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The review comes hot on the heels of the government's review of the opt-out collective actions regime and the Civil Justice Council's recommendations for litigation funding.
On Friday last week (19 September 2025) the Solicitors Regulation Authority (SRA) published a discussion paper: How can the high-volume consumer claims market work better for consumers?
The SRA uses the term high-volume claims to refer to situations where large numbers of consumers file claims against the same organisation or in relation to the same issue. It notes that such claims activity is currently concentrated in areas including housing disrepair, data breaches, flight delays, diesel car emissions, motor finance commission, and other financial services.
As the title of the discussion paper suggests, the review is prompted by concerns as to how the high-volume claims market operates and the potential for consumers to be harmed. The SRA refers to two distinguishing features of high-volume consumer claims that it says are central to its concerns:
- The risks relating to these claims have the potential to affect a significant number of consumers because of the large numbers of claims involved.
- Due to the similarity of the claims, there is a risk of firms defaulting to a standardised approach which may not meet the specific needs of an individual client.
The SRA's discussion paper forms part of a broader range of activity it is taking in this area, including investigations into the conduct of a number of individual law firms, and a thematic review of firms operating in this sector which was published in August. It also notes that some of the issues cut across multiple sectors and regulatory regimes, including claims management, finance and insurance, and that it is working closely with a range of organisations and government departments who share its concerns (referring in particular to the warning to law firms and claims management companies around poor practice in motor finance commission claims, which was published jointly by the SRA and FCA).
The discussion paper states the SRA's view that maintaining the status quo is "not an option", given the scale and range of issues it is seeing in this area. It says it is exploring a wide range of options, including changes to its rules and regulations which would be subject to formal consultation in 2026.
Stakeholders are invited to make submissions by 14 November on questions relating to five "key challenges" where the SRA believes the current regulatory regime could be strengthened, as outlined below. If any clients would like to discuss the issues raised, please do get in touch.
1. Improving transparency and clarity for consumers about their claim
Concerns outlined in the paper include that the "no win, no fee" label does not give consumers an accurate view of the risks and potential costs that might be incurred when pursuing a claim, that client care information requirements are not always met, and that consumers' individual needs and circumstances are not always taken into account.
The SRA expresses the "strong view" that more must be done to protect consumers in this area and that tighter safeguards must be established regarding marketing, advertising and onboarding. This could include use of standardised wording, accessible checklists or templates during the onboarding process.
The discussion paper asks various questions such as how regulation can be enhanced so that consumers are clear what they are signing up to, whether the term "no win, no fee" should be restricted or banned, and whether regulatory changes are needed to ensure enough is being done to accommodate the individual needs of consumers.
2. Managing risks around third-party litigation funding
The paper expresses concerns about how third-party litigation funding is being used in high volume claims, and that the incentives of funders may not always be aligned with the best interests of firms or consumers.
It welcomes the recommendations made in June by the Civil Justice Council (CJC), in particular that litigation funding should be subject to statutory regulation by the Lord Chancellor and portfolio funding subject to separate regulation by the FCA (see our previous blog post). However, it notes that any statutory solution will take some time to devise and implement. The SRA says it is therefore exploring other short- and medium-term actions to better protect consumers and will issue further advice to firms on their use of litigation funding this year.
The discussion paper asks various questions around litigation funding, such as what information claimants need about funding agreements and what steps the SRA could take to make sure firms manage the risks around funding.
3. Making sure after-the-event (ATE) insurance meets consumers' needs
The paper refers to the CJC's recommendation that ATE insurance policies should include robust anti-avoidance clauses, to reduce the risk of a dispute about cover in the event of an unsuccessful claim and the risk that a consumer would be left to cover the costs.
It notes that the SRA is planning to update the advice provided to law firms in relation to ATE insurance by the end of the year, and that it will also seek wider solutions to deliver consumer protection which could include, for example, specifying requirements for such insurance.
The paper asks what more could be done to improve the protection that ATE insurance offers consumers when pursuing claims.
4. Making sure SRA regulation keeps pace with a changing market
The paper notes that the SRA is seriously concerned that consumers are not well served by the market, and is considering whether firms active in this area require more regulatory oversight. The paper specifically notes the SRA's concerns around the financial arrangements of firms in this sector and the processes for the transfer of client files if a firm closes.
It asks whether the SRA should enhance its regulation of firms working in high-volume consumer claims, eg through an enhanced authorisation process, and what factors should be taken into account to make sure consumers' interests are protected if their files are transferred to another firm.
5. Delivering wider improvements across the system for consumers in high-volume claims processes
The paper notes that there is a fragmented landscape in this area, with various routes through which consumers can pursue claims and various legal service providers from whom they can seek assistance apart from law firms.
It says the issues arise predominantly in large volumes of individual consumer claims, while other claims routes such as group litigation orders, group actions, and claims to the Competition Appeals Tribunal are prompting fewer concerns – though the paper notes that the government is currently reviewing whether the opt-out collective actions regime continues to meet its core objectives (see the government's call for evidence).
The SRA seeks views on whether there are approaches that are working well in similar areas, and whether there is more than could be done in this area.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
