The Solicitors Regulation Authority (SRA) has issued a warning to law firms, particularly those involved in high-volume claims work, regarding prohibited marketing practices such as cold calling, door knocking, and directly targeted online messaging. This action stems from concerns about firms recruiting new clients through unsolicited approaches, which violate SRA regulations.
The SRA emphasised that some firms are not ensuring their third-party partners, including claims management companies and lead generators, adhere to the same standards. Firms must verify that these partners do not employ tactics that the firms themselves are prohibited from using. Additionally, the SRA highlighted the importance of transparent marketing and recruitment materials, cautioning against content that could mislead consumers.
A specific area of concern is the promotion of ‘No win, No fee’ agreements. The SRA noted that firms must clearly communicate that such agreements are not entirely risk-free and that consumers should be aware of potential scenarios where they might incur costs. Instances have arisen where consumers faced unexpected expenses because firms did not adhere to the terms of after-the-event insurance policies, resulting in uncovered costs.
To assist consumers, the SRA has published a ‘No win, No fee’ guide (https://www.sra.org.uk/consumers/choosing/no-win-no-fee/) outlining key considerations, risks, and pertinent questions to ask before entering into such agreements. Paul Philip, SRA Chief Executive, stated,
“Firms being able to promote their services is important, and can help people get access to justice. Likewise, ‘no win, no fee’ arrangements can help people to access the expert help they need. But firms must always promote their services in line with high professional standards.”
The Warning notice advises firms to:
- Refrain from making unsolicited approaches in violation of SRA rules.
- Ensure third-party introducers comply with regulatory requirements when marketing to potential clients.
- Regularly review and document any promotional materials used by associated third parties.
- Clearly disclose potential risks and costs associated with ‘no win, no fee’ marketing.
The SRA has made it clear that non-compliance with these guidelines will result in regulatory action.
The Warning notice, entitled “Marketing your services to members of the public” (https://www.sra.org.uk/solicitors/guidance/marketing-public/) was published on 19 December 2024.