High-volume consumer claims - protecting your law firm from regulatory risk

The Solicitors Regulation Authority (SRA) has made clear that the way the high-volume consumer claims market is operating is causing growing concern, with the potential for real consumer harm and wider damage to public trust in the legal profession.

While these types of claims can provide consumers with a valuable route to justice, the SRA is increasingly focused on whether law firms are meeting their obligations in handling this work.

What constitutes ‘high-volume’ litigation?

High-volume consumer claims are not defined by their monetary worth but the way in which they are pursued: they involve large numbers of near-identical claims, usually in areas such as housing disrepair, flight delays, diesel emissions, data breaches or motor finance commission. Firms operating in this space tend to acquire and onboard clients in bulk, often through introducers or mass marketing, and then manage claims through standardised processes on a no-win, no-fee basis. The focus is therefore on scale rather than individual case value, with risks arising around transparency, supervision, funding arrangements and whether clients are properly protected.

What’s brought this into the Regulator’s line of sight?

At the centre of the regulator’s concerns are the ways in which clients are acquired and onboarded, how referral arrangements are managed, and whether “no-win, no-fee” agreements are genuinely protecting clients from financial liability. The collapse of SSB Law Ltd, where clients found themselves exposed to adverse costs despite entering into claims on a no-win, no-fee basis, has sharpened the regulator’s attention. Alongside this, a lack of transparency over fees, unclear case management processes, and questionable funding models have all been identified as areas where firms are falling short.

Once again, the SRA is not holding back. There are currently 95 open investigations into 76 firms operating in this space, with mandatory declarations now required from those active in high-volume claims work. The regulator has published a thematic review that identifies both good and poor practice, and it has warned that robust enforcement action will follow where standards are not being met.

Examples of the SRA’s compliance concerns included:

• Not giving full consideration to clients’ best interests when entering into litigation funding agreements or referral arrangements, and failing to carry out proper due diligence before committing to new arrangements.
• Falling short in providing clients with clear and comprehensive information about costs, funding methods, and the different options available to them.
• Weak compliance with regulatory requirements when arranging After the Event (ATE) insurance, leaving clients at risk of inadequate protection.
• Insufficient systems and controls to ensure that any referrer or introducer is operating in line with the firm’s regulatory obligations.
• Inadequate on-boarding processes, including failures to properly check client identity, sanctions, and potential conflicts of interest.
• Providing incomplete or unclear advice to clients on the merits of their claims and the realistic prospects of success.

All of which has resulted in the regulator opening formal investigations into nine of the 25 firms visited.

With the Supreme Court ruling in August on motor finance commission claims and the FCA’s forthcoming consultation on a redress scheme, firms entering this space are under closer scrutiny than ever before.

What does this mean for firms operating in this area?

For firms, the message is clear: proactive compliance is essential. That means reviewing client acquisition processes to ensure that referrals and marketing practices comply fully with the SRA’s rules on prohibited practices. It means checking that all “no-win, no-fee” arrangements are carefully drafted, transparent, and supported by appropriate, after-the-event insurance where relevant, so that clients are not left exposed should claims fail. It also requires ensuring that fees and costs are explained to clients in plain English at the outset, with clear records kept of what has been communicated.

Firms should also be looking closely at supervision. The SRA has repeatedly emphasised the importance of effective oversight in high-volume claims environments, where junior staff may be handling large caseloads. Demonstrating a clear supervisory framework, with documented file reviews and escalation processes, will provide vital protection if questions are asked later. Financial arrangements should be carefully monitored too, so that the way claims are funded does not compromise the duty to act in the best interests of the client.

Our thoughts?

Taking visible, demonstrable action now will be the best protection against regulatory scrutiny.  I recommend firms document the steps they are taking in response to the SRA’s thematic review, complete the mandatory declaration with care, and keep records of how they are meeting their regulatory obligations in practice. This is not just about avoiding investigation: it is about showing the regulator that your firm takes its responsibilities seriously, is alive to the risks in the sector, and is acting to protect clients at every stage.