Advertising regulator upholds complaint over law firm’s website claim – and then finds out it’s closed


Closed firm: ASA said Lorrells had time to respond before shutting

Closed firm: ASA said Lorrells had time to respond before shutting

The Advertising Standards Authority (ASA) has upheld a complaint over a law firm’s claim that its ‘no win, no fee’ clients would receive all of their damages.

However, it emerged after the ASA made its finding that the firm, London practice Lorrells, had closed down.

While operating, Lorrells challenged the validity of consumer credit agreements, working under conditional fee agreements to try and write off the debt on behalf of clients.

According to the ASA, the firm’s website stated: “Our service to you is on a ‘no win no fee basis’ and you will receive 100% of any money that we reclaim on your behalf.”

This was challenged by Lloyds Banking Group, “who understood that solicitors claimed their fee directly from the redress payment from the lender to the customer”, and questioned whether the claim on the website was therefore misleading and could be substantiated.

Lorrells did not respond to the ASA’s enquiries and an adjudication published today upheld the complaint under four parts of the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (called the CAP Code).

It said: “The ASA was concerned by Lorrells LLP’s lack of response and apparent disregard for the code, which was a breach of CAP Code rule 1.7 (Unreasonable delay). We reminded them of their responsibility to provide a response to our enquiries and told them to do so in future.

“Because we had not been provided with evidence to show that customers received 100% of any money Lorells LLP reclaimed on their behalf, we considered that the claim had not been substantiated. We therefore concluded that the ad was misleading.”

It also breached rules 3.1 and 3.3 (Misleading advertising) and 3.7 (Substantiation).

The ASA ordered that the advert must not appear again in its current form and referred the matter to the CAP Compliance team.

The Solicitors Regulation Authority (SRA) confirmed to Legal Futures that Lorrells closed on 8 September. An ASA spokesman explained: “The complainant identified the ad in July and we first contacted the advertiser in August, so they had an opportunity to respond before they ceased trading.

“If it becomes apparent that a business has ceased trading in the course of an investigation, we will make a decision as to whether there is value in carrying on. In this case we weren’t aware of the circumstances until we contacted the SRA to let them know the outcome of our investigation.

“We are not obliged to stop an investigation if a company has ceased trading and there is often a public interest in carrying on and putting on the record why the ad breached the code.”

There is no memorandum of understanding between the ASA and SRA, but the spokesman said that “we will often draw to the attention of a relevant industry regulator a ruling against one of their members if we think it throws up something that will be of interest to them”. In this case, it was the failure to respond to the ASA.




Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blog


Wills are changing but do your financial partners know?

The Law Commission reforms to wills make this an excellent time to reflect, not only on how they will affect your own clients and processes but also those of your financial planner partners.


GEO – the impact of AI on digital marketing for law firms

GEO represents the biggest change in online business generation that I can remember. You cannot afford to stick with the same old engine optimisation techniques.


What the law can learn from fintech’s onboarding revolution

Client onboarding has always been slow. It’s not just about the paperwork and manual workflows; it’s also about those long AML checks and verifications.


Loading animation