The SRA has published a Warning Notice on “‘no win, no fee’ and other fee arrangements in high-volume consumer claims“. It is aimed squarely at firms (and individuals) doing high-volume consumer claims work, where CFAs and DBAs are often packaged up and sold to consumers under the “no win, no fee” label.
The regulator says it is seeing widespread poor practice, consumer harm and business models where the client’s interests can end up being secondary to the firm’s commercial objectives (aka an own interest conflict).
The Warning Notice
What is the warning notice actually about? Three themes run through it. First, transparency. The SRA is concerned that some clients are not being given clear, prominent and intelligible information about (a) what they will pay if they win (including any success fee, deductions from damages, and what happens with disbursements) and (b) what they might still be exposed to if they lose or discontinue (for example adverse costs risk, and how ATE insurance works or does not work in that particular model).
Secondly, client best interests. The SRA says some firms are structuring arrangements, referral deals and operational models in ways that benefit the firm or third parties more than the client, particularly where the firm’s “unit economics” depend on rapid onboarding and high conversion volumes.
Thirdly, control of marketing and third parties. The warning notice makes clear that firms remain responsible for the accuracy and tone of messaging used by claims management companies, lead generators and other introducers, and that “outsourcing” marketing does not outsource regulatory responsibility.
All of that is sensible and should not be controversial.
What’s so wrong with “no win, no fee”?
Where things get more interesting is the SRA’s apparent discomfort with the phrase “no win, no fee” itself. The regulator’s concern is easy to understand: there is a risk that the phrase can imply “there is nothing to lose”.
But the phrase is also a very useful piece of shorthand that consumers recognise. It is memorable, widely understood at a basic level, and it describes the core psychological barrier that CFAs were designed to address: most people cannot afford to fund litigation upfront, and would be more comfortable pursuing their claim if they were to share the economic risk, and upside, with their solicitor.
These are incredibly important funding arrangements in litigation where there is an inequality of arms between claimant and defendant. It is plainly an access to justice issue, so regulators need to take care when meddling.
The awkward truth is that consumer litigation funding is inherently complex. I am no costs expert, but even I know that even within a “standard” CFA, outcomes have permutations: success fees, deductions from damages, disbursements, staged termination provisions, mixed success, partial recovery, set-off, recoverability rules, and the ATE position. A DBA is different again, and can be more complicated still. In that context, “no win, no fee” is not a perfect technical description, but it is often an effective signpost: it gets people to engage, at which point the firm’s job is to give a clear, accurate, client-friendly explanation of the benefits, costs and risks before the client commits.
Unintended consequences
If firms become nervous and start avoiding the phrase “no win, no fee” altogether, there is a real risk of market distortion. It wouldn’t be a huge logical jump to assume that the firms most likely to shy away from familiar consumer language because of this Warning Notice, are likely to be the ones most sensitive to regulatory risk: the ones with tighter governance, stronger supervision, and a more cautious approach to claims volumes and introducer relationships. If those firms sanitise their marketing while others continue to push aggressive “no win, no fee” messaging (or rebrand the same concept with different, equally punchy phrasing), consumers may drift towards the louder marketing rather than the better-run firms. That is not obviously in the public interest.
And it’s not just high volume consumer claims
There is also a practical point here about consistency. The Warning Notice is framed around high-volume consumer claims, but it would be nonsensical to treat its underlying principles as only applicable to that type of work. The duties it relies on are the everyday duties: act in the client’s best interests, provide proper information so clients can make informed decisions, and ensure publicity is accurate and not misleading.
Those expectations do not switch off just because a firm is doing single-claim litigation, commercial litigation, clinical negligence, or probate disputes. If you use contingency fees anywhere in your practice, you should assume the SRA will expect the same fundamentals i.e. transparent explanations, evidence that clients understood what they were signing up to, and proper control over the messaging used to attract the work.
This is where the debate should land, in my view. The issue is not whether “no win, no fee” is a permissible phrase. The issue is whether the funding model and the marketing are lawful, accurate and fair, and whether the client is genuinely in a position to make an informed decision. If the nuts and bolts are explained clearly (in plain language), the arrangement is in the client’s best interests, and the firm can evidence that it has taken ownership of its marketing and introducer messaging, there should be very little scope for the SRA to get excited. That applies before instruction (marketing and onboarding) and throughout the retainer (ongoing costs information, changes in risk profile, and any termination discussion).
Marketing and messaging
The Warning Notice also reinforces the fact that you cannot “contract out” of your regulatory obligations by using marketing partners. This links directly to the marketing rules in the SRA Codes of Conduct. The Code for Solicitors requires you to ensure publicity is accurate and not misleading (including around charges), and it prohibits unsolicited approaches to members of the public. The Code for Firms applies the same standard at firm level. In practice, that means you need governance over what your introducers say, how they say it, and where it appears. If your lead generator’s landing page, call scripts or social adverts are over-promising, downplaying risk, or obscuring deductions and termination charges, the firm is potentially the one in the regulatory firing line.
We are already working with litigation firms on the practical response. In our view firms should not panic and ban the phrase, but tighten the substance around it. That includes reviewing marketing journeys end-to-end, fixing introducer scripts and landing pages, producing client-friendly explainers (written and visual), and building short videos and diagrams that make the permutations of outcomes intelligible without drowning the client in legal costs rules. Done properly, you preserve the benefits of accessible shorthand while meeting the standard the SRA is signalling: clear, accurate, balanced information that allows clients to make real choices.
