Warning notice

'No win, no fee' and other fee arrangements in high-volume consumer claims

Published: 28 January 2026

Status

This document is to help you understand your obligations and how to comply with them. We will have regard to it when exercising our regulatory functions.

Who is this warning notice relevant to?

This warning notice is relevant to all firms and individuals we regulate who work in high-volume consumer claims (HVCC). This includes those using the term 'no win, no fee' in marketing materials or contract documentation, including those operating under Conditional Fee Agreements (CFAs) or Damages-Based Agreements (DBAs).

'No win, no fee' arrangements in high-volume consumer claims

When it works well, the high-volume consumer claims (HVCC) sector can provide an effective route for consumers to enforce their rights.

But we are concerned about the behaviours and practices of some law firms. We are concerned some operating in the sector are not fulfilling their obligations to always act in their clients' best interests and follow all the relevant rules and regulations. In August 2025 we published the findings from a thematic review, analysing firms' practices when conducting high-volume consumer claims work. This review found concerning levels of poor practice and failure to adhere to our Standards and Regulations.

This is not only leading to individual consumers facing harm but also has the potential to undermine public trust in the legal profession. Of particular concern are some of the practices we are seeing where firms are promoting and operating claims on a 'no-win, no-fee' basis.

Law firms typically adopt a range of fee agreements with clients when pursuing claims, this can include CFAs, DBAs, and other similar models. While these structures can differ in their legal and financial implications, many firms (or those that market to the public and pass referrals to law firms) group such arrangements together under the 'no win, no fee' label.

Standards and Regulations

You must comply with the SRA Principles. For high-volume consumer claims representation this particularly includes:

Principle 1 – act in a way that upholds the constitutional principle of the rule of law and the proper administration of justice.
Principle 2 – act in a way that upholds public trust and confidence in the solicitors' profession and in legal services provided by authorised persons.
Principle 5 – act with integrity.
Principle 7 – act in the best interests of each client.

You must also comply with requirements of the Code of Conduct for Solicitors, RELs, RFLs and RSLs and the Code of Conduct for Firms. Not all requirements are stated in full in this notice.

SRA Code of Conduct for Solicitors, RELs, RFLs and RSLs:

1.2 Do not abuse your position by taking unfair advantage of clients or others.
3.1 Only act for clients on instructions from the client, or from someone properly authorised to provide those instructions on their behalf.
3.4 Consider and take account of your client's attributes, needs and circumstances.
5.1(e) Any client referred by an introducer should not have been acquired in a way which would breach the SRA's regulatory arrangements if the person acquiring the client were regulated by the SRA.
8.3 Ensure clients have written information at the outset about their right to make a complaint and how they can do this.
8.6 Give clients information in ways they can understand, and ensure they are in a position to make informed decisions about the services they need, how their matter will be handled and the options available to them.
8.7 Ensure that clients receive the best possible information about how their matter will be priced and, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost of the matter and any costs incurred.

SRA Code of Conduct for Firms:

1.2 Do not abuse your position by taking unfair advantage of clients or others.
4.1 Only act for clients on instructions from the client, or from someone properly authorised to provide those instructions on their behalf.
4.2 Ensure that the service you provide to clients takes account of your client's attributes, needs and circumstances.
7.1 provisions in paragraphs 8.6 and 8.7 regarding information for clients apply equally to firms as to individuals, as though references to "you" were references to you as a firm.

If you represent clients during claims relating to financial services or products you must also ensure you meet the requirements of the SRA Claims Management Fees Rules 2024. This includes not exceeding maximum charges specified by those Rules during certain claims.

If you fail to have proper regard to this warning notice, you are at risk of disciplinary action. We can and will act where we find evidence that solicitors, firms and/or their employees contravene our rules. See our Enforcement Strategy for information about our approach to taking regulatory action.

Our enforcement actions range from issuing warnings and rebukes, imposing financial penalties, and placing conditions on practising certificates, through to urgent interventions to protect clients, and referring serious cases to the Solicitors Disciplinary Tribunal, which can suspend or strike off solicitors.

Our concerns

We are concerned that some fee arrangements with clients in the HVCC space are not meeting the standards expected under the SRA Principles and Code of Conduct for Solicitors, RELs, RFLs and RSLs and the  Code of Conduct for Firms. Specifically, we have observed instances of:

A lack of transparency about the fees clients will pay if their claim is successful: Many clients do not receive clear or complete information about potential charges or deductions, for example, law firm fees, referrer fees, fees to a third party litigation funder, before signing 'no win, no fee' agreements. Our thematic review revealed that only 12 out of 25 firms we visited provided records showing they delivered all the required information on fees to clients. In some instances, firms failed to provide any information on fees at all.
A lack of transparency about the potential costs of a 'no win, no fee' agreement: 'No win, no fee' agreements can still carry various costs for clients if the case fails, such as being liable for after-the-event (ATE) insurance premiums, counsel's fees, expert reports, and administrative charges. We found that many firms failed to provide comprehensive information about these potential costs upfront, which can leave clients exposed to unexpected outcomes and costs if their case fails. Before a client signs an agreement, it is crucial that firms explain the potential risks of 'no win, no fee' arrangements, including the liabilities clients may incur if their case fails.
Client interests being compromised: Some firms are structuring 'no win, no fee' agreements in ways that serve their own commercial interests rather than acting in their clients' best interests. For example, some firms enter funding or referral arrangements that could benefit the firm or third parties more than the client.
Use of third parties: We have observed that some firms are not conducting thorough due diligence and validation to ensure that the claims management companies and lead generators they use are complying with their regulatory obligations. Although lead generators are not regulated, and claims management companies may be subject to different regulatory frameworks, both can generate clients who are referred to law firms. Firms must ensure that any referrals meet SRA standards. This includes taking responsibility for the clarity and accuracy of third-party advertising.
Poor management of 'no win, no fee' safeguards: 'No win, no fee' arrangements are typically supported by measures designed to protect clients from financial harm if their claim fails, such as ATE insurance. However, we have found that these safeguards are sometimes poorly managed, which leaves clients vulnerable to significant expenses. Failing to secure the appropriate ATE insurance risks burdening clients with significant costs if their case does not succeed.

