The Solicitor Regulation Authority (SRA) has recently announced that it is to follow the approach of the Financial Conduct Authority (FCA) in capping the fees which law firms can charge for financial services claims management work. This means that firms that claims management companies (CMCs)recommend plevin cases to law firms will be affected by any changes made. This will only effect claims made against financial services products, the SRA are not currently seeking to cap solicitors fees in relation to personal injury.
The Financial Guidance and Claims Act 2018 imposed a duty on the FCA and SRA to create and enforce rules restricting charges for claims management activities in relation to financial services and financial product claims.
The FCA announced in January that it would be capping the fees charged by CMCs for all financial services and product claims where there is a statutory ombudsman or compensation scheme available for those services. These fee cap proposals are based on the amount of compensation awarded on a sliding scale. The policy statement expected from the FCA on this proposed fee cap is due in October.
It is anticipated that the SRA will adopt a similar approach for law firms, a consultation paper is expected later in the summer.
As part of the SRA’s information-gathering process, they want to hear from firms that would be affected by any new rules so that it can take as wide a range of views as possible on board. If you work in this area, you can provide details of your firm and the work you do by emailing the SRA at this address: firstname.lastname@example.org.