards. 

It is also inviting ideas from the profession – such as whether frameworks used for group litigation could provide a model for improved practices in other high-volume claim types.