Jen Dunlop
By Jessica Irwin, Senior Consultant and Jen Dunlop, Managing Director at Compliance Office [1] on behalf of Legal Futures Associate VinciWorks [2]
In January 2026, the Solicitors Regulation Authority (SRA) published a critical Warning Notice on the use of ‘no win, no fee’ arrangements. This comes on the back of findings from their Thematic Review, which raised concerns over transparency and the commercialisation of high-volume consumer claims.
While ‘no win, no fee’ agreements can offer crucial access to justice for individuals, the SRA’s warning highlights significant regulatory risks for firms that fail to comply with their obligations. Non-compliance could result in disciplinary action, so firms must take heed of the key points in this guidance.
Key issues identified by the SRA
The SRA’s warning focuses on several critical concerns regarding the management of ‘no win, no fee’ arrangements:
Lack of transparency about fees
Clients must fully understand all potential charges before entering into a ‘no win, no fee’ agreement. Firms must ensure clients are aware of any charges that may arise, whether their claim succeeds or fails.
Conflicts of interest
The SRA emphasises that firms must not prioritise their own commercial interests over those of their clients. This includes ensuring that ‘no win, no fee’ arrangements are beneficial to clients, not just to the firm’s bottom line.
Due diligence on third-party referrers
Firms must undertake robust due diligence when working with third-party referrers, ensuring their practices meet the SRA’s standards, particularly regarding marketing and client engagement.
Jessica Irwin
Adequate after-the-event insurance (ATE)
ATE insurance is intended to protect clients from financial harm should their claim fail, covering costs if the defendant seeks legal fees. The SRA has stressed the importance of ensuring that such policies are appropriate to clients’ needs.
Misleading marketing practices
The term ‘no win, no fee’ is a commonly-used marketing tool, but can create unrealistic expectations about the likelihood of success and potential costs. The SRA advises caution when using this term, noting that firms must be clear, accurate, and transparent in all marketing materials.
What firms must do
The SRA has outlined a series of steps firms must follow to remain compliant:
Clear communication and tailored agreements
All client communications, including templates, must be clear, accurate, up-to-date, and free from misleading information. ‘One-size-fits-all’ templates should be avoided, as agreements must be tailored to the specific risks of each case.
Transparent pricing
Firms must provide a detailed breakdown of all potential charges, including legal fees, success fees, insurance premiums, disbursements, and cancellation fees. These details should not be hidden in the small print.
Fair and reasonable pricing structures
Success fees and pricing structures must be based on the actual risks involved in the case. Charges must be justifiable and demonstrate a fair approach to pricing.
Client understanding and documentation
Firms should actively check that clients have understood the terms of the ‘no win, no fee’ arrangement before proceeding. It is also essential to keep thorough records of all advice provided, including oral advice, which can be documented through attendance notes. And don’t forget the obligation to advise clients of any other (free) options available for pursuing their claim, such as ombudsman schemes.
Clear right to complain
Firms must explain the client’s right to complain at the outset of the engagement. This proactive communication ensures clients are fully aware of their options if they feel dissatisfied with the service provided.
Monitoring and compliance
Firms must implement procedures to monitor and review all marketing activities, particularly those carried out by third-party referrers, and client care processes. This includes ensuring that all staff are trained on what constitutes acceptable marketing practices and client care processes.
The SRA’s consumer guide: A useful resource
In 2025, the SRA published a comprehensive consumer guide on ‘no win, no fee’ arrangements [3], which firms can share with clients. This guide not only helps clients understand how firms should operate in this space but also provides a valuable framework for ensuring compliance with regulatory obligations.
Why this matters
The SRA’s Warning Notice should sound the alarm for firms using ‘no win, no fee’ arrangements. Compliance is mandatory. Failure to adhere to these standards can result in serious consequences, including disciplinary action. By following the SRA’s guidance, law firms can demonstrate their commitment to transparency, fairness, and client protection.
As the regulatory landscape continues to evolve, firms must stay informed and ensure their practices meet the highest standards. Compliance may require investment in training, procedural updates, and enhanced client communications, but it is essential for protecting both your clients and your practice.
Firms should act now to align their operations with these expectations, ensuring that their use of ‘no win, no fee’ arrangements is not only legally sound but also ethically responsible.