The Solicitors Regulation Authority (SRA) reported evidence of poor practice at several firms handling claims such as mis-selling of financial products, flight delays and data breaches, in its ‘High-volume consumer claims thematic review’.
The SRA has now taken the unusual step of requiring firms to complete a mandatory declaration confirming they understand and follow its rules.
Its review, published in August, found evidence of firms not being transparent on costs, potential liabilities, merits, funding and referral fees.
Of 50 files reviewed, for example, 11 lacked client identity checks and 39 lacked sanctions checks. At one firm, the files contained no evidence that clients had given written consent to the firm’s retainer.
Clients were given no opportunity to read information about the after-the-event (ATE) cover they were taking out, in ten out of 23 ATE files reviewed.
For the review, it surveyed 129 high-volume claims firms—of 25 firms visited for in-depth inspection, only 11 could show they shared the required care information with all claimants and only 12 had records proving they did so regarding costs and funding. Consequently, the SRA is now investigating nine of the 25 visited.
As of the end of July, the SRA had 95 investigations for potential misconduct in high-volume claims work open on 76 law firms.
SRA chair Anna Bradley said: ‘There are widespread issues in the market, and this is harming consumers.
‘Where we see poor practice, we will take robust action.’
Welcoming the review, Law Society president Richard Atkinson said regulation must be ‘effective, balanced and targeted at safeguarding vulnerable consumers’.
Concerns about high-volume claims firms have escalated in the past 18 months after insurers pursued SSB Group clients for adverse costs for discontinued cavity wall insulation claims.
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