Access to justice or consumer harm? The SRA targets risks in bulk claims

In August 2025, the Solicitors Regulation Authority (SRA) concluded its thematic review of the high-volume consumer claims sector against a backdrop of mounting concerns over consumer risk. The review exposed widespread weaknesses in firms’ compliance with regulations intended to safeguard clients, issues already highlighted by several high-profile failures in the market. In response, the SRA is now requiring bulk-claims firms to formally declare that they understand their regulatory obligations. While the declaration does not alter the scope of those obligations and could arguably be dismissed as a procedural formality, it signals the regulator’s determination to take firmer action against poor practices in what it views as a high-risk sector.

Recent high-volume consumer claims failings

One of the starkest examples of the risks in this sector was the collapse of SSB Law, a Sheffield-based bulk claims firm that went into administration after pursuing thousands of cavity wall claims and defaulting on the litigation funding obligations that underpinned its model. Clients who had been assured their claims were being handled on a no-win, no-fee basis were instead left unexpectedly liable for adverse legal costs associated with their discontinued claims, where the ATE insurance cover SSB Law had put in place was insufficient. The potential exposure to what later amounted to up to £40,000 in adverse legal fees per client had not been adequately explained to SSB's clients.

The SRA highlighted the SBB Law case as emblematic of the dangers posed when firms fail to manage litigation funding responsibly or provide clear information to clients. These concerns were reflected in the SRA’s 2024/2025 Business Plan, which identified bulk consumer claims as a priority area for supervision, noting the sector’s exposure to systemic weaknesses such as poor client communication, inadequate due diligence on funders, and aggressive use of high-cost borrowing. These events drove the impetus behind the thematic review, with the SRA commenting:

"As we confirmed in our 2024/25 Business Plan, we have identified concerns about themes emerging from cases involving volume consumer claims. As of 30 June 2025, we have 89 ongoing investigations that relate to 73 firms providing volume consumer claims services."

Other recent investigations and firm failures have reinforced the regulator’s view that, without stronger compliance, bulk claims work can too easily drift from providing access to justice into causing significant consumer harm.

The SRA's thematic review and its findings

The review surveyed 129 firms active in the high-volume consumer claims sector, collecting information on the volume and type of claims they handle and on the referral and litigation funding arrangements in place. The SRA visited 25 firms onsite and reviewed their awareness of and adherence to regulatory obligations designed to protect consumers from the risks associated with the sector. Of the 25 firms visited, 9 are now subject to open investigations adding to the 95 existing investigations relating to 76 bulk claims firms.

The SRA’s review found widespread concerns, including firms failing to act in clients’ best interests with litigation funding and referral arrangements, providing insufficient information on costs and funding options, poor compliance when arranging ATE insurance, weak oversight of referrers, inadequate client onboarding, and limited advice on claim merits and prospects.

A point of particular importance, in view of the high-profile collapse of SSB Law, is the obligation on firms to monitor their financial stability when taking on litigation funding. The review flagged the tendency for some firms to take on high levels of litigation funding in relation to their annual turnover. Over-gearing can jeopardise a firm's financial viability, especially where the actual progression or number of cases taken on differs from the financial models relied upon in funding-related decision-making processes. There is also the risk that securing funding can compromise a firm's regulatory obligations, such as acting in clients' best interests, where the commercial need to meet funding obligations can conflict with client interests. Of the 25 firms visited, only 16 reported an awareness of the obligation to monitor their financial viability, and only 15 reported an awareness of the need to report serious financial difficulty. 

Growth of bulk-claims firms and the litigation funding market go hand-in-hand

The SRA recognised that the level of borrowing in bulk claims is "closely linked" to the growth of the litigation funding market. Greater accessibility to funding facilitates a wider net to farm and take on claims. By way of example, on entering administration, SSB Law was holding 43,000 cavity wall claims and owed £200 million to six litigation funders. The firm now faces up to 1,400 professional negligence claims. 

The balance of maintaining access to justice whilst ensuring that funding is responsible and does not put consumers at risk has also been a concern of the Civil Justice Council (CJC), which reviewed the litigation funding market and published a final report in June. Where funding is provided to consumers, the CJC recommended enhancing regulatory obligations including: introducing a 'consumer duty' for litigation funders providing funding to consumers; requiring that funded parties receive independent advice on proposed fee arrangements; and requiring that ATE insurance policies contain robust anti-avoidance endorsements. 

The concerns highlighted by the SRA in its review extend into other regulatory jurisdictions and are shared by the government. In June 2025, the SRA Chair met with the Ministry of Justice and other stakeholders in roundtable discussions to identify measures that could be taken to protect consumers against harmful practices. Further, in July 2025, the SRA and FCA issued a joint statement warning bulk-claims firms and CMCs about maintaining compliance when onboarding or marketing claims in the recent motor finance litigation. Whilst the Supreme Court judgment in the motor finance litigation ruled out the vast majority of claims, the SRA and FCA's joint concerns around the marketing, funding and running of bulk claims remain relevant. The regulatory activity by various bodies is also representative of the risks that cut across multiple sections of the high-volume claims market.

What's next?

As a result of the SRA's review, bulk-claims firms will now be required to formally declare that they understand their regulatory obligations. The regulator also continues to progress 89 investigations into bulk-claims firms. Further, the SRA has released its 2025/2026 budget, attributing the 19% increase from the previous year to the "space-occupying issue" ¹ that is the high-volume claims sector. The SRA's new budget will collect an additional £16.6 million from regulated firms and solicitors to cover a sustained growth in complaints (a 41% increase in the number of complaints reported to the SRA in the last three years) and bolster the compensation fund which has been strained by large-scale collapses. The legal sector, and its insurers, can expect bulk-claims firms to remain under the spotlight and subject to robust regulatory enforcement.