In addition, other areas where we have specific concerns include:

Using 'no win, no fee' in marketing materials

You must be cautious when using the term 'no win, no fee' in marketing or advertising materials. Communication must be clear, accurate, and not misleading. (Paragraph 8.6) Before entering into any agreement with a client, you should provide a complete and easily understandable explanation of any circumstances in which the client may be liable for disbursements, insurance premiums, cancellation fees, or any other costs, even if their claim is unsuccessful.

You must check that clients have understood the information provided and provide opportunities for clarification. The client's right to complain, and the process for making a complaint, must be explained clearly in writing at the outset and reiterated as necessary. (Paragraph 8.3)

This information can be communicated through various channels, such as verbal explanations, written documents, and online resources, and does not have to be delivered all at once. However, all information about the terms of your agreement with the client must be provided before they sign it. It must not be hidden in small print or included only in terms and conditions and should be presented in a way that prospective clients are likely to understand. You must also ensure that clients are given clear, accessible information about the different options available to them when making a claim so they can make an informed decision. This includes where free advice may be available, or where there may be a self-help route or access to an ombudsman scheme (Claims Management Fees rules 1.3 (a)) .

You must avoid using language or testimonials that could create unrealistic expectations about the likelihood of success, the speed and simplicity of the process, or the financial risks or benefits involved. Marketing materials must not exaggerate the benefits of 'no win, no fee' arrangements or downplay the potential costs and risks.

It is also important to ensure that any comparisons you provide regarding alternative ways to fund a claim, other than 'no win, no fee' options, are accurate and not misleading (Paragraph 8.8). The use of high-pressure sales tactics, such as cold calling, unsolicited approaches, or aggressive follow-up communications, is prohibited.

You are required to have robust procedures in place to monitor and review all marketing activities, including those carried out by third-party introducers or agents acting on their behalf. Regular staff training and clear internal guidance can help make sure that everyone involved in marketing understands their obligations and the standards expected by the SRA.

Providing clients with accurate information on costs and fees

When communicating information on costs, you must comply with the Code of Conduct for Solicitors, RELs, RFLs and RSLs, including:

providing clients with information in a way they can understand, so that they are in a position to make informed decisions about the services they need, how their matter will be handled and the options available to them (Paragraph 8.6)
ensuring that clients receive the best possible information about how their matter will be priced and, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost of the matter and any costs incurred (Paragraph 8.7)
informing clients of any financial or other interest received by a referrer or you as a result of any referral or introduction arrangement (Paragraph 5.1(a))
informing clients of any fee sharing arrangement relevant to their matter (Paragraph 5.1(b)).

Costs and fee arrangements, such as 'no win, no fee' agreements, can be complex and confusing for many consumers. It is therefore essential that you take proactive steps to ensure clients fully understand how these arrangements operate, so they are able to make informed decisions at every stage of their claim. (Paragraph 8.6) This includes detailing the basis for all charges and deductions including success fees for you and any third party, hourly rates, whether VAT is included in these rates, and any additional charges such as insurance premiums, with reference to the specific risks and circumstances of each case. (Paragraph 8.7 Code of Conduct for Firms; Claims Management Fees rules 1.2).

Clients must be clearly informed of any termination fees or charges that may apply if they choose to cancel a retainer agreement before the conclusion of their case. Termination fees must be reasonable and relate to work actually done. These fees must be transparently explained at the outset, including the circumstances under which they would be incurred and how they are calculated, to ensure clients can make fully informed decisions.

Pricing structures, particularly success fees, must be based on the risks involved and must be justifiable, fair, and reasonable. If they are not, you may breach your regulatory duty to not abuse your position by taking unfair advantage of clients – see paragraph 1.2 of the Code of Conduct for Solicitors, RELs, RFLs and RSLs. Unfair or unreasonable charges may also be considered by the Legal Ombudsman as a potential failure in your service.

Keeping templates and other information up-to-date in 'no win, no fee' arrangements

Firms that use template documents must verify that these documents contain sufficient, accurate, and clear information. An error in a single template document could impact tens of thousands of clients who receive the same document. Additionally, you must confirm that clients understand the information provided, recognising that this cannot be a 'one size fits all' approach and may require customisation to suit individual circumstances. You must also keep records of any oral advice or discussions so you can demonstrate clients have given their informed consent.

You are required to have robust systems in place to ensure that all cost information is accurate and up to date. Regular reviews of client care processes, supported by appropriate training and supervision, are essential to ensure ongoing compliance and to protect clients from harm. Failure to provide clear and accurate information about costs not only breaches the Standards and Regulations but can also result in significant financial and emotional harm to clients, as well as reputational damage to the profession and potential regulatory action.

Further information

More information is available in:

For guidance on any of the above conduct matters, please contact the Professional Ethics helpline.

See our webpage on Mazur and conducting litigation for guidance and a range of resources on your obligations under the Legal Services Act 2007 in relation to the conduct of litigation.

If you require further assistance, please contact the Professional Ethics helpline.

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