SRA warns the ‘no win, no fee’ label hides costly risks, as 76 firms face investigation
The Solicitors Regulation Authority (SRA) has announced sweeping plans to rein in law firms using the phrase ‘no win, no fee’ in their marketing, warning that the term risks misleading consumers.
In a consultation published this week, the regulator confirmed it will issue a new warning notice to firms that rely on the phrase to attract clients. The SRA is also weighing further measures, which could include removing the term from acceptable advertising altogether.
According to the SRA, the label does not give the public a full or accurate picture of the potential consequences of bringing a claim. “We are concerned the ‘no win, no fee’ label doesn’t give consumers an accurate view of what could be involved when pursuing a claim,” the document stated. It warned that clients could face serious financial consequences if cases are not handled properly or fail in court.
The SRA has highlighted instances where claimants in certain sectors have been ordered to pay five-figure defence costs, despite being assured they would not have to shoulder any financial burden. Such cases have fuelled concerns that consumers are being lured into litigation without a realistic understanding of the risks.
Embed from Getty ImagesThe watchdog has described the situation as requiring “robust action”. It singled out areas of high-volume claims work such as housing disrepair, data breaches, delayed flights, diesel emissions, motor finance commission and financial services. These are the sectors where firms most frequently promote ‘no win, no fee’ arrangements to secure large numbers of clients quickly.
The SRA is considering stricter duties on law firms around how they market these claims, onboard new clients, and disclose financial risks. Under the proposals, firms would be required to tell prospective clients, in plain terms, their chances of success, how much compensation they could receive, and how much of that sum would ultimately be taken by the firm or any third-party funder.
Particular concern has been raised over firms adopting what the regulator described as a “one-size-fits-all” model of client engagement. This typically involves using standardised sign-up processes without taking the time to understand a client’s circumstances. The SRA said: “We are alert to the potential risks of a ‘tick box’ approach that doesn’t encourage a firm to consider a client’s individual needs and circumstances.”
The regulator has already stepped up scrutiny. Seventy-six law firms are under active investigation for their handling of high-volume claims, while more than 500 additional firms have been told to submit a mandatory declaration confirming compliance with professional standards.
Anna Bradley, chair of the SRA board, described the risks uncovered in the sector as “unprecedented”. She warned that too many firms had failed to ensure compliance with regulatory obligations. “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,” she said.
The planned crackdown signals a significant shift in how the SRA intends to regulate the claims industry. For years, the phrase ‘no win, no fee’ has been a staple of legal advertising, offering apparent reassurance to people seeking redress. Now, with mounting evidence of clients left exposed to costs and confused by terms, the regulator appears determined to dismantle the phrase’s dominance.
With enforcement already under way and tougher rules expected to follow, firms that rely heavily on the label may soon be forced to rethink how they attract new business. For consumers, the changes could mark the end of an era in claims marketing, bringing greater transparency but also a warning that ‘no win, no fee’ may not mean what they once thought.